THURSDAY 18 OCTOBER 2001 __________ Members present: Tony Wright, in the Chair Kevin Brennan Annette Brooke Mr David Heyes Mr Ian Liddell-Grainger Mr Anthony Steen Mr John Lyons Mr Gordon Prentice Mr Michael Trend Brian White Mr Anthony D Wright __________ Memorandum submitted by the Cabinet Office Examination of Witnesses THE RT HON JOHN PRESCOTT, Member of Parliament, Deputy Prime Minister and First Secretary of State, LORD MACDONALD OF TRADESTON, CBE, Minister for the Cabinet Office and Chancellor of the Duchy of Lancaster, and MAVIS McDONALD, Permanent Secretary of the Cabinet Office, examined. Chairman 1. On behalf of the Committee could I welcome our witnesses this afternoon, Deputy Prime Minister, Minister for the Cabinet Office, Permanent Secretary of the Cabinet Office. Thank you very much all for coming along. It is in the nature of the Cabinet Office, even more so now since the recent reorganisation, that you range wide and I suspect the Committee will want to range fairly wide in its questioning to you, but I am sure you are prepared for that. Do any or all of you want to say anything by way of introduction? (Mr Prescott) Yes please. I think I took your warning on The Today programme, Mr Chairman, that you do range wide. We have been in the job for four months and we will try to give you the best answers to your questions. I would like to thank the Committee for inviting us here to set out our role in the Cabinet Office and to discuss our contribution to the delivery of the Government's key objectives. You have a memorandum which sets out the detail of that but there are just one or two points I would like to make, if you would allow me. The Prime Minister has, indeed, made it clear since the election that the Government's key priority for this term is to deliver world-class public services, built around the four key principles which again are set out in the memorandum. That indeed is no small task. I think anybody looking at the particular problems involved would agree with that. To succeed needs the commitment of everyone and indeed a strategic dirction from the centre of government which I think your earlier report, Chairman, pointed out. The Prime Minister too was concious of the need to make changes at the centre and through the creation of my Office of the Deputy Prime Minister and the restructuring of the Cabinet Office, we believe we are better placed to help ensure that all departments deliver on those key priorities and objectives which the Prime Minister has set for us. I have looked carefully at the Committee's Seventh Report. Indeed, only being in office for only four months in this particular job I have had a valuable insight into the kind of problems that we face coming new into these matters. You did raise a number of interesting points about the role of the centre and to Lord Macdonald and I with only four months in the job, it gives us an invaluable insight into the challenges. I hope you will agree that the changes we have made so far in that limited time have strengthened the centre and met some of your concerns. We have strengthened the government offices in the regions. We are bringing them under the Cabinet Office to help that co-ordination and delivery. The Delivery Unit will be focusing on improved outcomes not just outputs, another recommendation that you made in your report, and we look to develop better public services. You were also concerned about the centralisation of government and, indeed, I have always felt you should decentralise it, being an advocate of regional government. It is one of the responsibilities I have got at present to bring in more decentralisation although I hope the work on regional governance in the coming White Paper we will address ourselves directly to that concern of your Committee. In my role as the Deputy Prime Minister I hope - I leave it to you to make the judgment - you have the powerful Cabinet Minister for which this Committee called to help in the direction and delivery of those services. The responsibilities that the Prime Minister has asked Lord Macdonald and myself to undertake have a major role to play in delivering those priorties, but for my part I have a number of other tasks, again set out in detail in the memorandum. Principally, I support and deputise for the Prime Minister at home and abroad and I help to oversee the delivery of the Government's key priorities. I am assisted in doing so by the chairmanship of a number of key Cabinet committees that I hold but I also have a number of specific responsibilities. These include social exclusion - and you have been complimentary about the work of the Social Exclusion Unit - regional governance and the role I continue to play in the international climate negotiations representing the Prime Minister. Indeed, yesterday I returned from a visit to Russian and the Ukraine where not only did I discuss on behalf of the Prime Minister a number of bilateral issues, but also how we may develop the global action, not only against terrorism but how we can deal with the coming UN conference, the Global Summit, next January, and I think that is quite an important part for Britain to play. I discussed that with the Presidents and Prime Ministers of those countries. Where cross-cutting issues arise which are of interest to both Gus and I we work closely to ensure a co-ordinated outcome. I know the Committee is also interested in how we work with the rest of government. We work of course very much in a role of partnership and the Cabinet Office is there to support and assist departments in achieving successful delivery of services. It will work with these departments to set out the framework for delivery and it will provide strategic direction and evaluate and monitor success. Finally, chair, the Cabinet Office has been significantly strengthened in order to play its part in all of this. In addition to the staff in the Government Offices our London staff are in many different buildings. We will reinforce our efforts to create a stronger centre by bringing as many as possible of the London staff together in nearby locations next summer. These are the main points I wanted to make. They are in detail in the memorandum. I am grateful to you for allowing me to make that statement and now we are at your convenience. 2. That is very helpful, thank you very much indeed for that. Perhaps I could just tell you that the Committee has said that it wants to spend a short time at the beginning exploring with you some of the recent events that you were referring to obliquely at the beginning and then we can move on in the remaining time to the main business. Could I just begin by asking you about this. Lord Macdonald; when you were asked about the Jo Moore business in the Lords earlier this week you referred to it, as many people have done, as a "serious error of judgment". Could I put it to you that what many people feel is that is precisely what it was not, that it was gross professional misconduct. It was an attitude that was reflected, not a judgment of one course as against another. It displayed an approach to the job which was inconsistent with any notion of public service. Is that not the point? (Lord Macdonald of Tradeston) I think the Prime Minister made it very clear yesterday just how abhorrent he felt some aspects of that statement were. I do not think you could have asked for a more abject apology than we got from Jo Moore and it seems to me that the Prime Minister's key phrase was he did not think that an individual's whole career might be destroyed for one error of judgment, no matter how horrible or distasteful that error of judgment might be. I understand, of course, that the Secretary of State did reprimand Jo Moore and indeed formal action was taken by the Permanent Secretary and it is now for that Department, I think, to decide what the course of action is next in terms of Jo Moore. I think the Prime Minister has made it very clear that he backs the judgment of his Secretary of State. 3. With respect, I think that answer would work if it was an error of judgment we were talking about. If it is something else then it probably does not because if I look at the model contract for special advisers, again issued in September, just last month, it could not be clearer. It says: "Your employment requires performance consistent with the high standards expected of senior members of the Civil Service". On any test surely that test has not been passed? (Lord Macdonald of Tradeston) That is right, but I think the question is should someone be sacked for any transgression of a contract, and that is surely a judgment that has been made by the Secretary of State, by the Permanent Secretary and now by the Prime Minister. 4. We are talking about someone who only lives as an appendage of a Minister, a political appointee whose career in that sense expires with a Minister anyway. So it is not a normal career pattern. Let me put this to you or perhaps to Mr Prescott. If a Minister had done this C (Mr Prescott) --- Not unknown for Ministers C 5. --- Would the Minister still be in the job? (Mr Prescott) The issue about an adviser not a Minister. You may argue that the Minister has reprimanded the individual and has decided that it is not a sufficient case for sacking, which is the view taken by the Secretary of State in this case and, indeed, the Prime Minister. It is an error of judgment of the worst kind, "stupid action" I think it has been described as, and I certainly feel that is so, but it is one for which she has apologised, for which she has been reprimanded and the Prime Minister now as head of the Civil Service has made it clear that he did not think it was a sackable offence. 6. Had it been your special adviser, you would have taken the same view? (Mr Prescott) I think all of us who are in ministerial positions and have employees who are special advisers have to arrive at their own judgment, and in this case it was the judgment of Stephen Byers. The Prime Minister has looked at the matter, the Permanent Secretary was involved in it, there have been reprimands, apologies made, and I think in those circumstances we have to accept that it is not, in the view of those people, a sackable offence and I have nothing more to add to that. 7. Is her position still tenable? Can she still do her job? (Mr Prescott) That is always a consideration when somebody makes an error of judgment, however bad that error is and the one who employs him, and employees is what special advisers are, and they were not advising me in this case; the special adviser was advising this Secretary of State and he has to make a judgment. He has made the judgment, she has apologised, and the Prime Minister nor the Secretary of State that it is a sackable offence. Frankly, it does not rate against all the other problems we are dealing with, does it? 8. You do not think it turns on trust in government? (Mr Prescott) I think it turns on trust between the individuals involved certainly because they are better placed to make an judgment as to whether this was an error of a more permanent kind or one that they slipped into and had not taken fully into account, and they have made a judgment. I am bound to say that if the same criteria were placed on the House of Commons none of us would be in there very long, would we? Nevertheless, it is a judgment that that individual has to make and they have made it. I hope if I am placed in such circumstances I will make my judgment and I hope the people might agree with it. But I do not know until the event occurs and you would not ask me to comment on it. 9. If it turned out that the individual concerned, as has been alleged, had been asking a senior civil servant to do things which it was improper for a senior civil servant to be asked to do, would that change things? (Mr Prescott) I have heard it alleged. I hear a lot of allegations in the papers. If I had to act on every one of them I would be in a considerable amount of difficulty with time. No-one has made an official complaint, as I understand it, on this matter and where there has been a disagreement about the matter of judgment in this case it has been dealt with by the Permanent Secretary and the Secretary of State. 10. But if it turned out to be the case, whether a complaint had been made or not, then the question. (Mr Prescott) It does make a difference if a complaint has been made. At the moment it is down to the level of allegations. Have you spoken to the individual as to whether a complaint has been made or have you read it in the paper? 11. I am asking you. (Mr Prescott) I am sorry, the substance of the allegation has to be important if you are asking me to comment on something like that. Until that is justified I do not think it is fair to continue the discussion based on an allegation as a means of extending the questioning about Jo Moore and the action of Stephen Byers. 12. Let us remove it from the individual. (Mr Prescott) I got the impression it was very much about the individual and in fact special advisers are individuals. Not every one acts in the same way and we are dealing with one particular act. 13. As you say, we do not know the facts. If we remove this individual case as alleged, can I ask the general question - and I point to the terms of the special advisers' code - and say if any special adviser were found to be prevailing upon civil servants to do things it was quite improper to ask them to do, what consequences would flow from that? (Mr Prescott) If it is improper for them to do it - and there certainly are cases and that is envisaged in the Code to which you refer - there are means by which you deal with that. There are different disciplinary measures, for example it would certainly involve the Cabinet Secretary who said to your Committee here when you dealt with this in your inquiry that he would have a responsibility to address himself to that. At the moment it is the Secretary of State who has dealt with the circumstances as he has seen them.. If it is worse than that presumably there would be a responsibility for others. As I understand it, you have the Cabinet Secretary coming here in a week or ten days' time and you will be able to address him on that. Can I tell you also that hopefully by then we will have our response to your Committee. I would like to offer my apologies that perhaps it has been longer than normal. I do not want to plead special circumstances but I will do all I can while I am in the job to see there is no further delay in responding to your Committee. Mr Trend 14. Was the Cabinet Secretary involved in the present matter, in the Jo Moore matter? Was he consulted? Did he or anyone else require an apology to be made? How does that work? (Mr Prescott) I have been away for two or three days but, as far as I understand it, it was not referred to him because the matter was dealt with internally by the Permanent Secretary who is, of course, connected very much with the Cabinet Secretary, and whether there was a conversation between them, I do not know, but the matter was dealt with in a professional manner and she was reprimanded by the civil servant involved in this case which was the Permanent Secretary. 15. Perhaps Lord Macdonald knows, was this matter referred to the Cabinet Secretary? (Lord Macdonald of Tradeston) It is the practice in both the public and private sector that any complaints from staff are handled as matters of strictest confidence by the department concerned and that would be the proper procedure. Sir Richard does not propose to hold a separate investigation. He believes that this has been handled in accordance with the proper procedures in the employing department which is the DTLR. 16. In some sense you have overall responsibility for the special advisers and this matter must have been referred to you at some stage? (Lord Macdonald of Tradeston) It has not been referred to me. 17. Do you know whether Miss Moore made the apology of her own volition or was she required to do so? (Lord Macdonald of Tradeston) No, I do not. 18. Mr Prescott? (Mr Prescott) It is a matter of record if I believe what I read in the paper. I see also that she appeared before him, he reprimanded her, you must know that as well as I do, and I take it as his admittance that he did reprimand her. I think he has made statements also to the House to that effect. Kevin Brennan 19. Could I ask a slightly more general question about the Code of Conduct perhaps in the light of the events that have taken place recently. Are you confident that the Code of Conduct is fully understood now by Ministers and special advisers and if that is the case I notice that within the Code of Conduct one of the duties that the special adviser is given as one of their major responsibilities Code of Conduct is "devilling for the Minister". What exactly does that mean and could that sort of phrase within the Code of Conduct perhaps have led to a misunderstanding in this case of what the duties of the special adviser are? (Mr Prescott) I have got some sympathy with the question. I certainly approached it the same way enquiring what was meant by "devilling", but no doubt our journalists will tell us tomorrow! In those circumstances, I think the rules are clear about honesty, about integrity, about not directing civil servants, about what those limits are. Special advisers are political appointees, albeit they are civil servants. I think the Code makes that clear. What we are concerned about is can anyone direct a civil servant to do something improper? No, it is in the Code, and if they do then they face very serious penalties. Mr Lyons 20. Can I go back to the question of the reprimand from the Permanent Secretary. Was that the outcome of a disciplinary hearing, a formal charge against Miss Moore? (Mr Prescott) I am not too sure about that. I shall certainly bring it to the attention of the Secretary of the Cabinet who will be here before you and perhaps will tell you the detail of how the Civil Service machinery dealt with it. As I understand it, it was not a complaint.. I think it might have been referred perhaps by the Secretary of State himself. I am not exactly sure about that. Whatever the process, she appeared before the Permanent Secretary and was reprimanded for her action. Mr Liddell-Grainger 21. I want to bring you back to this - and we do not know the full circumstances - the circumstances were that there was an e-mail C (Mr Prescott) I was referring to the other allegation. 22. The allegation is that an e-mail went out. I believe that there are 81 special advisers. Do you not think it is time - because this is going to happen again, I suspect, human nature being as it is - that it was tightened up and the entire relationship of special advisers to Ministers and civil servants is debated on the floor of the House and we have a proper debate to take this forward? (Mr Prescott) I know that is a concern of this Committee, indeed I think it is one of your recommendations, and it is one of the responses we want to give to you. But I am glad that at least you are generous enough to say there can be errors of judgment, and in this case there was. The rule did not make any difference and in fact was not taken into account when the decision was made. 23. Is the answer that you would like to see it debated formally? (Mr Prescott) It is open to anybody to have debates and I think when we get the response to the Code we will have opened up that debate and, as I understand it, we wish to include it into Civil Service legislation which will be put out to consultation and will be debated, so no doubt a debate will come and perhaps we will all benefit from that. Annette Brooke 24. If I could return to the departure of the senior civil servant to another department. What I am not quite clear about is how you know there has not been a breach of the Code of Conduct in that, as far as you are indicating, I believe up until today there has not been a senior investigation and yet there is certainly a lot in the press about it. I think this is a matter of concern. You said there is not a formal allegation but surely for there to be confidence in the future of this particular senior adviser, this matter does merit some investigation, so that you can categorically say there has been no breach of the Code of Conduct? (Mr Prescott) If there is no complaint and we read the allegation in the press by an unknown source are you saying that we should investigate it? 25. It is a matter of serious public concern. (Mr Prescott) Would you be satisfied with that approach? It is a serious matter, and she has apologised for it. It is clearly getting a lot of attention in the press. 26. There are two issues which have come to light. I am referring to the one that we do not know very much about. (Mr Prescott) Is that the possible direction of civil servants to do something improper? 27. Exactly and I think that is very worrying potentially, certainly to me as a newcomer, if that has happened behind the scenes. If you could assure me that somebody fairly senior has carried out a full investigation to see there was no breach of the Code of Conduct, then I could sit back and feel fairly comfortable but I have not heard that from you this afternoon. (Mr Prescott) No and I do not think I can give you a proper answer to that. I would suggest the chief civil servant is coming before you and you may want to ask that. There is another offence which has been committed and that is leaks from inside the Department to the press, and I see nobody asking or demanding that there should be investigations into every one of them. That is not a proper answer to your question. It is one I feel is a matter of imbalance between the way this matter is pursued and the way others are. But the chief civil servant will be here before you and we will have produced answers to your recommendations on the Code and you will have another opportunity to pursue it. If the Committee were still not satisfied, I am quite happy to appear before you again and give you further responses if that is the wish of the Committee. Chairman 28. We are grateful for that. I think the point of the last question was of course we do not know what went on, but my information from within the Civil Service is that this did happen and therefore it requires something to be done about it. I think the feeling that something is not to be done about it does help to damage people's faith in the political system. (Mr Prescott) I would be grateful for any information you can give me as to who gave that information or if you could pass on to that person that they should make the complaint, we would be delighted to investigate it. The complaint has not been made by the person this is alleged to have happened to. 29. We know what happens - people get moved sideways into other jobs. (Mr Prescott) I am afraid if you are going to call in hand those pressures, I know those problems in all sorts of directions. There is this great thing that everybody should be independent and I am not sure independency --- I will probably get into troubled water. The things that we write down that we would like to happen do not necessarily happen in the way that we would like them to happen. Mr Trend 30. Can I return to a loose end. It is a general point, not a specific point about the case. Do you not think it would be better if these things were more transparent? This touches on the whole relationship between Ministers and special advisers, the press, who they feed and the general public, who in an important sense have a right to know how they are being governed. There has been a lot of confusion about this. Two of the most powerful people in the country appear either not to have known, not to have been told, not to have discussed it, or not to have tried to work out exactly what happened in this case. It may be that we need to talk to other people about this. This is not good for the governance of the country or the confidence people have in their government. Naturally the press are going to run away and invent - maybe not who can tell - all sorts of fantasies. Is this a good way to run a country? (Mr Prescott) You believe that all the allegations that are made should be investigated and people would feel more confident about that? I agree and I am not trying to be trivial in my answer, serious matters should be investigated, and any direction of a civil servant in an improper way is a serious matter. If you are asking me about allegations, I have no evidence to believe that that is the case. If there is, I can only point you in the direction of the appropriate authority to deal with it, the person who is directly responsible for all these matters in regard to the Code and its operation, as they are civil servants, in special circumstances admittedly, who may have sometimes fallen short. Chairman 31. I hope you will understand that as a Committee we do have responsibility in this matter C (Mr Prescott) I do not doubt that for a second. 32. --- So we do have to keep an eye on what is going on. (Mr Prescott) I am not surprised there are these questions. 33. Can we now move on to look at the organisation of government at the centre which you described at the outset. Could I ask you just to say in a nutshell C (Mr Prescott) --- While all the press are leaving and we can get down to normal business. 34. To say, as someone who has long experience of these matters, what was the problem at the centre of government to which the new arrangements are the remedy? (Mr Prescott) It is a very important question and one that you spent some time in your Committee dealing with. I think you made a very powerful point about government - that it is too centralised in this country. That is one important thing and there should be a process for decentralisation, which is part of what I am dealing with in my job. Secondly, there is the point that public services are not delivered as effectively and efficiently as they could be. Not only has your Committee made that point but others have as well. So there was the appointment of a Delivery Unit to make sure the machinery is in government to deliver - this is your point about outputs in this matter - and we have made changes in that direction. What is important of course is the cross-cutting activities of government in the Social Exclusion Unit, which again your Committee has recommended, and is doing a particularly good piece of work. Also the analysis and work can often be done and recommendations made across department but it does not always get implemented, hence the need for somebody who has a direct responsibility to do that. I think as the Office of the Deputy Prime Minister - it really started with Mr Heseltine- there is a need (which your Committee identified) to have a strong political force inside that Cabinet Office to do that. There have been other Ministers of the Cabinet as well but I think that the office I hold carries more weight with it by the position I have and by my relationship with the Prime Minister. And the other thing which I have always felt very strongly about in government, is the fact that there is so much demand on the Prime Minister's time to do things, particularly if a Prime Minister wants his government to be successful, that could be done by his deputy and I have always argued that is a good role for the Office of a Deputy Prime Minister. That is what we are now establishing. We think that is important. Indeed, the whole process of decentralisation of regional governments in the White Paper, where the Cabinet Office has a special responsibility to develop this with the Secretary of State for transport and local government, these are the reasons why they are spelt out in the memorandum, and I am delighted to do that job. 35. There is a feeling that obstetrics has come to the heart of government and it is a maternity unit at worst. What I really want to know is who is "Mr Delivery"? Is it you as Deputy Prime Minister? (Mr Prescott) We are all delivering in government. This job of delivery is very important. All administrations have found perhaps that they have not been able to deliver as fast as they could or deliver the things they had promised. It has become quite a cardinal issue in politics and therefore - certainly in the last Election - we, probably more than any other government, laid down what we were going to deliver, and we had better deliver or we are going to have problems of a major kind. That requires action to be taken in the way we have addressed it. Working to the Prime Minister I can relieve him of some of the problems that he has and the massive demands on his time, especially internationally but on the domestic scene as well, and I will play a part in helping to deliver it. At the end of the day this is very much the construction of how the Prime Minister wants his government to deliver and I am just helping him to deliver it. 36. The reason I press this is I thought you were going to become Mr Delivery, this powerful Cabinet Office figure that we asked for in our report, but then I am struck by the fact that none of these new units, the Delivery Unit or the Office of Public Service Reform, reports to you. (Mr Prescott) They do. We work together. Gus Macdonald is very much looking at the detail of the delivery of the programme. We have people who get involved in the PSA. You said that the Cabinet Office should be involved in that and it should not simply be left to the Treasury. We sit on the Committee that deals with that and sets new targets. The day-to-day detail of making sure the Departments' programme are generally fitted to achieve that (because we cannot always assume that is the case and there is plenty of evidence for that) Gus Macdonald deals with. I deal with an awful lot of activities on the broader picture but Gus and I regularly meet, we co-ordinate. As you are well aware, Gus Macdonald cannot appear in the Commons unexplained, we are accountable in Parliament, and I cannot afford to be ignorant of what Gus is doing. I wish him well on that and I get on with the jobs I have got. We think that is a more effective arrangement. 37. We called for this greater strategic capacity at the centre and we need to try and find out if we now have it or not, or whether, in fact, we have new sorts of coordination problems set up by the new machinery. I am struck by people who have looked at this, for example, Malcolm Dean in The Guardian says, "the changes were a badly designed structure which broke", what he calls, "the three iron rules of effective management by unclear lines of accountability, confused focus and overlapping remits". David Walker, and I speak as observer of these things, says that the Cabinet Office is "in a right old mess". You can see why people wonder if we have sorted out the --- (Mr Prescott) I cannot see why. All that is is a conclusion, whether I agree with it is entirely another matter. Overlapping is the very issue of cost-cutting. You complain constantly that departments do not take account of other departments and yet they are cost-cutting. I can recall a minister making a statement a little while ago, I shall not name the particular minister, who wanted a particular course of action and a change indirection of his department. It was with regard to speeding cameras - I show my hand by saying that - and I had to point out to him that the targets then set for the Department of Transport was to reduce accident death. If he took all of the money off that and then put it in to reduce crime figures there would be a conflict, so we would not achieve one objective but we may achieve the other. Our job is to make sure that confusion that exists does not allow it to happen, there is a cost-cutting situation. I have a Cabinet Committee to work out disagreements if secretaries of state cannot work it out themselves. We think we are moving in the direction to get that kind of agreement. He mentioned three points, the one about confusion. He said there was one about --- 38. A lack of clear focus, a lack of a clear line of contact. (Mr Prescott) I do agree when you are working in these areas it means we have to have a clear understanding between us about his responsible for what in the system. In the way of accountability I have to be accountable on the House of Commons floor for doing it, I cannot say, "I am sorry, this is done by Lord McDonald", neither can he say in the House of Lords, "I am sorry, this is done by somebody else". We do have this divergence of thinking, our agreement, our objectives but we specialise in the detail of achieving certain objectives. In Gus Macdonald's case it is designing and making sure that departments with their department delivery department meet the objectives we have set for ourselves. I have other wards on decentralisation. I would be activity involved in the White Paper on regions - you might say that is something that I have particular interest for - I want to see it delivered on a further decentralisation scheme in the regions. That fits in with your argument of greater use being made of regional government and decentralisation, I get on with the detail of that and producing the White Paper. Chairman: Thank you very much. I am sure colleagues will want to explore some of the issues. Mr Steen 39. Can I, first of all, say it is a great pleasure to have an opportunity to ask you some questions, I know you are going to be as helpful as you can in your answers. (Mr Prescott) Always, Mr Steen. 40. I am quite a simple Member of Parliament with very complicated people here. I do not understand the complicated words we use. You get a lump of money to do something, you argue how much money you are going to have and you have some people in your department who are going to see where the money goes. If you are going to build a new railway, which I wish you would do, somebody has to plan it -- (Mr Prescott) That is a matter we inherited. 41. -- somebody has to spend money on it, somebody has to buy the land. I do not understand what this complication is about the delivery? (Mr Prescott) It is too simple in one aspect, we do not decide where the money goes, that is a matter for the Chancellor or the Government, our job is to make sure that once the money has been decided and how much it is and that they have to produce a certain outcome are they going to do it with the machinery they have. That is our responsibility. 42. In your evaluation unit you were evaluating whether you were getting value for money? (Mr Prescott) That is certainly a consideration. It is also for the secretary of state when he negotiates the targets for a PSA target they get it has to show value for money in order to justify disclaim for that claim on the budget. 43. The point I am after is this, the American Canadians have suffered from this for many, many years, there is a neurosis in society about value for money and evaluation, you always have to have somebody checking somebody is not spending too much, and so on, and you end up with a bureaucracy which often prevents the delivery of the very thing you want because there are so many people round checking, evaluating and so on. Have you, this is not a facetious question, are you ever going to see yourself evaluating the source round the actual delivery of the goods which is inhibiting the actual delivery because there is so much bureaucracy round it caused by the pressure from the media, by Members of Parliament and everybody else to actually see if you are getting good value for money. The result is that the on cost is enormous. (Mr Prescott) It is difficult, I agree. You, no doubt, like the Public Accounts Committee want to see that we are spending money properly and that is a proper way of checking if we are spending money properly. The difficulties for delivery, to which you refer, I wonder whether Gus Macdonald can answer those problems, they are what they have to address them to. We defeat our purpose if it is going to cost us a lot more. That extra cost must be considered as part of the improvement. (Lord Macdonald of Tradeston) I agree with the thrust of Mr Steen says. We have to have a very clear focus on trying to deliver the outcome that your Parliament voted the money for. I disagree with the journalist who said that we are unfocused. In any organisation you will get confusion on focus but it is our job in the delivery unit, in the particular areas of priority, to ensure that that focus is maintained. That is a very tough job for any group of senior managers. I have some sympathy, coming from a management background, with the Civil Service and the task that it faces. Our delivery unit is made up of only 30 people but you can see that we will work very closely with the departments because in the end it is the departments with their thousands of staff who must deliver in the leadership of millions of public sector workers. That is why we have try to apply the general principles of reform which came out in the early 1990s in the Citizens' Charter and we, again, tried to update and refocus in our four guiding principles which you have made reference to in your past work. In that way I believe that we through the delivery unit can help the departments maintain their focus and find solutions to some of the particular problems. My role is part progress chaser and reporting to the Prime Minister, it is part traffic cop, if you like, to stop the units bumping into one another. As the Deputy Prime Minister says overlapping activities are sometimes quite useful and inevitable if you are looking for cost-cutting activities, there is bit of brokerage involved and there is a bit of management consultancy of a very occasional kind. It is all in an attempt to put delivery at the heart of this administration in a sharper way than was the case in the first four years of the previous administration. Chairman 44. Is your sense so far, I know it is very early days, clearly you will review this as you go long, that you really have a structure now that is capable of doing this delivery job that we all know is so central? (Lord Macdonald of Tradeston) It is too early to say given the huge magnitude of the task. What I can say is that we started well in terms of relationships with the department, they have been very ready to meet with us and talk about possible solutions and share their problems. We have already established a very good working relationship with the Treasury. We are working very well with the Deputy Prime Minister's units and his activity and, of course, as the Deputy Prime Minister says, a lot of this activity is in the end clasped together through the Cabinet Committees. The Deputy Prime Minister chairs the Domestic Affairs Committee which is sitting there sharing the central importance in all of this, the PSX Committee chaired by the Chancellor. We have bound a lot of this together quite quickly now the challenge is to see whether we can deliver. (Mr Prescott) I think the Committee properly dealt with the examination of what motivates Government to get best value, and we have gone through various things. Privatisation was an idea of getting the market to do it cheaper, it is clearly about cost. Compulsory competitive tendering is another example of that. We have used best value. The concentration has been on cost, what we are trying to say once again is this argument about the quality of the service, can we measure quality and then can we measure it by that? That is what we are trying to do. It has not been done that way before. There are difficulties and I am ever hopeful that we will be successful in it. What I am quite sure about is the pursuit of the cost way has not necessarily given us the best value, perhaps we should do it a different way, as, indeed, recommended in your own report Brian White 45. I am not sure who one has the responsibility for the e-envoy. There has been an OFTEL report and several reports recently which point Britain several places down the league table, depending which set of these tables you use. My understanding is that the e-envoy has something like 100 projects under his wing. I am just curious as to how 100 projects is going to help deliver Britain to be the number one e-business within the next three months, which is the Prime Minister's target? (Lord Macdonald of Tradeston) As I am sure you are aware Mr White the e-envoy reports to Patricia Hewitt and the DTI and they have an e-commerce minister there in Douglas Alexander. My particular interest is in the e-government side of it. In the progress to date we have established that there are 521 central government services now and of these 42 per cent have been enabled for transmission on the Internet. We have 73 per cent likely to be enabled by 2002 and, as you know, we are hoping to achieve 100 per cent total by 2005. My particular interest is in that area of e-government. The e-envoy certainly has a very big job on his hands but I can assure you from my short acquaintance with him in the last 4 months he is very energetic. 46. Most of the actual projects are about e-government, there are about two or three about e-business. How do those projects actually transform the way that government delivers services? (Lord Macdonald of Tradeston) First of all, you obviously look at the definition of delivery services and what the definition of electronic delivery is. If are you 'phoning a call centre rather than going on the Internet then that would be defined as electronic delivery if they have the means in front of them to call up the information that is coming through to the request from the customer. We have over 1,000 government websites, we are obviously trying to rationalise those through the deployment of UK on-line for a start. Of course the government gateway, which will, as you know, it is a very secure piece of infrastructure, and I think the first of its kind in the world, and that will allow business to be able to transact with government in way that has not been the case before. Probably most famously the ability to do your tax through, but I am assured by my colleagues that is not yet easy. There is an awful lot of work to be done in some of these areas. We have made a start. The government gateway appears to be one of the leaders in the world. UK on-line we are trying to develop. We are looking to create more access, as you may know, with the on-line centres, of which there are currently 1,500 across the country, and we are aiming to have 6,000 by the end of next year. 47. One of the things that concerns me about the way public service is delivered is the way that we set up pilots and the tick-box mentality, I call it, the Treasury allocates the money so it ticks a box, the department produces a White Paper and it ticks a box, there is project design pilot which is shown to ministers, it is wonderful. That happens in one small geographical area, the rest of the country do not see the improvements and services and at the end of the pilot the people running the pilot have to run around trying to find a replacement for that project money. How do you get those pilots and projects into mainstream delivery across the whole country? (Lord Macdonald of Tradeston) I think the office of the e-envoy is a way in which those kind of problems you describe are treated much more quickly and seriously than they would been in the past and the appointment of ministers with special responsibilities in these areas I think also helps in that regard. We have tried to make sure that each department does maintain a strong focus of activity in this area, it has been put very high on their agendas. I have every reason to hope that is being delivered. I will confess that only four months into the job my information is not comprehensive and I suspect my knowledge of this area does not match your own. 48. Can I push you on this a bit, we have a lot of people out there who are spending their time trying to get money to keep very valuable projects going rather than spending money on delivering. Part of that links into the PSA programme and the coming Comprehensive Spending Review, what are you doing in this department to make sure that whole emphasis of changing pilots into mainstream delivery is going to be the focus so that at the end of the four years of this Parliament we will have seen this delivered? (Lord Macdonald of Tradeston) I think the next Spending Review process is due to start in earnest in the months ahead but that is where I think the Deputy Prime Minister, with his particular concern to ensure that we have more joined-up government through the Cabinet Committee, will be in a very special position to help. (Mr Prescott) I do not know any more than what Gus Macdonald has said. I would be happy to look at it and write back to the Committee to see if I can give you more information. If there are further questions you would like to put to me either now or later I will certainly meet with you and discuss how we have to develop it? 49. Can I suggest that one of the areas that you need to look at is the whole question of Treasury rules and the way that the public sector is divided? (Mr Prescott) I hate Treasury rules. 50. The government, quite rightly, moved to resource accounting, and that was a major step forward, is that the end of the process or do you see further changes in the way public sector money is defined, what money is defined as private sector, what is public and what is a mixture? (Mr Prescott) That is a very important step forward and there is a lot of work to be done on it. Treasury rules, which are largely to do with financing, I always have had my arguments from time to time. I think they are changing, there has probably been more changes and less treasury rules than we have seen before, particularly in the transport environment and local authority lots of changes would be made. Of course the whole business of public/private partnership, which the Committee is going to be looking at as well, is a matter of further examination and will require resource allocation considered in a different way, it is certainly a major part of the finer changes in Treasury rules at present. Mr Wright 51. Can I change tack a bit to go on to the regional government. Quite rightly, Mr Prescott, you mentioned the fact that so much time is required of the Prime Minister and all of the responsibilities that come down to you ultimately, Climate Change, Cabinet Office, social exclusion as well, what concerns me is the split between the government agencies of the regions, where you are ultimately responsible for the government offices and not the regions and the DTI is responsible for the RDAs. Who is ultimately responsible at the end of the day for developing the policies for the regions in that scenario? (Mr Prescott) It is a very good question because while I was wise the Secretary of State for the Department of Transport and the Regions I did have a responsibility to bring in the Regional Development Agencies. Of course it did mean that the DTI dealing with Europe had to deal with the grants and so, to a certain extent, there was a certain amount of cost-cutting involved and the regional government offices were really trying to deal with that. I think as your report pointed out again they were not working very effectively. We had a separate report which was commissioned by ourselves and they were not working as efficiently and effectively as they could. One of the changes we have made is to get all departments involved, not all departments were involved, that is a major part, and the direct responsibility is to the Cabinet Office. It is true that the RDAs have been passed over to the Department of Trade and Industry at the present time, which has been connected with grants. This is always one of the problems, you can put two or three of them together or you can put them all into one. Frankly if we move towards a regional government structure I do believe those RDAs should be accountable to the regions. These discussions have yet to go to the government in a White Paper presentation. Obviously there will have to be central government negotiating with Europe, and that presumably, will remain with the Department of Trade and Industry, and we will put together the regional government offices and the RDA and then the existing regional assemblies at the moment, to which we have to ask ourselves, what is the level of democratisation that is to apply within the regions. At the moment it is a little untidy but I think in the White Paper we will do something to tidy this up. 52. Will one of the issues within the White Paper address possible problems between government, the regions and the RDAs? I can think of an example, which I will not go into now, where there may well be different policies. Ultimately the decision was taken at a higher level and what policy would be adopted. What would happen in the future in terms of determining policy for the regions, would it be ultimately yourself? (Mr Prescott) Central government make this decision or it will apply as a policy. For example, if you want to designate a certain area in an objective one or an objective two the government have to negotiate in Europe, there is clearly going to be a government role. Once you have decided the policy the regional government offices are there to make sure it is coordinated, all departments work to those objectives. Do remember the responsibility I would have on a White Paper is to recognise what we as a government promised, that is that we would have a regional government system and it would be based upon the unitary local government system and the people would make a decision as to whether they wanted it. It must raise the possibility that some areas might vote to have such a regional government and some may not. That is a commitment that we made that it would be the choice of the people for that and we would have to take that into account in our White Paper, that the Regional Development Agency have been successful. They do take into account the regional strategic planning that we asked them to do and I think they have shown a lot of coherence and agreement on the policies which ever region they are working in, although every region is different and the balances are bound to be different. As an agency working to government direction I think they work quite well. Under this Cabinet Office now we can be sure that the government's policy is clear enough and they implement it within the regions. Chairman 53. Even if we were not sure who Mr Delivery was there is no question you are Mr Regions now. (Mr Prescott) That is a very point, I will be responsible with the secretary of state, my job is not to take over the secretary of state's job and it is important that somebody who has to work with secretaries of state - we may have disagreements about certain policies - with my Cabinet Committee role I have to try and find an agreement. My job is not necessarily to run their role but in this case it has been decided that I will be responsible with Stephen Byers to prepare the White Paper. I will then present it to Parliament and he then has the responsibility, once the policy is decided, to implement it and legislate for it. Annette Brooke 54. I do apologise, I am having huge problems with the whole concept of the centre. (Mr Prescott) Join the club 55. I have decided I need a picture to help me. Somebody tried to find one for me on the web but it is all out of date, it was a Cabinet Office organisation chart. Before I started this I was wondering if we could have the picture in due course and a line coming out of it, but then I think I might get a better understanding. I do think that is really important for the future. (Mr Prescott) Can I say to you that we will arrange for that to be done. There is one being prepared and I know that the Committee evidence had a diagram. We will do our best to provide you with it. 56. That would be helpful. I have a number of questions, I will just ask one little section at the moment, that is really pulling out your function and responsibility. Again, that is why we need the chart since this is all about responsibility and accountability at the end of the day. (Mr Prescott) People who worked with me understand it pretty well. 57. One of my colleagues recently submitted a question for you to answer, the question is not important --- (Mr Prescott) Was that Mr Oaten. 58. Yes. The question itself is not important. (Mr Prescott) That was me! 59. Not in this context. "What role was played by the new Cabinet Office Delivery Unit in place of the Railtrack administration?" I thought that would have been a question you would have answered but in fact the reply, Mr Prescott, was... (Mr Prescott) That is not our responsibility. 60. The role played by the new Cabinet Officer Delivery Unit. The answer to the question is being deferred to the Prime Minister. If it was just a straightforward answer that it is not your responsibility that would have been the answer but the whole question is being referred on to the Prime Minister. I can put this in the general but what I cannot conceive is exactly where you are accountable and where you are answering a question like this on the Cabinet Office Delivery Unit and not being answered by you? (Mr Prescott) That is because Mr Oaten has asked the question of the Cabinet Office because that his responsibility in opposition. I do not know whether the Prime Minister might say, "it is not my responsibility go somewhere else", we must wait and see the paper trial. The question is, do we have responsibility for the administration system in Railtrack? No, why would we? That is the secretary of state's job and as I used to do that job I can clearly understand the resentment if it was being done by somebody else other than myself as the secretary of state for transport who has the direct responsibility. 61. It still does not answer my question. (Mr Prescott) The problem is Mr Oaten rather than me. 62. I feel that the question gets thrown on. What I am really trying to get at are the bits that you definitively and my Lord Macdonald definitively answer up on within this structure, that is really where my question is heading. (Mr Prescott) I tried to understand what you meant by the question. It may well come from my own experience in that department, knowing that money has to be made available and promised to a particular body at a point in time and then at a different time, as happened in this case, there was some question as to whether it had to be put into administration. We had to give money and did give money to Railtrack as the secretary of state. I really cannot see now the Cabinet Office would be involved in a matter of delivery. Once the money has been decided, the investments given and the 10 year plan decided the delivery department, and Gus Macdonald would be involved in seeing that we have the mechanism to make sure the outcomes we want from it have been achieved. We did have a little bit of a discussion about this, we are at a difficulty to see how anyone has at all any responsibility for ourselves. If it is that we are delivering so it is that we should be in charge, that would take us right across government. 63. That is the difficulty, in a sense you are so far ranging and then we come to the specifics and it is not your responsibility. (Mr Prescott) I will check it out again for you and see if there is anything that I missed out in that response to correct. I will send the Committee a letter Chairman 64. If I have this right, I think it is not the answer but it is the question which is the issue and what it says about responsibility. Why was it referred to the Prime Minister when it was a question about a Cabinet Office Unit. The question that would flow out of that, we may get to it at some point, is the Cabinet Office now some big Prime Minister's department by another name? (Mr Prescott) Is the Cabinet Office the Prime Minister's department? The Cabinet Office is the department of the Prime Minister at the end of day. Am I confused about this? 65. This is interesting. (Mr Prescott) What we have is the Prime Minister's department in the Cabinet Office and I am directly responsible to the Prime Minister and the secretary of the Cabinet has a responsibility to the Cabinet. 66. There have been a lot of new units set up located in the Cabinet Office. (Mr Prescott) At the end of day there is no doubt the mountain top is the Prime Minister. 67. When a question is asked about these new units --- (Mr Prescott) I precedent will try and find a proper answer to the point you are making, why was it accepted as a question to be given and then passed on to the Prime Minister. I do not know the answer now but I will certainly do what I can to find an answer to it. Mr Trend 68. I too am very confused, former members of this Committee will remember the organogram (sic) , it was very interesting, although there was some gaps in it, and nobody under the one we had the last time round. I am pretty sure the one next time will be considerably more complex. Certainly nowadays there are few people who follow matters in the Whitehall, David Walker, wrote a piece in The Guardian, which you will have read. (Mr Prescott) I do not think so. 69. I warmly recommend it to you. He put a question, it is quite simple, "how will responsibility for health care be shared between Alan Milburn and the Department of Health on the one hand and the thinkers of progress chasers in Number Ten in the delivery unit and the office of public service rapport on the other. The delivery unit reports to the Prime Minister under the supervision of Lord McDonald and the office Of Public Service Reform, which is located in the Cabinet Office, although it falls..." It seem to me to be reasonably complicated already. (Mr Prescott) I think he has made it unnecessarily complicated, he has actually picked out all of the different people who have some responsibility. The question is, how can the Cabinet Office or the delivery Unit play any part with the Department in delivering a better policy and achieving its objectives, that is not difficult, we come together, we look at the programme designed by the secretary of state, we then pass a view as to whether they can achieve that. All this is about keeping on with the department to make sure they do not slip in the programme, that they do not find in the third year what they should have done in the second year. You can write all of this clever stuff about who is connected to who but in reality it is very clear 70. In reality either somebody take the credit or somebody will take the blame. (Mr Prescott) We will know who will take the blame basically because the Secretaries of State have responsibility to do that. 71. I hope they are all hearing this. (Mr Prescott) They have the responsibility for it. The Delivery Unit questions them about their programme of delivery, that is quite proper. The reality is we know departments do not deliver. In the Labour Governments and Tory Governments it has not always been 100 per cent delivery and all of us politicians at election time have to try to explain why it has not. We are talking about equality and we are going to try and say Ahave you got a programme to deliver on?@ In reality the programmes and the targets are very tight to achieve. If you do not do it in the first year and take the appropriate measures you will not achieve the follow up. We have to do it. Therefore, we help departments but the Secretary of State is responsible. If the Secretary of State presumably disagreed with the Cabinet Committee and said AI do not like the plan@, no doubt I would be first in having a discussion and then the Prime Minister is there if necessary. I think that is a proper way of keeping pressure on departments to deliver because the evidence is they do not always. 72. I understand you understand this and the people and the players in this will understand this. (Mr Prescott) Mr Walker should understand this. 73. They get up in the morning and they make sure that no-one has parked a taxi on their lawn and then get on with their day but in structural terms, in administrative terms, it is extremely difficult to understand. Where final accountability will lie and where responsibility will lie has traditionally been an important matter for the Government to explain. How big is your Department? How many ministers have you got? (Mr Prescott) As it says in the detail I have Barbara Roche, who is my Minister of State. I have Chris Leslie, who is another Minister. It is the same size as it was before. Gus Macdonald is involved with us. We now have someone dealing with equal opportunities. I think the size of the Department is no bigger than it was before except in the major transfer of Government civil servants. On Ministers there is not a great deal of difference. 74. You say Gus Macdonald is connected to you, does he report to you? (Mr Prescott) Yes, he reports to me. 75. And to the Prime Minister? (Mr Prescott) Yes, of course he does. 76. In different areas for different things? (Mr Prescott) No, on the same things he is doing because I need to know and report to you in Parliament what he is doing. I cannot say ARing up Gus Macdonald@, can I? 77. So he would report to you on Delivery Unit matters? (Mr Prescott) Yes, of course he does. 78. Before he would go and see the Prime Minister? (Mr Prescott) He has Mr Barber. Gus will explain it. We have to report in different ways. One, the Prime Minister is hands-on, he wants to make sure it is delivered, he is very keen about that so he has got this unit to make sure it is delivered. I have to answer for that. We meet regularly to see how it is going and we discuss with Gus and the officials in his Delivery Unit whether we are achieving it, indeed I have a direct responsibility for that, and if it is not then perhaps have a word in one or two Secretaries of States= ears about it. 79. I am concentrating on your Department. How many people now do you employ? Do you know how much it costs? Who is the Accounting Officer? (Mr Prescott) The cost is not a great deal more. Why do we not ask the Permanent Secretary to deal with this. (Mavis McDonald) I am the Accounting Officer. 80. You are. (Mavis McDonald) We have pretty well doubled, largely through the addition of the Government Offices of the Regions, since before the election. So we are approaching 5,000 staff where we were something over 2,000. These are estimates yet because we have not got the final resources agreed for the new structure for the remainder of the year. In total we expect to be spending about ,170 million a year more on administration resource costs which is largely staff and capital. 81. Are these administrative costs, the ones that are unique or the main responsibility of the Deputy Prime Minister, allocated to you and others allocated to No10? I think there is a suspicion in some people=s minds that there is increasing confusion between what was traditionally No10 staff and traditionally the Cabinet Office staff. Is the budget shared? (Mavis McDonald) I am the Accounting Officer for all the units, including the staff at No10. 82. A reverse takeover. (Mavis McDonald) This is for the purposes of the formal accounting and in the Departmental Report we send to the Committee we give quite detailed break downs of that and I would expect you to see the new attributions as we get them through in supplementaries shortly. (Mr Prescott) And the Cabinet Office has been involved in that. I cannot remember the term, I think Mr Heseltine called it the dust can or something. Chairman 83. Bran tub? (Mr Prescott) Bran tub he said, yes. Then he said that each Cabinet Office comes along and picks up different pieces, it has got the drugs and that goes to the Home Secretary, and you must make a judgment as to whether that is right or wrong. It has been a bit of a rolling stone on occasions and I suppose that is a reflection of the importance that the Prime Minister has put to things. Somebody was saying to me the other day AYou have got to make sure science is in No10", I said AWhy should it be in No10", AIt used to be before@. It has picked a lot of things up and we all have to be judged on the actions we take and what that balance is and we are presenting to you today our balance. 84. Just as a matter of fact, perhaps to the Accounting Officer, it would be the case, would it not, that No10 has invented these new units, it happens to have located them in the Cabinet Office? (Mavis McDonald) Yes. 85. They will not count as an expansion of No10 because they will count as an expansion of the Cabinet Office, is that right? (Mavis McDonald) The whole account is published as one account for No10 and the Cabinet Office. If we are negotiating with the Treasury for resourcing in the Spending Review then we are negotiating for the whole lot together. 86. In terms of numbers of staff, numbers of staff will be counted as having expanded in the Cabinet Office despite the fact that these units are working to No10 in fact. (Mavis McDonald) I think it will be quite clear where staff are located. They are located in the Cabinet Office, some of the heads of the unit work through the Cabinet Office through Ministers to No10. Some of the units are based in No10, not in the Cabinet Office. 87. It is not a question of whether it is good or bad but we are trying to get an account of it. (Mavis McDonald) We have been spending some time bringing units in and sending units out and setting up the new units. We have also redistributed some of the work that was going on before to fit in to the new agenda and the new units. That is why we have taken a little time to produce the organisation chart and update our website. We should have that for you very, very shortly. 88. We look forward to that. (Mr Prescott) And it could be easily identified. Mr Trend 89. Is it possible that before the Secretary of the Cabinet comes to us we could have the order because last time there was a great delay and it was irritating to both of us? (Mr Prescott) I am interested to hear there was a delay before. It is just total hell, all of these things, because everyone is concerned about their position on it. 90. Exactly. (Lord Macdonald of Tradeston) To help Mr Trend and his definition of the Delivery Unit, as the Deputy Prime Minister said earlier his responsibilities are broad and strategic; mine are very specific with the Delivery Unit with day to day oversight of, as I say, 30 people working to the Prime Minister who holds regular stock takes with the Secretaries of State, at which we are present. We report regularly to the Prime Minister on how his priorities are progressing, whether they have been achieved or not. We also try to offer some solutions to specific problems as they emerge or to identify those problems. In looking to bring those solutions forward of course I work very closely with the Deputy Prime Minister and try to ensure that the other units inside the Cabinet Office, many of whom I have got no formal association with, try to use their efforts to bring us the solutions that are needed in the four priority areas of health, education, transport and crime. 91. But why is it not sufficient for the guy in the Treasury to do this as part of the PSA exercise? (Lord Macdonald of Tradeston) We work very closely with the Treasury but they have got 160 PSAs so their public sector teams obviously have a very wide spread of responsibility across Government. What the Prime Minister has said is that there are particularly challenging areas, not necessarily more important but more challenging, on which this Delivery Unit will concentrate. My day to day business is to report as regularly as necessary to the Prime Minister on what is going on there and to ensure that the Treasury also understand what difficulties might be emerging. I think you will find if you have the opportunity to talk to any Treasury officials that they will now see that we are able to dive under the surface of problems in a way that would not be possible for their units with such a broad sweep of responsibility. Mr Prentice 92. Can I stick with this Delivery Unit business. I think there are two imperatives driving the Labour Government and they may be contradictory. One is to modernise structures, let us take the Health Service, and the other is to deliver outcomes. At the moment there is huge upheaval in the Health Service. If I just look at my own area in Lancashire, we have got a new Primary Care Trust, we have got the merging of two NHS trusts, my own one and the one covering Jack Straw=s constituency, we have got the creation of a new Mental Health Trust in Lancashire and we have the abolition of the East Lancashire Health Authority. That is one of the 16 health authorities in the north-west which have been collapsed down to three. And we have got all the changes on patient representations, CHCs and so on. I just wonder if it is possible to deliver the outcome that the Government wants to see at a time of massive organisational change? (Lord Macdonald of Tradeston) We are looking at a perspective of four or five years for this Parliament and inevitably at a time of change there will be distractions clearly for the people involved. But by changing the structures, of course, you might judge it much more likely that you will deliver the outcomes that you need for the patients, for the customers there. That is a decision that has clearly been taken in a number of areas, many of them, of course, having gone through as Acts of Parliament. I accept that, of course, there are difficult times in prospect for those in the process of change. I accept too that it is our job to try to reduce the complexity by ensuring that one of the principles of public life is to try and put as much of the responsibility down to the front line as is possible. We can have national frameworks for accountability and performance but the Prime Minister is very insistent in trying to get the responsibilities down to the front line, as we have done quite successfully in schools for instance. Those are the priorities that we are pursuing, not just for the Delivery Unit but, for instance, the Regulatory Impact Unit has been working and trying to strip out red tape from elements of the Health Service as well as the Police as well as the educational establishments. We want to try to focus all of the activities of these various groups on these key concerns which are the four priority areas. 93. You are much more than just progress chasers obviously. I am interested in the relationship between the Delivery Unit and individual Departments. (Mr Prescott) Reform. 94. Reform, yes. What we have been talking about is whether the Departments respond to the Delivery Unit initiative or whether you sit down with the Departments and work out what is possible jointly. (Mr Prescott) I think this is an extremely important point. If I look at New Deal for Communities I get the similarity of all these Departments= programmes and our job is how can you bring them together to deliver and focus on one area, whether it is health or the New Deal for Communities. This is a real problem for us in delivery, I do not think there is any doubt about it. That is why the Prime Minister often mentions reform is necessary for the delivery. You cannot just provide the money, it is the outcomes we are talking about and are they just simply money in and then they will deal with it. All the evidence shows that it is not. I must say in some of the evidence we have got returning where we have been measuring the outputs and seeing how we have done on the outcomes we have seen an improvement. I think it was done in teachers, was it not? It was done in teenage pregnancy. It is this cross-cutting how we get to achieve it. We will not achieve all those targets unless we can achieve that interface and the reform. That is what we are very much trying to do. At the end of the day though if we find that you cannot deliver it ---- Let me perhaps give you an example which always struck me as right for us to do what we are doing without perhaps giving an indication of Ministers involved. We had a particular programme for something and we said that should be done. I will not get into all the controversial areas about it. We set it on our cards, I went round the country and then we found that the Department did not think that was an important priority and we did not discover that until 18 months in and that is the first period of a government. I think the Department probably had the best side of the argument in this. We had made it a commitment and at the end of the day they just were not delivering it. If we do not know that earlier than 18 months before we are going to have real problems about delivery. It may argue that is not the right one you should have been promising, and I am sure there are many arguments, but we learn from experience that perhaps targeting was not done properly to begin with, perhaps we have got to change it if we want to be successful. I have no doubt the question that has been posed by yourself, how we reform delivery, how we actually perhaps lift the burden of too many commitments in too many areas and indeed be focussed on what we really want from people is something that this Committee has always been concerned about and we have got to be as concerned about the delivery and the reform of it if we are to achieve those targets. Mr Steen 95. This is in relation to one of the points Gus Macdonald just mentioned about the Regulatory Unit. Something which I have majored on for many years is deregulation. You mentioned the Regulatory Unit as trying to tackle red tape. The reality is that the Deregulation Select Committee, of which I am also a Member, has only deregulated in three areas since Labour came to office. That is on dancing, you can dance more in this country, you can drink more at different times and you can gamble more. Those are the three deregulatory areas which the Government has been successful on. I would like to compliment you on that, we have a much happier society. (Mr Prescott) As a drinking, dancing Member of Parliament. 96. There is a real problem about deregulation, that it just is not happening - just is not happening. You as an industrialist must realise that what the Tories did was the easy bit. We deregulated and really we repealed by secondary legislation. We repealed things that would take ages to go through the Commons and the Lords and we found a new device. As far as lifting the burden, and I know the Deputy Prime Minister has been interested in this as long as I have, it is not happening because society is getting more and more complicated, there are more rules and regulations coming out of Europe, and I am on the European Select Committee as well. I just think the reality is very different from the window dressing. If you have got 5,000 staff in the Department I say to myself Athere is the start of the deregulation, cut that to 50". That would be your start of deregulation. The best way to deregulate is to cut the number of staff because they then cannot enforce. (Mr Prescott) That happened in your previous administration and you ended up with more regulations than you started with and less staff. Chairman 97. When we had Michael Heseltine in front of us one day in the last Parliament, I may not have the words exactly right, he said something like AI did not believe a word of it anyway@. (Mr Prescott) I am in that school, I am sorry to disappoint you. (Lord Macdonald of Tradeston) In reply to Mr Steen, I was indeed one of those businessmen called before Mr Heseltine and I took what he said very seriously at that time. I had no doubt that his intention was to slash away at red tape and I am sure it is an aspiration of every government. We are perhaps more worldly now in realising just what a difficult job it is. (Mr Prescott) It did not help in the food industry. (Lord Macdonald of Tradeston) There may be some trends that will help us. Chris Haskins and his Task Force are doing good work. Lord Haskins believes, for instance, that the amount of regulation coming out of Europe will now lessen considerably that we are through a particular phase there. I think too we should not underestimate the commitment that this Government has given to it. As you say, we brought in the reform which offered the Regulatory Reform Orders and I hope that Parliament will be as eager as we are to see those processed efficiently because I think that is an important new route for changing legislation quickly. I have got a panel for regulatory accountability which calls Ministers to account for their Departments= regulatory performance. We have got plans requested from every Department so that we can make an assessment of whether they are trying hard enough on this front and there is a Minister for Regulatory Reform in every Department. I can assure you that the Prime Minister is more passionate about it than even I remember Michael Heseltine being. I think he means every word of it. Mr Steen 98. The real test is if you want to dance more, if you want to drink more, if you want to gamble more, thank Labour, but anything more has not actually happened. I want to come back to why and that is hygiene, because every time you want to make something cleaner everybody says Alet us pass a new regulation and a new rule@, so there are hygiene regulations coming out from everywhere, and yet, in spite of that, there have been more incidents of food poisoning everywhere than ever before. Then safety: as a result of the current world security you cannot stop safety regulations coming out, there will be more safety regulations, and security, there is no limit to the amount of regulations on security. What I am saying is we ought to be honest and your unit ought to say Alook, we are not going to succeed on this, it is like King Canute, they are coming out from every angle, hygiene, safety, security@. (Mr Prescott) Europe. Most of it comes from Europe. Brian White: The Committee has actually asked for the Minister to come to the Regulatory Reform Committee. You were not there on Monday. Chairman: I feel a speech coming on, Anthony. Mr Steen: I have finished it. Chairman: We have heard it before and it is a very good speech. Mr Lyons 99. Can I come back to the Delivery Unit and regional government. Who will make the assessment about whether the regional government objectives have been met in some way? (Mr Prescott) Our view is that regional government will lead to a much more efficient and effective way of delivering public services through the process of decentralisation. I suppose you can make a judgment if you look at Scotland or Wales whether they have achieved that because that is a matter of devolution. Our judgment would be, therefore, in delivering services as we have at the moment because most of the agencies are local authorities who deliver in most of our processes. 100. I am referring particularly to the establishment of regional government. (Mr Prescott) How would we know it is delivered? I think what motivates most on regional government is democratising many of the decisions that are taken by various quangos. I know you had a report on quangos. We have seen in the north-east, for example, various bodies and partnerships put together. Just in the north-east alone there are about 134 without any accountability whatsoever. The question about regional government is also about democratisation as well as decentralisation and that is an important question for us. You may argue is that the more efficient way to do it and if it is more democratic, and we can have arguments about that, but the political principle is very clear. What we have to do in the White Paper is look to a framework of what is the regional dimension which are many strategic functions which the London Authority has here and allow that to be accountable in the regions. Yes, it is motivated by efficiency and effectiveness but it is also motivated by the democratic concern of having many of these decisions that affect the regions decided sometimes by regional officers but within a democratic framework. 101. Would the Delivery Unit want to see some progress on regional government by the end of this? (Mr Prescott) I do not think it is the same as local government. This is a very important question as to what its function is. Is it to have executive powers or is it giving advice on strategic functions, whether it is housing, transport, planning, all very important issues. On balance, therefore, you will be judged upon what executive function you will have and that is right at the heart of what kind of local government structure you want fitting within that regional government. (Lord Macdonald of Tradeston) If I could clarify. The Delivery Unit is, as I say, only 13 people working on these four particular challenging areas. The delivery in health, education, crime, transport, of course has that very important local dimension. That is why it is very important that the Delivery Unit has to liaise very closely with the Deputy Prime Minister and the people for whom he is responsible because he has got the overarching responsibility, therefore, of delivery. The Delivery Unit is separate from that, Mr Lyons, I am just making that clear distinction now. We would want to work with the Deputy Prime Minister=s unit to know what was coming through from local government level. For instance, they have now got Public Service Agreements like central government but the Regional Communications Unit works closely with our people to keep us well informed of what is going on at local level. (Mr Prescott) That is the Government Offices acting to implement those programmes really. 102. It is a subjective science to some extent, delivery, depending on where you are. Who will objectively stand by and make an assessment of whether something is being delivered or not? (Mr Prescott) Let us say if you are going to send so many doctors or there is going to be an improvement of health, those kinds of things, that can be measured quite easily. On the regional one, which I think is the response, it has to be on some function that can be measured unless you want to measure democracy and is it better that it is more accountable than less accountable? Are there less quangos than there were before because they are now accountable to a democratic structure? I think it is much more difficult to identify in the delivery sense. There is no point in having delivery if you have not got very clear what you are asking to deliver from it. Mr Liddell-Grainger 103. I was looking at a report about the Forward Strategy Unit which would do Ablue sky policy thinking@. (Mr Prescott) It has got a ring about it. 104. It has unfortunately. The report then goes on AIt has been considered very valuable to have a body which is slightly out with the Whitehall process@. Who is responsible for this if it is slightly out with the Whitehall process? (Mr Prescott) It is chaired by Lord Birt and one or two others who would then give some ideas and thinking to the Prime Minister himself. 105. It is by Geoff Mulgan. (Mr Prescott) Geoff Mulgan is the one who does PIU and he probably sits on that but I think it is Lord Birt who has been set up to do it. The Policy Unit, which I think originally was set up by John Major in these areas, and we have adopted the same principle, they are the ones that actually looked at cross-cutting looking at various policies. I think their reports have been commented on by this Committee as being a useful way of looking at policy. I hold a strong view as well that party policy should also be intervening in this. I hear all these blue skies policies but just to balance out with the parties as well, that is the red sky one perhaps. 106. Maybe. I cannot argue with that. There was a reply to the hon. Member from Nottingham North about annual reports from government in which you announced they would not be putting out government reports. (Mr Prescott) Annual reports. 107. Annual reports, I do apologise. If we have then got blue sky committees slightly outside Whitehall, how are they then going to be accountable to Parliament if there are not going to be annual reports coming from yourself? (Mr Prescott) They are only advising the Prime Minister of the long-term thinking on policy, that is all they are doing and it has happened time and time again. I think you have got a dozen outfits in yours giving you advice about that. They are not civil servants, they are not accountable to Whitehall, it is the Prime Minister looking ahead at what he needs to do. The PIU looks across these policies and publishes reports to give an indication of the government=s thinking on these areas. I do not think that is complicated or a problem. 108. Who are they paid by? (Mr Prescott) They are civil servants. (Mavis McDonald) Lord Birt and the groups of advisers who are advising the Prime Minister are working part-time on an unpaid basis. (Mr Prescott) The PIU ones are paid though. 109. The annual report and the reporting back to Parliament is no longer going to exist. You do say that Ait will come back in a variety of means, such as reports, statistic bulletins@, I love those, A and ministerial statements and parliamentary questions@. (Mr Prescott) Do not forget the website! 110. Are we not going to have one coherent way of finding information from both Lord Macdonald and your Department? (Mr Prescott) Can I ask Gus because he has direct responsibility for that. 111. It was his letter to the Prime Minister. (Lord Macdonald of Tradeston) On the annual report, I think we can all agree that it was not a universally lauded document. I know that the Committee felt there was some value in it but I think the judgment, if you are weighing costs against benefit, was there was a great deal of work going into that chasing perhaps a chimera of objective assessment and it turned out that it was politically contentious inevitably and subject to scrutiny which was often very subjective and perhaps unfair. It was felt that four years on there were not many other ways in which we communicated information across Government. I would commend you from my experience of DETR, of course, to annual reports which are a huge source of information. It was simply felt that we should not proceed with that because there are so many other ways of getting the information over nowadays. 112. Can we take a specific case as you said annual reports. The RDA in the south- west has put an annual report in and when you look at what it says it bears no relation to what is reality. I am talking specifically about the Objective 1 position in Cornwall. The report from the RDA says they are making it work but the reality I think you will find in Cornwall, which I am not a Member for, I am Somerset, is that is not actually the position. Surely we should be told more information about how you are actually achieving what you would like to do, which certainly in the Cornish position is Objective 1 which is vitally important to Cornwall which I do not think anybody would disagree with in this House or anywhere else. (Lord Macdonald of Tradeston) We believe that we have expanded the supply of information and it now comes through many different mediums and you will be able to access that information more readily than in the past. Certainly I think that will have more value than the sadly overly contentious document that has been produced in past years. Chairman 113. I think the Committee=s view on that, just to be fair, was that it was a very, very good idea to produce an annual report which joined up accountability within government and we would have liked to have seen it improved and meet some of those criticisms rather than abandoned. (Mr Prescott) We have not totally abandoned the concept. For example, Departments all produced their reports and Select Committees would look at them but what the annual report was trying to do was bring them all together, which was quite an exercise and, as you know, made one or two little mistakes in what was reported, whether it was Sheffield or something like that, and it was used to that kind of ridicule in a way. The annual reports are there but our view is on cross-cutting things, like social exclusion, there should be some kind of thing that you will not get from an individual Department, how it pulled together. If you take the one that you are talking about in Objective 1 and what happens in the economic development, that is very much dependent on the number of Departments producing in different areas. We are looking at how we can make an effective report on issues that normally would not be in the Departments= reports or seen on the web but can still make a report of how successful are we in the cross-cutting exercise and improving the targets that we have set out for ourselves. We have not ruled out doing that, it is just that the annual report served its purpose in the sense of we have tried it, we think we can do it in a different way and we will welcome your views on it when we give a response on it. Kevin Brennan 114. You mentioned previously your responsibility in relation to regional government in England. Could you explain to us what your responsibilities are in relation to devolution in the devolved nations in the UK? (Mr Prescott) I cannot think of the title but there is one committee that deals with devolution in the British and Irish Council and I have one direct responsibility to chair there between the implementation of the devolution of settlements both in Scotland and Wales. We meet about once a year annually. The last meeting was in Scotland where we reviewed the settlement and the difficulties that might have been associated with it, things like job subsidies, do they have to be the same in every area and we get difficulties between different areas to work out. The next meeting I think is to be in Cardiff and that is the one I do chair but at the annual meeting the Prime Minister comes and we have that annual meeting and assessment of the programme. There is also a statement as well that we are working out the terms and reference of agreements between us. (Mavis McDonald) Yes, a memorandum of agreement. (Mr Prescott) A memorandum of agreement, which is always a controversial issue when you are discussing with the constituent parts of the United Kingdom. 115. I just wondered whether as part of your responsibility you had encountered any reluctance in Departments within Government to allow devolved nations to exercise their powers in the fullest possible sense or whether you have seen differences between one Department and another in the way they deal with devolved bodies? (Mr Prescott) I do not see a problem between the Departments that may, say, have the responsibility for the English regions in properly recognising the devolved power that Parliament has agreed should be given as in the settlement for Wales and Scotland. I do see problems that sometimes come from people thinking Ain Wales it is not the same as Scotland and should we not have that?@ and perhaps they want to demand more resources or more powers. That reflects itself in discussions but the Committee I am on is basically to make sure the agreements we have at the moment are properly implemented and co-ordinated across the constituent parts. 116. In terms of the Civil Service, are any difficulties encountered at the centre with having a Civil Service that is apparently serving one master, a unified Civil Service but it is apparently serving one master in one part of the UK, and possibly serving another master where there are policy differences in devolved parts? What I am getting on to, I suppose, is what lessons have been learned from the preparation of policies for devolved regions? (Mr Prescott) These are always evolving, the pressures in each part, whether in Scotland or Wales for what should be the powers and resources in these areas, those debates go on and sometimes they are pushed to expression inside the committee. For example, they may decide to do something more than they have got money for and the argument is should we provide more money or not. These are arguments that come out of operating the present agreement and this committee is a chance of settling them. Let me give you one which is a difficulty, if you like. Do you agree that in regional policy the job subsidy should be the same for all parts or should it be argued it should be more for one area than another? I think in those kinds of issues, in which I have a role to play, I certainly hold the view that it should be the same for all. 117. Is there any attempt to co-ordinate policy announcements that, perhaps, although they do not appear to be so in the media, only affect England, for example, with the policy in the devolved nations? (Mr Prescott) I think the devolved areas tend to reserve the right to say AI want to do it this way@ and we acknowledge that. I think the latest example was the Education White Paper where the Welsh said they did not want to follow certain parts of our Education White Paper and then drew up their own and published it. Providing it is within the devolved powers and agreed then they have a right to do that. Mr Prentice 118. This is to the Deputy Prime Minister. In your memorandum that you sent to us, in paragraph 13 you told us that the changes had given greater strength to Cabinet government and the committee system. My question is really about Cabinet government. There are people who say maliciously that we have a presidential system masquerading as a Cabinet government. (Mr Prescott) We are talking about the press again, are we! I am joking. Mr Trend: Talking about me. Mr Prentice 119. I just wondered what your response to that would be and if the changes have led to greater discussion within Cabinet because, again, I read in the press that the Cabinet does not meet very often and when it does meet the meetings do not last for very long. (Mr Prescott) How do they know? 120. I suppose colleagues put down parliamentary questions. I am just asking a straightforward question and would like a straightforward reply. (Mr Prescott) I am probably reflecting some of the exasperation when you see these journalists who write all this from the side really. 121. You must not be exasperated. (Mr Prescott) How long should the Cabinet take over its business? As long as it needs to discuss it I assume. I have read, and I am sure you have, that under previous Labour Governments, and Mr Heseltine=s resignation in the Cabinet, they take longer when you have difficulties inside a Cabinet. We have not experienced that difficulty in this administration. We deal properly with it, every Cabinet Member is able to raise it. We do it in the period of an hour or an hour and a half. You can ask is that as good as having a Cabinet meeting of four hours where everyone is rowing? I do not know. I am just saying that we have sufficient time in Cabinet to get on with the job. On the question you asked, which is an important one, about the Cabinet government, in the main we have not been as effective in utilising Cabinet committees as perhaps we could have been but that is because we found agreement among Ministers. Cabinet government is about where we have agreement and you send something round and we can do it by sign off. I have to do an awful lot of that in this job. Now it is very clear, particularly now I have a new domestic committee, most of the things can be referred to that committee where there are disputes and disagreements and it has to be agreed through that process. That is strengthening the Cabinet committee, it has been more actively involved, we get more agreement that way. I think as you get longer in Government you might possibly get some more disagreements and if you get disagreements you have to settle them some way. They either go to the Prime Minister and he settles them or you go through Cabinet government. The Prime Minister has made clear in restructuring the Cabinet committee that that is the first place you work out. 122. That was what I was getting at really. We are talking about a system of government which is based on bilaterals between the Prime Minister and individual Ministers. (Mr Prescott) But that always has been so. 123. But, to a large extent, there must be a lot of Ministers who are outside the loop because the Prime Minister will decide who he wants to consult on a particular issue and if referring a matter to Cabinet will take up too much time and there will be too much discussion it is easier to decide things bilaterally, then that is quite a big change, is it not? (Mr Prescott) My experience is that it is not necessarily the Secretaries of State who will sort it out and if you do it that way they are forever knocking on No10's door, are they not, and the Prime Minister is then actively involving himself trying to sort it out. I think I am available to do that job, and I am doing it. 124. A final question on this. The Joint Cabinet Committee with the Liberal Democrats, what has happened to it? (Mr Prescott) I do not know, I never sat on it. As I have already said, as they are not going to do it, it is not a problem for the future either. 125. It is a serious question. (Mr Prescott) I am sorry I have tried to give you the best answer, I did not sit on it so I do not know what it does. I had no intention of sitting on it and I did not. 126. Does anybody know what has happened? (Mr Prescott) It was a means by which we chatted with the Liberals. 127. It was a formally constituted committee. (Mr Prescott) You are right. We did have an agreement in the election on constitutional matters to discuss with the Liberals and a committee was set up to deal with that. It followed from a commitment we gave in the manifesto. I am pleased the Prime Minister did not require me to sit on it. After it had completed that work, what else was there to do? I believe the Liberals felt it was not worth pursuing any further and the Leader of the Liberals said they are not going to do any more about it and I am quite happy with that. Chairman 128. I think we have got the idea on that. Before Gordon strayed into all that, can I take you back to the first part of his question which is the nub of this in a way. In the memorandum that you have given to us helpfully for this meeting it says two things. It says that the job of the Cabinet Office is Ato support collective government@. (Mr Prescott) Yes. 129. And then later on it says that all these changes that we are talking about are to do with Astrengthening and deepening of the relationship between the Cabinet Office and No10". I put it to you, and I thought this was what Gordon was asking, I cannot read these changes in any way that strengthen collective government but what they certainly do is beef up the Cabinet Office/No10 relationship. I wonder why we have to be so coy about this all the time? Why can we not simply say that we are developing a Prime Minister=s Department? (Mr Prescott) I do not think we are intending to be coy about it. I suppose you could say AI am a politician, I am here to help@ and you could put your interpretation on that. You may be genuinely intending to help but that is our role in the Cabinet Office, to work with the Secretaries of State to see that they can deliver, they want to be successful. Look at it like this, the Secretaries of State have to get the resources to do whatever they want to do and it has to have the procedures and the policies to carry out that programme and hopefully it will be successful. There can be arguments with Treasury about whether you should have resources in these matters and Treasury has a direct responsibility but when we have a collective outcome, and in those discussions where we all sit round there can come a collective decision, that can impinge upon these areas of collective responsibility. While it is a departmental trade-off largely between the Treasury with most of the Departments with PSA they come to an agreement but any aggrieved Secretary of State who feels this is not satisfactory and cannot reach his targets will then be coming through the Delivery Units and will be in the PSX group where we will decide a government policy. This Cabinet Committee is helping, it is hoping that we can help Secretaries of State to deliver on their programmes and it is beneficial to both. At the end of the day we will stand on the final result and that is a collective responsibility with a collective government. Chairman: I will ask colleagues for very snappy questions, we are just into the last few minutes, and perhaps we can have fairly snappy answers too. Mr Trend 130. If I can make an observation following what you have said. If this had been in the last Parliament, and I think it is true that nobody has mentioned this phrase at all, we would have spent a great deal of time talking about joined-up government. I am sure other Members of the Committee remember this, it was the jargon of the day of course. With the disappearance of the annual report and nobody on either side of this exchange discussing joined-up government and more focussing on beefing up the centre, some of us think there is a sea change going on slowly but surely in the way in which we are governed and it is no longer so clear as it was where accountability rests. It cannot be attractive a job to be a senior Cabinet Member unless you are close to your party leader. I would argue it is a transfer to a presidential system of government and when that Freudian slip was made in the other House and someone referred to the Prime Minister as the President the whole House burst into laughter. (Mr Prescott) I think it was one on your side. 131. It was indeed. I think was unintentional but everybody knew what he meant. If the Prime Minister wishes to change the system of government and the Civil Service has to be moulded, it does leave lots and lots of loose ends and loopholes in terms of responsibility. (Mr Prescott) It is a serious matter and it is a judgment about the power of No10 office. I think that question could be raised right through decades of political activity. If you look at Wilson=s government, which you referred to, in the 1960s he established the Cabinet Office, and it has grown and it is no coincidence so have the political advisers who have doubled under every government in that process. This is a real and proper question. Is this the same kind of government that it was 60 or 80 years ago? There are differences. I thought Mrs Thatcher was pretty presidential, was she not? 132. Would you personally think that there ought to be some cap or level on this where it is more exciting and important for somebody to go into the spin doctor trade than become a Member of Parliament like you did? (Mr Prescott) I hope they would make the judgment that I made. I find it is better than working for a living. Leaving that aside, I do find it a difficult question to give a proper answer to. It is a real question for each and every one of us and that is at the heart of the argument about Select Committees and accountability of government, the role of the Prime Minister, how these things play a part. I have just come back from Russia and the Ukraine which are trying to develop their democratic systems and they think somehow if you get press freedom that will solve everything. I said Acome over to Britain and have a look at it@. It is a balance. It has got to balance. I do not know what the real answer is. I notice the trend and I am pleased to be actively involved in it and to be accountable to people like yourself but at the end of the day I do not know where we will end up, will Prime Ministers become more powerful or less powerful? I suspect the trend through all political parties has been that Prime Ministers want to deliver, they want to be successful and they feel they actively have to intervene to make sure that they do deliver. This Prime Minister has made delivery the issue more than any other Prime Minister and he is a hands-on Prime Minister. Brian White 133. Can I come back to the whole issue of private sector involvement in the public service. One of the lessons that certainly local councils learned was that if they did not put resources into project management and contract compliance when services were dealing with the public sector they lost out. We should treat that as red tape and cut that bureaucracy, as Anthony Steen was talking about. How is the Government going to square that circle of more resources in project management and getting the skills, which we have always been bad at, and managing the relationship with the private sector? (Mr Prescott) I do not really know. I think we have all had to learn from the private sector as the public sector. I come from a thinking that was very much public orientated but the experience we have seen over the last 20 or 30 years show there are gains to be made by working in both public and private, and we all say things about that. We have had difficulties because we have been too ideological in how we settle some of these matters. I think there is a fresh thinking to that although it is not without its problems and we can see that at the present stage and there are lessons to be learned. I was thinking when you were talking before about computers. We are always amazed in Government Departments just how something becomes so expensive and then fails completely. You have taken all the best advice, you have paid hundreds of millions out to consultants, and they are the only ones who really gain anything in this process, and you find it fails. It is difficult and it is frustrating but it is the nature of Government. 134. Because we do not put resources into project management. (Mr Prescott) I think that is an important argument that we have used for resources as well. I think the resource management argument, the changes that have been made in the Treasury, are the same kind of thinking. I cannot give you an adequate answer on the budget one, I will just follow it up. (Lord Macdonald of Tradeston) If I could just come in on project management. There is a very central issue for us and we have an Office of Government Commerce now under Peter Gershan and I know Sir Richard and others in looking at the skills that the Civil Service needs feel very strongly that we must try to train up people with an expertise in project management and also, as you say, in contractual matters too, the handling of complex contracts. There is also the IT area where there would not be natural expertise inside the Civil Service. I can assure you that the Civil Service seems to be very alert to these concerns and is working to try and repair it as quickly as possible. (Mr Prescott) Plus, if you look at the way we have done it in the Treasury over the years governments have tended to say Atighten up the finances, force them to do it properly, compulsory competitive tendering will bring in the elements@ but I am afraid looking back on that it does not, it would be better if we did project management but also generally improving the quality of management itself. Mr Heyes 135. Much of the questioning of the Committee has been about trying to trace lines of accountability and you yourself have referred to the importance of accountability through the democratic process. The key task, according to your memorandum, for yourself is to produce a White Paper on Regional Governance, as it is described in the document. I think there is a subtle distinction, is there not, between regional governance and regional government and that is what I want to try to get to. You talked about one of your decisions needing to be about what is to be the level of democratisation in the regions. I do not recall that when we were discussing devolution to Wales and Scotland that we used the term Adevolved governance@, we were talking about Adevolved government@. Does this imply something very much more watered down for the regions? If that is the case, if that is the use of the word Agovernance@, what are the implications in that for accountability through the democratic process? (Mr Prescott) I think that is a very important point. Governance may be another word that you are using instead of government but I would draw the distinction that government is directly elected representation, whether it is local government or central government. We have said as a government that we will allow the people in the regions to make the decision whether they want to go to a directly elected assembly or whatever. In regard to Scotland and Wales we have set out what it would be and they could say yes or no. What we have said is that it may be different. There is some doubt as to whether all regions of the United Kingdom want that. I remember they said that about the Regional Development Agencies but every region took them. Leaving that aside, I have to accept the possibility that if it is up to the people to make a decision whether they want to go to some form of regional government and it is elected, fine, that is government, but if other regions say they will stay with the regional chambers they have at the present time to give advice on strategic matters while the administration of government in the region is carried out by the existing local government structure, that is not government as I see it, it is a body that is indirectly elected, if you like, to carry on with it. There are different shapes of government that would take place and would flow from the argument if you give people the choice to say which one they would have. A White Paper has to address itself to that because government does not finish if they say they do not want a referendum on whether there is regional government and we have to contemplate the differences that there will be in different regions. A good example, I will finish on the point is if you look at our commitment that it should be built upon unitary government, we have said based on the unitary local government. If you are into the north-east region something like 62/63 per cent of it is covered by unitary authorities, if you go to the eastern region of this country it is no more than 15 per cent. So you do have a local government structure and a government issue in those various aspects that we have to direct ourselves to in the White Paper. Governance tends to cover them all so I went along with the modern word. Annette Brooke 136. You are coming back with some reading C (Mr Prescott) We are going to have quite a post if you ask me for something else. 137. I shall look forward to it. You are head of the Cabinet Office - I am still trying to get my head slightly round this - and we have these questions about is this really a Prime Minister=s Department. What I do not quite understand are the people, jointly or individually, who, as far as I can see, are located in the Cabinet Office, maybe they just a rent a room, but do not actually report to you. The women=s unit is one that I am particularly interested in, for obvious reasons, but that does not seem to report to you at all, as far as I understand it. I believe the Chairman of the party, Charles Clarke, is in the Cabinet Office but I cannot see how he links and how he reports to you if you are head of the Cabinet Office. We have covered Lord Macdonald does not really report to you, we discussed that earlier, but do you think you could just take those two examples. Can you explain to me how you co-ordinate all the work of Government through the Cabinet Office and yet there are exceptions there where as far as I can see perhaps you say Agood morning@ to them but that is about it? (Mr Prescott) No, again the Prime Minister is the head of the Civil Service, he is head of the Cabinet Office also. He has the whole Prime Minister=s Office in that and we are all included in that Cabinet Office. The special functions and roles you pick out, particularly the one on equality, Baroness Morgan has the obligation to report to the Secretary of State who has the responsibility for carrying out that function in her Department and that role. She sits, again, with me if they want to come into my own Committee but I have more of a responsibility with Gus because we are delivering the same areas. On the equality issues, she is directly responsible to the Secretary of State, now also to the Prime Minister, as the Baroness has chosen to do in that matter. Now, Mavis, do you want to answer on this since you are drawing all these graphs up? (Mavis McDonald) Traditionally the Cabinet Office has provided a home in terms of a base, if I can put it like that, for accounting and housekeeping purposes for a variety of Ministers who are not part of that team dealing with the Cabinet Office core business. So, for example, the Leader of the House of Lords has been traditionally based within the Cabinet Office. So if you look at our annual report then we cover a range of people who do not quite slot there but in the case of Charles Clarke, for example, to the extent that he gets any support as a part of his official duties as a Member of the Cabinet, then he has to have a channel providing support. (Mr Prescott) Which was the same under the previous administration. (Mavis McDonald) Yes. We are used to living with a picture which is broader than the traditional, if I can say, kind of front line department where you are more used to the formal hierarchy. So there is a broader group of ministers there. By and large, as the Deputy Prime Minister says, on some occasions they will come together and on others they do not. (Mr Prescott) So we have still got a bran tub. Chairman 138. You are going to provide us with a diagram with all the arrows going in the right direction so we can understand it. (Mavis McDonald) Yes. 139. We look forward to it very much. As we end, because it is our business amongst other bits of business, just so we are absolutely clear about this, we are charged with the responsibility of looking at the Civil Service. Could I just ask you who now has Cabinet level responsibility for the Civil Service? (Mr Prescott) For the Civil Service? 140. Yes? (Mr Prescott) Well, the Prime Minister does and that has always been so. The Secretary of the Cabinet reports to him directly on that, in matters where we have described there is the division of certain responsibilities for it. Have I got it correctly? (Mavis McDonald) Yes, that is right. 141. We have asked the Prime Minister to come and talk to us about these kinds of things. He said it was somebody else=s responsibility, Mo Mowlam=s. Now we have not got a Cabinet Minister responsible. (Mr Prescott) Well, we have somebody who will directly answer for the questions in these matters which will be Chris Leslie in the House of Commons. 142. Not a Cabinet Member? (Mr Prescott) No, he is not a Cabinet Member but there is a responsibility. Certainly the Cabinet Member is the Prime Minister. Mr Trend 143. We must ask the Prime Minister again. (Mr Prescott) You have the Secretary of the Cabinet coming, good luck. Mr Trend: Not quite the same. Chairman 144. Can I just ask, in addition, without going back to stuff we were doing at the beginning, I just would put it to you, the Government is committed to introducing Civil Service legislation. Would this not be the way of just showing people that if this was the first government that had actually put the Civil Service on a basis which gave it some statutory constitutional protection it would see off all these criticisms somehow about politicisation, contamination and all that? So instead of us annually saying that we are in favour of all this, why you not just get on and do it? (Mr Prescott) Well, part of that is to do with legislative time. We are not disagreeing in principle. I am not so convinced, and I have heard you on a programme and read you in evidence saying that people feel this, I do not think in the main people share those views. But, leaving that aside, you have properly expressed that and represent the people for that. We have promised to do a legislative framework and I think as you will see when the Cabinet Secretary comes, and I indeed will answer to this effect, we do intend to do that. We do not necessarily totally agree with everything you have said on that. Quite a lot of what you have said is so and we will produce that legislation. I will make it clear that it is the view of this Committee to the Prime Minister and others that you very much feel it should be an order of priority in our legislative framework. Chairman: We are very grateful to you for coming along. We share absolutely the Government=s commitment to make delivery central. We look to you as the midwives and we shall no doubt want to get the midwives back at some point to ask how the delivery is going and also how you see the system that has now been set up, as to whether it itself is proving effective in doing the job that is being done. Thank you for coming and talking to us so openly and frankly.