Examination of Witnesses (Questions 400-419)
SIR STEVEN
ROBSON, MR
JONATHAN BAUME
AND MR
JACK DROMEY
THURSDAY 29 NOVEMBER 2001
400. Thank you; but I am not sure that Steve
Robson has yet advocated sweated labour on us, but we may get
to that later on.
(Mr Dromey) Give him time.
(Sir Steven Robson) Could I just say, first of all,
I very much agree with Jack's point, that having organisations
where you have Stalinist performance targets set from the centre
is not a way to achieve anything satisfactory. The idea that we
kind of somehow use the public sector to drive forward our pensions
policy, as opposed to trying to drive them forward across the
economy as a whole, I just think is not a very satisfactory one;
if there is a pensions policy, which there is not and which there
ought to be, that ought to be advanced across the economy as a
whole.
(Mr Baume) Just a slight caveat to that, because
officials in the Treasury recently tried to use the Civil Service
as a way of driving through pensions policy and tried to end the
national Civil Service Pension Scheme and replace it by money
purchase schemes, based on the market; and that was driven by
senior officials in the Treasury who wanted to do some social
engineering, and, as I say, targeted the Civil Service Scheme.
Now that was beaten back, and we were quite happy; we have been
negotiating, I should add, a new pension scheme for civil servants
since 1997, these things do not happen overnight. A happy compromise
was reached, which does allow a defined contribution element to
the new pension scheme, which the FDA thought was actually quite
a sensible move. But I think that caveat needs adding.
The public sector pension schemes actually are very important;
I was listening, last night, to File On Four, which was talking
about the time bomb in pensions, because too many companies now
are ending the kinds of pension schemes that are still predominant
in the public sector and leaving many companies' pension scheme
members extremely vulnerable in their old age. And the news about
ENRON this morning and the disaster facing workers there, and
their shares, many of which are invested in the company, whose
stock is valueless.
Chairman: Thanks. I do not want to go any further
down the pension road.
Mr Liddell-Grainger
401. Jack, what percentage of your members work
in the public sector?
(Mr Dromey) We have 800,000 members.
402. What percentage works in the public sector?
(Mr Dromey) We have 270,000 who work in the public
sector.
403. And the rest are in the private sector?
(Mr Dromey) The rest are in the private sector and
also employed in the voluntary sector and social economy. We have
20,000 who work in the voluntary sector.
404. That was what I was interested in. Now,
what is your position on the voluntary sector, Jack?
(Mr Dromey) We are very positive about the voluntary
sector. I, personally, by the way, have worked in the private,
public and voluntary sectors. We are very positive. The people
who work in the voluntary sector are typically highly motivated
individuals. One recently said to me, that "for me, it is
community, not cash, that bring me to work for the organisation
that employs me." And the merits of the voluntary sector
are legend, but perhaps just to mention two, in particular. The
first is that the voluntary sector has been outstanding, over
the years, in terms of innovation. Anyone who has ever had a relative
die in a hospice has got a great deal to thank the voluntary sector
for, because it was the voluntary sector that was the engine of
that remarkable and caring change. And, secondly, in the voluntary
sector, we have many good examples now of outstanding combinations
in organisations that provide high quality services, engage the
community and involve their employees. I am going to give a practical
example of that, Bristol Community Sport; 13 leisure centres,
it is a co-operative, run in close consultation with the local
community. It is an excellent facility, the community love it,
our members love working for it. So we are very positive about
the role of the voluntary sector.
405. Two things out of this then. The ethos
of the voluntary sector, I think, from what you have said, you
could learn a lot and teach your members a lot about ethos. The
second of that is, under half your members actually work in the
public sector, and I got a sort of view that you were talking
about short-termism, the interference of politicians, etc., are
you not, I am trying to search for the word, it is not "hypocritical",
it is "lost", as to where you are going in the future?
Because you are probably going to have this situation where more
of your members are in the private sector, therefore you should
be looking at that, and that you can see there is a balance, which
is probably out of sync., but you do not know the answer to that,
as to where you are going, is that right?
(Mr Dromey) A preliminary comment and then two very
quick points. The preliminary comment is, we have argued for many
years that we need, unions that represent public servants, a new
mind set, whereby we see ourselves as not just the champion of
our members' interests but also of the public interest. It is
that notion of the twin champion, accepting the primacy of public
interest, but arguing, of course, that it is then true that how
you treat people who provide public services is crucial to the
quality of the service that they provide. As far as the voluntary
sector is concerned, to be frank, there has sometimes been ambivalence,
in what is called this great movement of ours, on the voluntary
sector; we do not share that ambivalence. Of course, there would
be problems if we were talking about whole-scale replacement by
the voluntary sector of public service, direct service provision,
but that is not what the voluntary sector wants; it wants a dynamic
partnership with the public sector, and we think that is strongly
in the public interest. And the final point is that, on this question
of members in the private sector, if Government has, all too often,
made the mistake of suggesting "private good, public bad",
we are not going to make the reverse mistake of saying "public
always good, private and voluntary always bad"; not least
because, you are absolutely right, we have tens of thousands of
members who work for the private and voluntary sectors, providing
public services, and their experiences range from the dreadful
to the good.
406. Can I come on to some general questions;
well, the rail privatisations, I do not want you to answer any
specifics. We have seen rail coming in, out, in; what is that
doing to the ethos of the people within that industry? You have
then got small operating companies throughout the United Kingdom,
and we all use the trains; what is that doing to the ethos of
people, and the ethos of the public-spirited—they are coming
back in again, I am talking about the employees, how is that affecting
their ethos?
(Mr Dromey) It has been deeply damaging to what was,
historically, a rather interesting ethos, on the railways; my
father, by the way, drove a train. It has been deeply damaging.
And, incidentally, there is a parallel to this, in terms of what
has happened, for example, in London Buses, where there was, historically,
a very strong sense of "we are a public service." What
you have seen, as the consequence of what has happened, coming
back to Railtrack, is a demoralised, confused, ever smaller workforce,
being asked to do ever more, and you see it manifested in a number
of different ways; but you have only got to talk to anyone right
now who works for Railtrack to see somebody who is completely
insecure as to their future, and, coming back to a point I made
at the start, it is a job, it is no longer a vocation or a service.
Chairman
407. On that precise point, is it not interesting
though, there was an old phrase called "railway servant",
people who worked on the railways would call themselves "railway
servants" and you could not encapsulate a sense of public
interest better than that; but what was interesting about it was,
that began pre-nationalisation, people who worked for GWR regarded
themselves as "railway servants". So does that not show
both what the public service ethos is but also show that it does
not just work in the public sector?
(Mr Dromey) If it was once true, and I agree with
you, that the notion of railway servant is one that goes back
for generations, that there was an army who saw themselves as
railway servants, I have to say, that is no longer true now. There
is a demoralised, confused workforce that feels bitter, and understandably
so, about the way that they have been treated.
Mr Liddell-Grainger
408. Do you see the ethos being restored, in
whatever guise it comes back, that it will have state involvement,
can that be repaired, given what they are trying to achieve, bringing
a railway up to date for the 21st century; they are still going
to have to go to external industry for a lot of the work they
are going to have to do?
(Mr Dromey) I think, crucially, that lessons have
got to be learned about the collapse of morale on the part of
the workforce; and one strand of a total solution has got to be
what do you do about that, in practical terms. And that raises
a whole number of issues, in terms of, obviously, how the people
are treated, who manages them, but also a wider issue, which we
have not touched upon today, which is crucial in the whole debate
around public service ethos, public services generally, and that
is how you involve employees and their representatives, the trade
unions, how you involve them, how you give them a sense of ownership
of the job that they do.
409. Could you not end up competing against
your own members, if you did that? Have you got employees who
are employed by, for instance, Balfour Beatty, I cannot think
of anyone else?
(Mr Dromey) Yes.
410. Could you not end up in competition?
(Mr Dromey) Yes; and, historically, that has always
been the case, that we have members in competing companies, and
that is true across the economy.
411. Jonathan, just coming on to you, because
you were talking about management and the amount of management,
you say there is not enough management in the Health Service;
is that right?
(Mr Baume) Yes.
412. How would you get to the level of getting
enough managers into the Health Service, would they come from
the Civil Service, or would they come from the private sector,
or both?
(Mr Baume) We have structures that now need to be
able to deliver good management, it is not a question of there
being a magic number, but at the moment the structures we have,
and have had in place really since the early 1990s, require significant
numbers of managers to make them work effectively. The first thing
that needs to be done is to end the blame culture. Senior NHS
managers are some of the most exposed people, certainly anywhere
in the public sector and possibly in the private sector as well,
and we deal with case after case, almost week after week, of people
who, in a sense, have been subject to personnel, HR policies,
that simply would not be tolerated anywhere else. And there is
a problem at the moment, just quietly beginning to seep through,
of finding good people prepared to take on senior jobs in the
NHS, and that really does need to be addressed; now, to be fair,
the Department of Health has recognised there is a problem, and
there are a lot of initiatives under way, the leadership programmes,
management development programmes, things like that. Now where
do the next generation come from, of senior NHS managers; it will
be a mixture of all sides, there will be civil servants from the
Department of Health, and nobody now in the DoH, for example,
will get to a senior position there unless they have spent time
working out in a Trust, and, to be fair, people in Trusts are
expected to spend some time in the centre, and that is happening
very quickly in Scotland and Wales, and it is happening, increasingly
so, in England. It is worth noting that the three heads, as it
were, in Scotland, England and Wales are all ex-NHS managers,
who are now doing the Civil Service roles, in charge of the health
for those departments, and that is great. Some of those managers
will undoubtedly come from the private sector; I do not think
there is a problem with that, there are very good management skills
out in the private sector, and I have got no problem with people
coming in and out, we have been quite happy to see that happen
in the Civil Service. There are parameters around that, but, nevertheless,
let us train people up, let us offer structures within which people
can develop their skills and their career without feeling vulnerable
to endless political pressure, in the very broad sense. But I
do not think there is a magic answer as to where those people
will come from. As Jack was saying, none of this is black and
white, it is not that the public sector is automatically better
than the private sector, or the other way round, it is trying
to recognise the best in both parts of the economy and the voluntary
sector as well, although we are not, personally, involved in the
voluntary sector, and what works, what delivers, is important.
Chairman
413. Can I ask one question, just on that. Surely,
the logic of that is that we ought to pay Health Service managers,
who are these indispensable people, who are now difficult to recruit
because they are under all this flak and do not want to do the
job, huge amounts of money, whether from the public sector or
the private sector, vast amounts of money, the Steve Robson view
of the world, I think? But, surely, then the unions would be queueing
up to say, "This is monstrous, paying all these people these
kinds of fat monies when our people are earning nothing"?
(Mr Baume) I think they do deserve fairly high salaries,
given the pressures they are under; again, there is a balance
to be struck, it depends what you call a high salary. Chief executive
salaries are somewhere between about £70,000 and £100,000,
depending on the size of the job; occasionally, as you have seen
in local government, I think, the Lambeth job, a year or two ago,
was advertised at around £150,000, because it was seen as
one of those difficult jobs to do. I think Hackney have done the
same recently. The FDA is in favour of fair salaries for senior
managers in the public sector; that does not mean we are talking
about paying somebody half a million pounds to run an NHS Trust,
it is about getting fair balances, just as more junior staff in
the NHS should also be paid fair salaries.
Mr Liddell-Grainger
414. Can I ask one very small one, to Sir Steve
and you, Jonathan. Do you think the Head of the Civil Service
now should be a businessman?
(Sir Steven Robson) How long have you got?
415. Sorry; this whole question is bigger than
us?
(Sir Steven Robson) My view is, in simple terms, that
if what we want to do is to improve our public services, one of
the interesting things about this morning is that I think there
is a sense that people do want to improve it, but the only person
who seems to be suggesting ways (which is me) seems to be the
one who is constantly on the defensive, and I am looking here
for the good ideas from everybody else, in all this, but here
is another idea. I think we have got to change the top level of
Government, if we are going to make these improvements, it is
not simply, or only, a question of trying to get diversity into
monopolies, and there are also these huge questions about getting
clear objectives, getting incentives right, throughout the public
sector. In my view, we need to be thinking about a new structure
at the top of Government, for the purposes of today, let us call
it the Office of the Chief Executive of Government, and have that
office populated by the Prime Minister, the Chancellor of the
Exchequer and the Head of the Civil Service, and the person who
is the Head of the Civil Service in that structure has got to
be, in my view, a person who has got the experience and the confidence
that goes with the successful marriage of delivery and change
somewhere in the economy. Now it could be from somewhere in the
public sector, it could be somewhere in the private sector, and
that person would have to be empowered to change staff in senior
positions in the public sector to help that Office of the Chief
Executive deliver the improvements that we want to see. So that
is my answer to your question, in a nutshell.
Chairman
416. So we will abolish the Cabinet Secretary,
we have now got this new Office?
(Sir Steven Robson) No; the decision between the Cabinet
Secretary and the Head of the Civil Service was not one I was
loitering on. But it seems to me that you do not try to separate
those roles, because, if you do, you get to a situation, essentially,
the Cabinet Secretary is part of a mechanism which formulates
policy, the Head of the Civil Service is part of a mechanism which
implements policy, you do not want to get into a position where
they can pass the buck, and that one guy says, "well, there's
nothing wrong with the policy I designed, it's that bloke's implementation,"
and we do not want to get into a position where the implementer
says, "well, I couldn't implement the rotten policy this
bloke conceived," we have got to bind it together in one
person.
(Mr Baume) Can I just quickly comment on that. I agree
with that, I agree very much with the last point, and, certainly,
in terms of reform, the FDA has fully endorsed the Government's
reform programme for the Civil Service, we were involved in the
dialogue prior to that, and we have endorsed and been supportive
of the "Modernising Government" White Paper and the
programme that is set out in that. So I do not think it is a matter
of a union like the FDA not being in favour of reform. I think
the answer to should we just bring in somebody from outside is
no, although I would be astonished if this Committee at some point
in the next few months does not start looking around that area,
knowing the interests of the Committee. We have an extremely capable
Head of the Civil Service, Sir Richard Wilson, who has committed
himself to a reform programme, which has been personally endorsed
by the Prime Minister and which Richard is driving through. I
am not convinced it is moving as quickly as it should in some
areas, and I look forward to a report that is being prepared at
the moment for the Prime Minister, I think it is delivered in
February. But I think the idea that somehow the answer is simply
to bring somebody in from outside into an organisation like the
Civil Service is the wrong answer. I am happy with the notion
that people should be able to come into the Civil Service at senior
levels from outside, whether from other areas of the public sector
or from the private sector, that happens, I think it adds value
to the work of the Civil Service.
Mr Prentice
417. Can I stick with this, just very briefly.
The DTI, specifically, is being reconfigured, as you know, four
new divisions, and we read that three non-executive directors
are going to be brought in from the private sector. What is the
FDA line on this, and what contribution do you think these private
sector non-executives will bring to policy-making in the DTI?
(Mr Baume) I do not have a yes or no answer, in terms,
are we in favour, are we against that. The use of non-executive
directors is now quite common across most Government Departments.
I cannot, hand on heart, say every single Government Department
does that, but many Government Departments now have on the management
boards non-executive directors.
418. This is sitting in a room with the Secretary
of State?
(Mr Baume) That goes further than we have seen before.
We are currently exploring exactly how this will operate. I am
also aware that John Monks, on behalf of unions, has raised the
issue of influence, the fact that the DTI is not simply about
business; the reorganisation and refocusing of the DTI is welcome,
and the new Minister, new Permanent Secretary, set that agenda
very early on, and I think that is fine. There will need to be
some clear understandings about exactly what role people play,
and how do other parts of the economy, including the interests
of employees, of unions, influence decisions taken in the DTI.
So I think at the moment we are looking at this one and we may
want to comment, but I think we need a few more answers as to
how this mechanism is going to work. I am cautious about it, frankly,
but I certainly would not want to say "no, this is the wrong
way to go" until I have explored the facts fully.
419. Just very briefly, a question to Steve
Robson on this, and I do not want to malign individuals, you understand
that, but would Gerald Corbett be a fit individual to be brought
in, who has managed big organisations, such as Railtrack, to be
brought into the DTI in that kind of role?
(Sir Steven Robson) First of all, I was talking about
the role of the Head of the Civil Service and the—
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