Examination of Witnesses (Questions 180-189)
DAME HELENA
SHOVELTON AND
MR GRAHAM
MATHER
THURSDAY 14 MARCH 2002
Annette Brooke
180. You make a statement that you ascribe to
the new decision-makers. You say ministers feel more comfortable
if decision-making can be moved elsewhere. Do you subscribe to
that view? Is that part of the motivation in setting up quangos,
to avoid the difficult decisions?
(Mr Mather) People who have made this point to me
when I have gone round researching, have tended to be the decision-makers
themselves. I have asked them: "Why do you think you have
ben given these powers?" That is the answer that tends to
keep coming back, the first answer they give. They might have
a more public one about skill and expertise, but their first off-the-cuff
reaction is that ministers do not want to have to take this decision.
I believe that unless and until we disprove it, that is the quite
strong motivation. Ministers may still want to be involved at
another level, which may be the appointments or perhaps the crisis
management. As they see some of the confusions when they get the
structure wrong—and I will use the Railtrack example again—ministers
may begin to doubt whether they have done the right thing in handing
over power in this way. The railways have five different non-elected
bodies taking decisions: the Office of the Rail Regulator; the
Strategic Rail Authority; the Department of Transport; the Treasury;
and the Forward Strategy Unit is now involved, with Lord Birt.
There are then the interests of the train operating companies
themselves. Ministers may say, once they realise they have escaped,
"should we be taking some of those decisions?" That
is, in a way, a different problem from their wishing to hand over
fertilisation or food safety to someone they think will do it
better.
181. I do not think you have really answered
my question about your view. Dame Helena, can I approach the same
question in a slightly different way: from your experience of
quangos, is it your view they are just set up to deal with all
the difficult questions and to pass the buck?
(Dame Helena Shovelton) No. I think that is too cynical
a view. From my perspective and the work that I have done on those,
some of them have a longer history than others so it is difficult
to generalise. Some of them are reactions to previous circumstances,
and I would put the composition of the National Lottery Commission
into that category because there had been something before that
had not worked in a successful and smooth way, so a different
model was sought, which was the model that I got involved in.
Interestingly, I understand that it was a model that had been
put around Whitehall as not necessarily being the most successful
model to choose, and other departments eschewed that, so it was
only the DCMS that decided to go down that route. From my point
of view, it is genuinely interesting—and I do not know the
motivation—that ministers do not use quangos more as detailed
advisory boards so that they can chew through a subject, which
they need to at huge depth, and then say, "right, we have
done all of that; what is your advice?" They then take that
advice and go ahead with it, which is very much in the mode of
the Competition Commission, for instance; or they decide differently
if they think there are reasons of state that overtake that particular
circumstance. To me, that would be a perfectly reasonable way
of operating, and I have no problem with that whatsoever. Would
I be happy to work on quangos that were in an advisory capacity?
I do not think you can generalise, and that is my difficulty in
answering your question.
182. I will pick that point up because, going
back to Graham's paper, I was surprised that he questioned that
the Monetary Committee, which has been accepted across parties
as being very good, was so different from other quangos. Can we
make these generalisations? Should we be sifting them into different
categories and then sorting out the very relevant issues when
they come through in the discussion? I am not sure that we have
one model, one fix, to sort it out.
(Mr Mather) I think that is a fair point. If you look
at the dates on which they were established, as Dame Helena says
there is quite a wide spread. They often have been established
for different purposes. I believe we are seeing a convergence.
Dame Helena mentioned the first lottery regulator who was a sole
appointee.
(Dame Helena Shovelton) Absolutely.
(Mr Mather) She said that that was perceived not to
work as smoothly as might be wished, and therefore there was a
move to find another strategy. We have seen that across a range
of other decision-taking bodies. There are sufficient common factors
and sufficient similar approaches in the areas we have been discussing
this morning to make it possible to draw some general conclusions.
I would, however, of course accept your point that there are operational
differences and differences of level. I, myself, earlier tried
to draw the distinction between the decision-takers and the representational
quangos. You are also perfectly right to remind us that different
sectors generate different issues, and the same solution may not
always apply across the board.
(Dame Helena Shovelton) I do not know the motivation
of ministers, as I have indicated at various moments this morning—I
am not very good at doing that. I think genuinely you have to
look at the way in which decisions are now made, received, and
treated. We have not actually talked about this, but we live in
a culture of blame and I can see that certain difficult decisions,
if you were a minister, might be quite nice not to have to take.
However, if I was a minister, I would want to have the responsibility
for taking them, so it is not something that I personally sympathise
with.
Mr Brian White
183. Is one of the problems that ministers may
want to give away that decision-making but at the end of the day
the media will hold them accountable, and the Prime Minister will
be asked what he is going to do about a particular issue? There
is the situation where questions are put to a politician, who
may not have the levers of power to rectify that situation.
(Mr Mather) Yes.
Chairman
184. Is that not the bit that is missing from
this discussion? It does not take away the fact that the people
who are being asked to account for all this power that has gone
away are the politicians. There was a nice moment yesterday in
Prime Minister's Questions. The Prime Minister was asked about
Postcom and all that. You saw his difficulty. He was havering
between thinking, "it must be a good idea to have shifted
this power away to get liberalisation of the market, but at the
same time it may be producing consequences that I am going to
be held accountable for, but I am not taking the decision."
(Dame Helena Shovelton) That is why I personally,
if I was a minister, would wish that responsibility to rest with
me.
185. The people out there will say to themselves,
rather like the old Brussels argument that everything is done
in Brussels—"if the power has gone from politicians,
why on earth do we go out and vote for anybody?"
(Mr Mather) I suppose the mature answer to that question
is to say that the Prime Minister ought to be able to answer Postcom
by saying, "we have designed a system that actually works;
I am pleased with that and, as a result, the public will benefit"—but
that may be a counsel of perfection. In the end, clearly, as Chairman
Mao once said, politics takes command. The politicians will be
the people who are ultimately held to account, and all the things
we have talked about this morning operate under that framework
of parliamentary control.
186. When we had a Postmaster General who was
in charge of the post, you knew who to kick if the post did not
work. Now, people have no idea who to kick if the post does not
work. Surely, that is a huge deficit that has opened up?
(Mr Mather) I think we knew when the electricity,
the gas, the water and everything else did not work. We knew who
to kick, but we could not make it better. Since we have transferred
the responsibility for operational decisions, most analysts agree
that the services have got much better: there is more choice and
more innovation. The late privatisations are the more difficult
ones. I will be quite frank about the incoherence of the regulatory
system: I do not think the railways could conceivably work, other
than by accident, in a regulatory system that is designed as it
is. That is our fault, as politicians and as a matter of governance.
It cannot entirely be blamed on the subordinate bodies that have
been set up to run them.
187. Dame Helena, when you had been approached
and appointed to the Audit Commission, if it had been said to
you that as part of that process you had to be run past a parliamentary
committee—I think I know in your case what you would say,
but do you think that might be a disincentive to people to come
forward to those kinds of bodies?
(Dame Helena Shovelton) I think it might be a disincentive,
but I do not believe it would necessarily be improper. I do believe
you have to, if you want these jobs, go through as many hoops
as people feel comfortable putting you through because they have
serious levels of responsibility. I have never felt it wrong that
anyone questioned people and really got to the bottom of whether
they thought that person had the merit to do the job. It would
very much depend, to me, on the way in which the questioning was
done, whether there were divisions on party lines, where known
avenues were wanting to be gone down. That would be no better
than the system now. What one needs, as a candidate, is to feel
you were being interviewed or being asked to account to a group
of political representatives, with equal numbers of people from
all parties so that you could feel there was a totally fair representation
on all bodies.
188. I do not know if it is true, but I read
that a reason for your non re-appointment is that you were too
user-focused, as opposed to being too top-down-ish. It occurs
to me that if these issues had been explored with you in a setting
like this at the time of your appointment, it would have been
much harder to come back to you if you had said, "I want
to give a much stronger voice to users in this process than before".
(Dame Helena Shovelton) The interesting thing was
that I believed the reason I was appointed was because that was
my focus.
189. The mystery deepens further! We have to
try and answer this perennial question of who audits the auditors,
who inspects the inspectors, who watches the watchdogs. We have
invented a system, which Graham documented admirably in the book.
That is what the world now is. The question of who puts any kind
of system into this, who oversees it, who sorts out all these
glitches that we have ben talking about—it seems to me that
there is not anybody that does that. It has just happened. The
question is whether there is a way of inventing a mechanism, whether
in Parliament or attached to Parliament, that might have some
chance of getting some grip, some coherence, on this whole system.
The worst thing would be to invent some other commission to look
at all these commissions.
(Mr Mather) I think, yes, in the centre of government
there clearly is a niche, perhaps in the Cabinet office. We had
the old Central Policy Review Staff. It is certainly in that area
that perhaps ministers ought to have people helping them overcome
the glitches and understand the strengths and weaknesses and take
their part of the decision. I suspect in Parliament that the confirmation
hearing approach is a natural development to Select Committee
work, though it would have to be exercised with restraint, with
not too much politicisation, too much inquiry into private lives
or tax returns or too much wanton destruction of harmless appointees
because they did not perform well on the day. That will deter
people; there is no doubt about that. The third dimension is training,
a centre of expertise. A lot of this seems to me to operate by
peer pressure and collegiality. You deliver on these bodies because
your colleagues expect it and you compare yourself with other
bodies and other regulators. You learn from each other and share
expertise—from the Financial Services Authority, the Independent
Television Commission. There is a risk of cross-fertilisation,
and I think that needs an academic centre to help the regulators
themselves with that exchange.
(Dame Helena Shovelton) I think nobody should underestimate
the role of the National Audit Office. It does not necessary function
in this way, but it is perfectly possible that it could. It, after
all, audits the accounts of every single one of these quango bodies.
It has the only overall picture of the whole thing. When I was
chairing the Audit Commission, having the NAO come in and take
a rigorous look at the organisation and commenting, and having
the accounts put before Parliament, meant quite a lot to me; it
was not a trivial exercise to be gone through. I would have thought
that the NAO was admirably placed to look at all the different
quangos and how they were operated, and where the duplication
of roles is. All quangos go through five-year FMPRs, the financial
management and performance review. The very first year of that,
in my experience, having done this several times in different
places, is spent on seeing whether the organisation should exist
and whether this should be looked at. Eminent academics are appointed
to do this work, but what happens is that the different political
questions are not necessarily answered. For instance, the very
first question, to my mind, when we were doing the review of the
Audit Commission, was this: should the NAO and the Audit Commission
operate in this rather duplicatory way in relation to the Health
Service, but at the same time be required to be different in the
way they operate? Nobody was going to answer the question. I asked
people, and it was pushed lightly aside. The too difficult questions
need to be brought to the fore, I think, and then political debate
needs to establish where people wish us to go. I do not have any
views on where it should go; I just think this should be sorted
out. Duplication is unhelpful both to the efficient operation
of the quango, and to the public because they have no idea who
is actually in charge and accountable.
Chairman: That is a very good note on which
to end. It has been a very, very good session this morning. I
am grateful to both of you.
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