Examination of Witnesses (Questions 140-159)
DAME HELENA
SHOVELTON AND
MR GRAHAM
MATHER
THURSDAY 14 MARCH 2002
140. So it is the usual suspects!
(Mr Mather) The usual suspects are enormously more
powerful now. The consumer bodies, it seems to me, have made an
enormous leap, in that, for example, they will now, under the
Enterprise Act, have the power to bring super complaints against
businesses and class actions, essentially, so that we may suddenly
find there is an interest on the accountability of consumer bodies
themselves because their new powers are so different from their
previous role. People may begin to ask about the accountability
models within that.
Mr Heyes
141. Like the Chairman, Mr Mather, I thought
I was reading a revolutionary pamphlet when I started going through
it. You were really motivating me to join you in this great case
you were making in favour of democracy and against the transfer
of powers away from politicians but you seemed to be saying, basically
that there is, a "depoliticisation" of many government
decisions and that is at the heart of what you are welcoming about
this. But is it not the case that what is happening really is
that decisions are being moved to a different political arena?
It is a non-elected political arena, staffed by people appointed
through the process Dame Helena has spoken about which in some
ways seems to be a little mysterious. It is certainly not codified
or readily understood. It seems to me likely to produce a particular
type of person, with a shared value system: "the usual suspects".
That is the new political arena, is it not, that is making what
are in fact political decisions? But doesn't your paper welcome
the depoliticisation of decisions?
(Mr Mather) I think it is resolved by recognising
that these people, the new decision makers, are not responding
to the vote motive in theoretical terms. They are free from the
rent seeking, vote seeking, populist, short-termist pressures
to which elected politicians must be subject. Having been one
myself, I am very aware of it upon either side. I suspect, therefore,
that the question of whether this is a good thing or a bad thing
must be resolved by evidence and I would put as my first piece
of evidence the experience of the Monetary Policy Committee for
the Bank of England, that since we have depoliticised, in my terms,
those decisions, we have had a better ability to tackle inflation,
we have had a more serious debate about the subject by politicians
of all parties—I see Michael Howard's statement this week
recognised that it was the right decision to take. So, whilst
I am certainly very conscious of the need to measure by evidence
whether the new decision-making system is working, I think the
lessons so far in that sort of arena suggest that it is, and the
lessons on the other side, the old public services run by ministers
and departments (Health, Education, Transport) even the Prime
Minister seems to think are not quite right. So, if one was drawing
a map of the functioning British state: things which work well
in it and things which do not work well, I would suggest that
in many of these areas the new bodies (electricity, gas, we have
talked about, fertilization embryology—very difficult ethical
issues, the whole audit world) Britain has gained enormously by
transferring the decision-making power and the remaining problems
tend to be concentrated in the area where traditional ministerial
and civil service approaches prevail. So I personally am quite
uncompromising about this: I think the evidence speaks for itself.
142. Dame Helena, after your opening remarks,
I should declare a sort of interest: I was a CAB manager before
I started here. I am familiar with the world you talk about and,
certainly, elections are an important part of the way that organisation
is managed and run. I felt from the way you spoke that you see
it not just nostalgically but, in a way, you see some real benefits
of elections compared with what I have just described as the rather
mysterious way in which you were appointed to these other positions
you have held. Is there not a very great difference of opinion
here? I am trying to provoke some disagreement between you.
(Dame Helena Shovelton) One of the things I struggle
with on the business of how elections work with the bodies—and
I am not talking about politicians now, I am talking about people
on quangos, basically—is really seeking to understand how
it could ever practically work. I do not know how it could practically
work. Well, I did know how it could work in the CAB services:
it was a smaller, self-contained organisation and the rules were,
if you like, clear and understandable. There are issues that are
not usually put to the test. For instance, in my mind it would
be perfectly interesting and acceptable to appoint everybody,
from a politician's point of view, onto a government body but
then to allow that group of people to decide who was the best
person to chair it, for instance, rather than to appoint the chair,
so that the level of interference is less. You chose a group of
people you trusted to do something and then it was up to the group
to decide who they felt was the most competent amongst them to
do it. I think that would be a perfectly acceptable and clear
way of moving forward. It might easily mean you landed up with
a group of people being very clear and happy with the person they
had chairing it, whereas they might or might not, now depending
on the circumstances. I think that is not always easy to do and
there are certain jobs where I do not think that would be possible,
because the people concerned would need to have very particular
skills or the bodies do not operate in that same corporate fashion.
The Competition Commission operates, for instance, completely
different from the way the Audit Commission does in terms of the
way members are involved and the way the organisation is run.
For instance, we will have quite large meetings at the Competition
Commission where major topics are discussed but the day-to-day
organisation is entirely handled by the chairman and deputy chairman
and the secretary of it rather than the people who are members.
At the Audit Commission that would be totally different and the
members would be involved, meeting on a regular basis on the way
in which the whole organisation was going forward. The difficulty
is: how do you bring a set of rules in that is one set of rules
to such a complex and different variety of bodies that operate
in different ways? I find that difficult to understand how one
could do that fairly and well.
143. You are arguing a case in favour of an
electoral college approach?
(Dame Helena Shovelton) Yes, I think that would be
certainly something to consider. I do not say it would be better;
I think it would just be different.
(Mr Mather) I think it is an excellent idea. You have
not provoked any disagreement on that. It would be a very valuable
development. The only risk in it, of course, is that it may further
divorce the thrust of the organisation from the wishes of ministers
and therefore it does make what I call the "call-back system"
terribly important, the precision of legislation. On which, if
I may, just bring in very briefly a European dimension. The Lamfalussy
procedure, which means essentially that a lot of European legislation
will now be done outside the parliamentary system by the European
Commission, does have a very innovative call-back system, which
means that the legislation itself will be sun-setted and parliament
itself can intervene when it thinks something has gone astray,
so it is then exercising a proper scrutiny in a very focused way.
It seems to me that that offers a very interesting model for this
country's potential future technique. But, if I may just go back
to your last question about the difference between elected and
appointed: without overstating this, I think those of us who have
ben elected politicians know how many decisions have to be taken
very quickly on a sort of rule of thumb: Who has put forward this?
What do we do about that vote? They are taken in a matter of hours
and we hope we get them right. In the appointed bodies, you cannot
operate like that. You have to operate, whatever the procedure
is, more seriously, on a longer-term basis in a more sober fashion,
not least because it is subject to judicial review, for example.
And it does seem to me that that has advantages which we have
to be frank about.
144. Have we not simply gone too far for a call-back
system to be introduced or made effective? The power has gone
too far away from the hands of politicians. Your paper demonstrates
that.
(Mr Mather) We may be on the cusp of it. I think,
if, for example, your Committee was not inquiring into this and
there were not opportunities to focus on it we could find it would
be very difficult to get the right balance again. But I am sufficient
of an optimist to believe that if we are spotting this thing as
it happens and if we are imaginative about these techniques we
can get the balance right rather than have a rather juddering
clash between the two worlds in a few years' time.
(Dame Helena Shovelton) Here you get some margin of
disagreement. To me what is interesting about this is that when
you are operating within these bodies you do actually feel highly
accountable, even if everybody in the world is telling you that
you are not. I know that, for instance, people are always saying
that the Audit Commission is not accountable to people. It is
used as an example because it was set up in a very particular
way, the legislation, which was unusual, to put it mildly, compared
with other bodies. But I was sitting down last night trying to
work out whether this was actually a fair way of looking at it.
I looked at the evidence that was given when another select committee
looked at this whole issue about a year and a half ago, and what
fascinated me was how many different points there were in the
political process for the Audit Commission, both within parliament
directly and with the ministers, actually being given information
and they could have intervened in any part of that process. What
was fascinating was that on the whole they did not. So it was
by omission that it feels like the Audit Commission is not accountable,
rather than actually the facts of the issue. I can remember, when
I was chairing it, bringing in the notion of, and having, open
meetings, for instance, which had never been done before—going
round the country and having these meetings and asking members
of the public in and asking local authorities to talk to us about
what was wrong with our performance, etc. Not all public bodies
do that. So there are all kinds of different levels of accountability
within this and I think the difficulty is to make a broad statement
about it without actually looking at the particular for many different
bodies.
Mr Trend
145. Dame Helena, perhaps I could press you
a bit further about your departure from the Audit Commission.
The Committee has had evidence from people—we recently had
the ombudsman in and he clearly is not very happy with the business
of the Parliamentary Commission for Standards—and a number
of people must feel very sore about the way their employer or
their appointer—whoever that is, but at some level it must
include the Government—has treated them. Do you feel that
you were badly treated in the way you left?
(Dame Helena Shovelton) I am a fairly grown up person.
I know life rarely goes entirely smoothly. What I would say is
that it did not feel like the best moment in my life and I was
pleased I was going on holiday for a fortnight afterwards and
I had time to consider where I was going and what I was going
to do. I think that ministers have a right to decide who they
want chairing the bodies that they have a right to appoint people
to. I was obviously not the person they wanted to do that. It
did not feel fair, but that is a different issue. Fairness is
not what you always get in life. All I can say is that I think
you have to accept these things and move on, which is precisely
what I have done.
146. I can understand, from a personal point
of view, that is very sensible advice and I am sure we would all
take it in life's disappointments. You said about the CAB that
its rules were very clear and understandable. It is obvious that
the rules in this developing state which Graham Mather describes
are not clear and understandable, and it would be possible, if
wicked spin doctors got to work, to suggest that you were inefficient
or corrupt or inadequate for the job, but to have no stated reason
whatsoever must be an appalling position to be in. Graham Mather
believes that you are an excellent and very hardworking chairman.
(Dame Helena Shovelton) That is comforting.
147. What does one do in these circumstances?
(Dame Helena Shovelton) I do not think you have any
power, so you just have to accept your lack of power. It is difficult.
I am not saying it is not difficult, but you are appointed for
a term. I was not dismissed, therefore I could not ask for the
grounds for my dismissal. My contract came to an end, they decided
not to renew it. That is a very different thing from being dismissed.
One has to note the difference between the two. Nobody made me
any promises to say I would do two terms. The fact that the previous
people had done one term and some had done three meant that this
was obviously an issue that was open to interpretation and question.
I had certainly hoped to do two terms. I had not expected to do
more than that because of the way the rules had changed, so that
commissioners, for instance, knew when they were appointed they
could not do more than two terms. It was, indeed, disappointing
not to do a second term because all kinds of things were in my
mind that I was working towards doing. But I think you always
have to accept that when your face does not fit you have to go
away and try to behave in a dignified and proper fashion.
148. In political circles, faces do not fit.
There is enormous instability within a cabinet or shadow cabinet
or even a party committee. From week to week faces fit and faces
do not fit. This is a world which we inhabit courageously but
knowing the risks. I do not think it is fair to ask people in
public service to have a sort of hybrid set of rules, some of
which are understood and some which are not and, indeed, might
be briefed around by a very powerful government spin machine suggesting
this or that in a way which the press grasp in a sensational way.
Why should people of real talent and ability put themselves forward,
knowing that they are going to behave straight and are going to
do a proper job, spend a lot of time, not be paid nearly as much
as they might be paid in a purely private role and yet they are
also subject to all sorts of vicissitudes and the viciousness
of the political system?
(Dame Helena Shovelton) Because you have sort of half
joined it, have you not, by going into this world? You know, you
could either keep out of it or go within it, and I think you have
to accept the territory is different. I have certainly had said
to me—and this is not rumour and supposition—by a
considerable number of people whom I would have considered to
be good people to go into the public appointment system, that,
as a result of the various different actions that have happened,
that it is not a route they would consider choosing in the future.
So I think these things, if they are seen to be unfair, can have
a limiting effect on the way in which people wish to be involved.
I think that is very unfortunate. I genuinely think that people
are wanting to be helpful to the way in which this country is
run in all kinds of different ways and there is much more a sense
of public duty than most people give the nation credit for. I
do think it seems as if life is different now than maybe it was
20-25 years ago, in that one would have been a very unremarkable
person if one was doing the sort of work that I have done. The
lottery, I think, is a different situation because it is much
more of public interest than the Audit Commission. The Audit Commission
is something that, frankly, if you say you chair it most people
have no idea what it is and get it immediately muddled with the
National Audit Office and you go into a hugely complex debate.
This is not usually the sort of news that hits the headlines.
From a fairness point of view, for anybody who is entering a field
of doing a job I think it is absolutely right and proper that
somebody comments on their performance in that job. That needs
to be done in a systematic way against a set of rules. There should
be a proper appraisal system. If you then knew you were not doing
well, you would not expect to be re-appointed. If you were doing
well and you had been told it and you were not re-appointed, you
might feel quite taken by surprise. I think it is a quite uncertain
system from the candidate or incumbent's point of view, to go
through an appraisal system that you have no idea what it is and
nobody speaks to you about it until a decision has been made.
149. I would agree with that. It seems to me
that at the heart of this, as Graham Mather, says, is an issue
of accountability. Bizarrely we had a senior civil servant last
week who was acting very like a politician. In order to get answers
to questions, or at least to try to get answers to questions,
we cast our net ever wider because we are looking for people who
might know the answers and it seems to me to be an unsatisfactory
situation. Perhaps I could ask Graham. Graham, in this paper you
suggest that politicians have become more showbiz—and there
clearly always has been an element of showbiz. You say, ".
. . it may be that politicians are now beginning to specialise
in presentation, spin and networking, leaving the difficult decisions-making
role to Britain's new decision-makers." If I could ask Graham,
why have politicians done that? Because, as you say, they have
given it away voluntarily. Is it because they are becoming more
cowardly or less able to do this job?
(Mr Mather) I think the stakes are getting higher.
Taking food safety, or human fertilisation, for example: these
are terribly, terribly difficult at an administration, policy
and even moral level. I think that under the pressures of other
activities it is quite understandable that ministers say, "I
would rather that this was handled by an expert body." I
think the experts are prepared to take on that role, but I do
detect signs, talking to regulators especially over re-appointment,
that they are becoming a little uneasy about it because that is
where the system comes back in on them again, and may make that
commitment of time. For example, if you take a very senior professor,
someone from the top of an international company and someone from
abroad; after they have given of themselves in these highly complex
areas that are highly important to our country, and it is not
known at the time whether they will be re-appointed—it may
be delayed or the department may make a hash of it or they may
approach people on the side and that may then leak out—it
is doing a terrible injustice to those people. I do come back
to the feeling that we are already seeing some of our regulators
who have told their departments, "I am only going to do one
tour. Your plan holds no terror for me because I am not seeking
re-appointment. I therefore feel I have a completely clear relationship."
If we institutionalise that, then I think that would give comfort
to a number of other people and avoid some very difficult problems
that we have seen in the appointment system generally.
150. I think that is a splendid solution to
a pressing problem, but I still do not quite understand why politicians—I
am sure you are right that things are more technical and the risks
are greater for politicians; but politicians like to pull levers
and push buttons when they are in government, and to deprive yourself
of the ability to do this, except by extremely crafty ways when
re-appointments come up, it just seems that there is an element
of lack of self-esteem in politicians perhaps.
(Mr Mather) It may be that Britain's political class
has lost some of its self-confidence. Perhaps that is linked to
the under-performance of some of our public services, which those
who operate with them cannot be unaware of. I suppose it is also,
in part, that there is a trend, a fashion, a habit. Whitehall,
once it gets into a model—it is rather like privatisation;
it may be argued it went a little too far because they got on
to auto-pilot. It may also be arguable that this quangocracy—another
election of decision-makers—could risk becoming on auto-pilot,
but the elected politicians forget or do not re-design for themselves
a proper role in it. That is really the purpose of writing the
paper.
Chairman
151. Why are ministers involved in this process
at all? Why should you be calling on a minister to be told whether
you were to be re-appointed to the Audit Commission or not? I
quite see that ministers should have a job of specifying what
the job is and what the requirements are, but why on earth is
the minister involved in doing this?
(Dame Helena Shovelton) I do not know. I cannot say.
I genuinely cannot say. My experience is that ministers are involved
in these decisions, and that is how the system works. Whether
it is right or wrong, that is how it works. I knew that decisions
would be made at a political and ministerial level whether I stayed
or not. What I was not aware of was whether it would be made on
an issue of competence. That is the dividing line.
152. Instead of having ministers decide there
is a Nolan type person on these things, why do we not just do
it properly as with other types of jobs? You would decide on a
job specification and have a procedure to fill it, and then the
procedure should decide on re-appointment. Why are politicians
involved at all?
(Dame Helena Shovelton) I do think some of it comes
back to the fact that most places, whether it is government or
not, find it extremely difficult to operate good, fair appraisal
systems, and therefore people are genuinely diffident about trying
to remove people from positions. When people who were originally
appointed for an unspecified period of time way, way back, were
appointed for the job and did it until they fell off the perch
at the end. That was not thought to be satisfactory, so people
then brought in terms of office. But people are very reluctant
to genuinely engage with somebody else's performance, make decisions,
and act as if they are your boss, which is basically what the
relationship is, but it is not. This is the difficulty of it.
That is why the business of the electoral college is a useful
notion because then the performance is being judged by people
who are actually watching you on a daily, if not weekly, basis,
and seeing whether or not you are doing the job properly. If not,
it is very clear that at a certain period of time you can make
any set of rules you like, like the CAB, once a year; and the
board has a right to say whether or not people should continue
in that capacity. Reports can be sent from the board independently,
privately, to ministers, who could then be in a position to say
whether people should be removed from that board. There is no
doubt that across the wide spectrum there are people who perform
less ably than others, but that issue is never dealt with. That
is not picked up in the political system at all.
153. In the NHS now, the Government has moved
to having an NHS Appointments Commission because of all the flack
around appointing chairs and non-executive members; so now we
have taken that away into a separate independent channel. If we
can do that for the Health Service, what is different about that
from the rest of the quangocracy?
(Dame Helena Shovelton) To me, the interesting thing
is that you can make any system in the entire world on paper,
but the real thing is if it comes down to either head-hunters
or the people doing this having in their minds lists of people
that they are going to appoint, so that no system will ever work
fairly or properly. You have to get to the point whereby selection
is done on merit in a very wide field. Then, once that is done,
you get into a position whereby there will be a choice of candidates.
I think it is perfectly reasonable, if you are a minister responsible
for a department and wanting a particular policy to be undertaken—that
that policy has at least somebody who can take it forward. I do
not think that has to be somebody who is politically aligned,
so I do no see those two things as being absolutely necessary.
(Mr Mather) The NHS Appointments Commission may be
another example of where it is more trouble than it is worth.
Instead of it being an advantage, for ministers having the right
to sign off on these, it becomes a big political problem; but
the other side of that coin is that you now have commissions appointing
commissions, and they may vanish into a vortex. There is then
the question: at what point does it re-connect with elected democratic
politics? That is why it does seem to me that as well as using
electoral colleges where appropriate, confirmation hearings would
be a very valuable way of preserving that link. Ministers often
do the job—to answer an earlier question—because of
statute. They appoint the Director-General of Telecommunications,
and you cannot easily change that. But Parliament is not properly
evolved, as I think we are all probably agreed, and the confirmation
hearing approach may strengthen the best practice that Dame Helena
mentioned: peer review, appraisal, predictability and proper procedures.
They could all help police the system.
Mr John Lyons
154. I think that the whole question of an individual's
performance is important. If an assessment is made annually, somebody
has to have a good reason for not appointing at the end of that;
but the failure to do that offers no protection at all. Were you
told at the beginning of your job that you would be assessed annually?
(Dame Helena Shovelton) No, nobody made it clear at
all how I would be assessed during the period of my appointment,
nor had it been clear while I was a commissioner. I presumed I
had done well as a commissioner because somebody wished to appoint
me as chair.
155. Was appraisal never mentioned at all?
(Dame Helena Shovelton) No, although, as chair, I
was asked by the department to give comments at the moment of
appointment on the commissioner's work, and I did that. I never
did that without discussing with the commissioner first what their
performance was and therefore one could go forward with a view
that they had participated in that process. That was not something
I was required to do; it is something that I did.
156. You mentioned the hope for public service
agreements, service delivery agreements. You also mentioned the
role that the Select Committee might take in that process. Do
you have any comment?
(Mr Mather) I think that the PSAs and the SDAs could
be enormously valuable in bridging the divide between decision-taking
or executive agencies and ministers and departments. They are,
however, at the moment, Cinderellas, in the sense that very few
people know about them. They are not topics of everyday conversation
in local hostelries. Even in Whitehall, they are rather arcane
documents that cause a lot of angst when they are negotiated,
typically with the Treasury, but then presumably are put on a
shelf and forgotten about for a while until the next one comes
round. Why not make use of these Cinderella documents by saying,
"we expect in the relationship with a particular organisation
that it will be captured in the PSA or SDA, and as a Select Committee,
when we see you in the course of our regular or occasional inquiries,
we will hold you to account against those documents." It
seems to me that we have a vehicle with some valuable roles in
the present system, which are little understood but which have
potential to help this Committee and others in their search to
promote accountability.
157. They have been very successful in some
voluntary organisations with local government and the demands
made in terms of service delivery and based on the funding. It
has worked very effectively.
(Mr Mather) I remember the National Council for Voluntary
Organisations did a paper when these contract techniques were
coming in, and they said that, "we need to make sure that
we extract efficient and agreed outcomes whilst not selling our
own soul", and I think they have been rather effective in
protecting the independence of voluntary organisations that are
providing services, whilst giving a concordat for both sides on
what they are expected to deliver.
158. Do you think there would be opposition
from departments and ministers in regard to that kind of accountability?
(Mr Mather) If you go round departments, they do to
some extent regard it as a sort of Treasury power bid and a means
to cramp their style, especially as they are linked to finance,
but I think, more soberly, people appreciate that you cannot any
longer have budgets without declaring what you are going to do
with them, that we all have to operate in a rules-based system,
and that these agreements are valuable in the trade-off process.
I think departments ought to be prepared to say in this case,
as in other areas, that they are prepared to forsake some of their
old administrative discretion, which often means they do not specify
what they are going to do, but wait and see what turns up. If
we are being grown-up, people should abandon some of that for
the greater certainty of these new methods.
159. Is there any practical way you could get
the hospital trusts involved in this, some of which are spending
millions of pounds in budget, but when there is no recall or accountability
for how that is spent and what was delivered for that money?
(Mr Mather) I think, when I look at the nine—now
ten—interlocking bodies in the National Health Service,
all trying to produce some level of accountability, I sympathise
with that question. I think, though, that the complexities in
the present system are of an almost Railtrackian dimension. We
need a very deep and thorough re-examination of the whole system
of National Health Service financing, accountability, service
delivery and contracts, of which that focus on the trusts would
be a part, but only a part.
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