Examination of Witnesses (Questions 60
TUESDAY 6 NOVEMBER 2001
60. That is a very good answer. My last question
is this: will not people conclude that actually the purpose of
these Departmental Reports is not to reach a very wide audience,
but to reach a fairly specialist audience? That audience, as you
yourself said at the beginning of this discussion, likes to see
a lot of information brought together in one particular volume,
rather than having to rush round and find it, so they actually
want quite a lot of detail rather than a little, they want some
consistency of that detail over time, so the key tables that you
can compare various data series with do not suddenly go in and
out of the reports, and there were reservations about the FSBR
in previous years changing the way in which information was reported.
Finally, you want that information reported, audited and monitored
in a way in which you have confidence about the integrity of the
information and the way it is being presented; you do not want
to feel that the department is simply presenting the information
about its performance in a way that will paint its performance
in the most favourable light each time it comes to report. Are
not people going to be concerned genuinely that this move that
you are talking about is going to erode all of those things, it
is going to give less information, it is going apparently to give
departments more flexibility in how they present that information,
and it seems to me that it is going to involve very little external
audit, even by the Treasury, of the way in which the department
reports key elements of its performance, such as the PSAs? If
you were therefore somewhat to overpaint your concerns or one's
concerns about this particular development, it might be that instead
of getting this big document that we looked at earlier on, with
a tremendous amount of detail, we are going to end up in a few
years' time with a rather "pamphlety" type of document
with some rather nice photographs in it, but missing the detailed
consistency and integrity that we would actually want out of these
Chairman: That is a long question. Do
you have a short answer?
(Mr Sharples) I think that detailed consistency and
integrity are fundamental to what we are trying to deliver. If
there is an issue about how committees receive information, we
would be very happy to explore whether we can physically package
together the Estimates with a copy of the Departmental Report,
to make sure that that comes in one package for you. We are absolutely
clear that there must be consistency of reporting. That is why
we continue to define the core requirements for departments. I
can assure you that the documents will continue to be jointly
presented by the Secretary of State concerned and the Chief Secretary.
The Treasury is a joint publisher of the Departmental Reports,
and we will continue to look very carefully at the content to
make sure that clarity, consistency and proper reporting are maintained.
61. In paragraph 19 of your review you say that
there should also remain a duty to perform against targets, but
the scope of the guidance should be restricted largely to the
technical information, giving departments much greater freedom
and responsibility for presenting their activities and outturn
according to their audiences. What does that mean?
(Mr Sharples) Across Government there are a range
of departments which vary in size from huge organisations. The
Department of Health, for example, has a massive budget but has
quite a small centre. It then deals with NHS trusts which provide
services. So effective reporting on activity in the Department
of Health clearly has to go beyond the work of the Department
to encompass the activity of the service as a whole. The Department
of Health will have a range of stakeholders who have an interest
in what the Department is doingthe medical profession,
for example, a range of suppliersand it would make sense
for the Department of Health therefore to design a report which
effectively meets the needs of its stakeholders in the light of
its structure. Taking another example, the Department for International
Development has the largest print run of any department for its
Departmental Report, precisely because it has a wide international
audience for reporting on its activities, and that audience is
interested in particular aspects of what the Department is doing.
So I would not want to impose a rigid straitjacket whereby one
size fits all, for all departments; I would like each department
to be thinking about its audience and structuring its report in
the light of its activities and the needs of its eventual readers.
62. How does what you have just said relate
to the PSAs?
(Mr Sharples) The PSAs are a common thread through
all departments. Each department has an aim and objectives and
targets set out in the PSA, and that is the bedrock of performance
reporting in the Departmental Report.
63. What you seem to be saying in this paragraph,
and what you have just said to us, is that a department will have
quite a bit of discretion in how it gets to the outturn for PSAs.
That is right, is it not, it follows logically from what you have
(Mr Sharples) We want departments to think imaginatively
about these reports, in order to use the best available communications
64. Can we just stick to the PSAs? I am talking
about the outturn. Are you allowing individual departments their
own discretion in calculating and auditing their outturns against
(Mr Sharples) No, because we require all departments
to publish a report on outturn against the PSAs. That report will
be checked by the Treasury and others, and it will be published
in a consistent way. What I was saying earlier is that we want
departments to think about how to communicate those performance
reports most effectively. For example, it may be possible to include
a small graph which shows the trend on the particular target measure
of performance. That may help to understand the relationship between
past performance and future targets. It is something which a number
of local authorities have done very effectively, for example,
in reporting on their performance against comparator local authorities.
So we think there are good examples of good practice which we
want departments to draw on. We do not want to impose some absolutely
rigid "You must set it out in a table in this form";
we want them to find the clearest way of expressing their performance.
65. So they can be creative in the way they
present their performance? It is not rigid, it is not objective,
it is as to how they want to present it. It is creative, it is
imaginative, to use your earlier word?
(Mr Sharples) We want to be creative about ensuring
clarity of presentation, but we are absolutely firm in insisting
on clear and objective reporting of performance against targets.
66. To be clear, what you are saying to usand
I welcome thisis that you are talking about discretion
over presentation, not discretion over the presentation of the
outturn which a department will have to do?
(Mr Sharples) Exactly.
67. It is then audited by the Treasury or it
is validated by the Treasury?
(Mr Sharples) Yes.
68. But there is a point about presentation,
is there not, which is what you have just identified? They will
be able to do their own graphs, and they can do all sorts of different
axes and make the ascent up the curve look much more impressive
than it otherwise might be. Let us leave that, because I think
you have explained it very helpfully to me and I now understand
that. On the actual objective measuring, the auditing of the outturn
against the PSA target, you have talked about "the Treasury
and others". That is what your answer was a few seconds ago.
Again, that is what you said. You also said to us that you were
"exploring external validation". Has not the time come
now for the Treasury not only to check what "departmental
outturns" are, but for there to be some form of external
validation? I wondered whether you could tell us what "exploring"
means? What is the timescale for letting this Committee knowwe
have asked this question beforewhen ministers will be coming
to a conclusion on externally validating the outturns against
(Mr Sharples) The background on external validation
is that the Government gave evidence to Lord Sharman's Review
of Government Audit and proposed that we should do some work with
the National Audit Office and others to see how we can ensure
that the information systems which underlie reporting on the PSA
targets could be subject to external validation in order to ensure
that they are robust and reliable. We have been doing that work
with the National Audit Office and will be reporting to ministers
69. If external validation comes in, that would
obviously appear in the Autumn Report. That is what you would
be doing, allowing external validation to be done, and you would
anticipate that it would actually form part of the Autumn Report?
(Mr Sharples) The external validation would.
70. It would be on the face of the Autumn Report,
if we go ahead with it?
(Mr Sharples) The external validation would apply
to the information systems underlying the measurement of performance.
71. But you are saying it is implicit, not explicit
in any Autumn Report?
(Mr Sharples) We will have to see what ministers decide
to do in response to recommendations and advice we may give them.
The precise handling and the precise form of any external validation
is something that will be made clear once they have taken their
72. In the interests of transparency, it would
be quite nice to have all that set out, would it not, in an Autumn
Report? All this is about greater transparency. Ifand it
is a big "If"you go to external validation, it
would be quite extraordinary for it not to be on the face of any
Autumn Report, would it not, Mr Sharples?
(Mr Sharples) It would clearly make sense, where there
has been external validation of information systems, to make that
clear. The whole point of any external validation would be to
provide an assurance on reliability and robustness of the information,
and it would hardly serve that purpose to disguise the fact that
that external validation had taken place.
Chairman: Kali, I believe you want to
put a question which is related to your previous question.
73. Yes, I do. I am still concerned about the
cost of production, and you were not able to give me a complete
answer. I wondered if you could perhaps send us a note at some
point covering the points I raised? In particular, I am interested
in the cost of production for previous years, which I assume must
have been calculated at some point. Also, how many reports are
being produced? HMSO must have had orders for them, so we must
know how many have been produced and sent out to the public, so
surely from that we can make an estimate of how many members of
the public do read these reports? What estimate have you made
of the cost of production of two reports rather than one for each
department, and the effect on costs to the members of the public?
I am not satisfied that it would cost them less if they wanted
both of them.
Chairman: You will give us a report on
that, is that right, Mr Sharples?
(Mr Sharples) We shall do our best to provide the
information requested. I would just make a couple of points here.
One is that there is information, in the reports which we have
sent you, on the length of the reports. You can see, for example,
that this year reports were nearly 3,700 pages in length.
74. You will do your best to give us a note
(Mr Sharples) That is right.
75. I am looking here at the Departmental Report
produced in April by the Treasury itself. Looking at the performance
in meeting PSA targets, which you rightly say there should be
clarity about, I am looking at number 6 which is that the departmental
expenditure limits are adhered to, which is a pretty sort of fundamental
one from the Treasury's point of view. We are told there that
it is on course, then we are given an outturn estimate for the
1999/2000 financial year and a projected figure for the 2001/2002
year, and we are told it is on course. If you actually manage
to haul yourself forward to page 30you have to be pretty
sad, in my view, to do that, but all right, I am a sad personyou
then discover that the outturn estimate, which seems more or less
in line with the plans, has been achieved by taking a £3
billion underspend, chasing it around a bit, spreading it forward
into the next two financial years and using £½ billion
of it to repay government debt, and then, for the 2000/2001 figureas
to which you are just told what the projected figure isyou
are then told that the preliminary judgement was an underspend
of £1 billion and this underspend has been carried forward
into the 2001/2002 reserve, along with the other underspendings
that you would not necessarily have picked up from the figures
that you were given on page 6. That is about adhering to expenditure
plans. That is something that is absolutely fundamental. That
is what people think they have a Treasury for, as well as obviously
to save the world, to look after pensioners and all the other
things; that is what they think they have a Treasury for. You
could describe that, I suppose, as creative, but I do not think
you could describe it as clear, could you?
(Mr Sharples) The position is very clear. I hope it
has been clearly set out in successive documents, primarily in
the Budget documentation of March of this year, which set out
that we expected there to be some underspend on Departmental Expenditure
Limits, some of that underspend was being carried forward into
this financial year, and against our target of living within Departmental
Expenditure Limits, which is the prime control total for public
spending, we were on course, because that control limit had not
been exceeded. That is our objective, and we met it.
76. Are these the standards you expect other
departments to put forward in their annual reports?
(Mr Sharples) The Treasury's report, I think, is
77.a model of clarity.
(Mr Sharples) It is reasonably clear, but, like all
departments, I think we can benefit from exploring improvements
to the presentation of performance information.
Mr Cousins: Thank you.
Mr Cousins: I do not know about "Okay".
78. What consultation do you plan with Parliament
on the question of electronic publication of the Estimates? This
is, as you say, probably a prerequisite for a wider audience who
might wish to seek there for a particular purpose, but what will
the procedure be? Who will you cut out and what will be your timescale?
(Mr Sharples) We will be happy to take your advice
on the best procedure for consulting Parliament on this point.
Our initial inquiries have been with the House authorities as
to what their view would be. I should emphasise, though, that
this is something on which we will be guided by Parliament. We
want the information to be provided in a form that is most useful
to you, but we hope that you would take into account the fact
that producing a very thick, bound document is quite an expensive
operation, and, when that is being done for a very small production
run, not a terribly cost-effective way of doing things. If we
can design a way of publishing the information electronically,
we will be giving it far wider access than it has at the moment,
and we may be able to satisfy the practical needs of Parliament
by producing a print-off of the electronic version and packaging
that in a form that is easy for Parliament to use.
79. Perhaps I could interact with you on that.
I think that in your reports you have identified several potential
objectives. One of those is what we call the professionals who
tend to want as much information as possible, preferably in one
place, but who also want to be able to search through complex
documents to find the information they need, so they also have
an interest in electronic publication. There is also the audience
out there who quite likely just want to find out a single piece
of information, they do not want to spend £5,000, they do
not want fat books, they want to look up something and they are
heavily into electronic information. Then there is the third group
who are the people who write the reports. In some of the papers
they opposed the idea of having written summaries; basically they
said, "This would mean more work for us", and that it
would be quite difficult to decide what goes into the summary
and what is left out, it is just an extra layer of complexity.
I am very anxious that with the advance of the Internet availability,
both for professionals through support-source searching and for
the wider public in a realistic waythe stakeholders around
the country, as it werethat should not be held up by objections
in principle. I would urge that the departments do not have a
hard-and-fast rule that everything absolutely has to be in some
printed, bound document, so long as it is available for Members
of Parliament, for instance in a print-off. I can well imagine
that there would be complex data which would actually be quite
happy to be on the Internet main source. Would you agree that
that would be the general thrust?
(Mr Sharples) We would agree, and we would very much
welcome further discussion about how we can take advantage of
the enormous potential of Internet publishing for producing documents
which are easier to use in practice than a big, bound paper document.
There is great potential there for, for example, making electronic
links with other documents, that could be of advantage to Parliament,
and we would be very pleased to explore that.
2 Note by Witness: In the sense that it is
reviewed and checked by the Treasury. Back