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Mr. Howard Flight (Arundel and South Downs): Does the hon. Gentleman believe that the whole targets approach adopted by the Government is practical, given that the private sector gave up on it about 15 years ago because it did not work? It produced distortions, cheating with numbers and all the problems to which my right hon. and learned Friend the shadow Chancellor referred. It would be helpful to know whether Liberal policy is in agreement with that.

Mr. Laws: The hon. Gentleman anticipates my next comments in which I shall pick up on the distortions that the existing targeting regime has caused and argue that we would prefer a much lighter-touch approach in respect of overall targets because micro-management by targets has clearly failed.

When the targets were first set up, the Chancellor gave the impression, as he began to emerge from the Conservative straitjacket on spending, that in exchange for additional public expenditure there would be incredibly rigorous monitoring of public service agreements and that anyone who failed to perform in

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relation to public service targets would be penalised in consequence. In fact, the Secretary of State for Work and Pensions said in a press release in November 2000 that there would be

In other words, a clear impression was given that if Departments failed, there would be a penalty to pay.

By the time that the Chancellor gave evidence to the Select Committee, that rather formidable and frightening prospect seemed to have receded entirely. It appeared that there was not only no prospect of Departments being penalised, but that Departments would monitor their own performance on public service agreements and report on themselves. In other words, the Treasury's oversight—and the initial impression that it would be involved considerably—seemed to have disappeared altogether. When the Chancellor was asked by hon. Members from different parties whether there would be any penalties if Ministers failed to deliver on public service agreements—in the Home Office, for example, where 11 out of 16 targets had failed at that time—all the Chancellor could say to me was:

In other words, the sanctions that were going to apply at the beginning of the process seemed to have disappeared entirely out of the window.

When we pressed the Chancellor further on that matter and asked what would happen if the Home Secretary did not deliver, we were told that no penalties would be applied and that it would be a matter for the Prime Minister and the electorate. In other words, the great system of Treasury control over public service agreements, the monitoring, penalties, rewards for performance and so forth, had all gone completely out of the window, so it was left to the Prime Minister to consider the problem and to the electorate to hold the Government to account. I am sure that the electorate will hold the Government to account when that opportunity arises.

Mr. Bercow: Leaving aside the important debate about whether the Treasury or individual Departments should be the arbiters, does the hon. Gentleman agree that for the Government to fail to meet targets set by independent experts would be disappointing, but that for the Government to fail to meet more than a third of the targets that they have set for themselves requires incompetence on a truly spectacular scale?

Mr. Laws: The hon. Gentleman is right, and that is why we hope that the Chancellor will take the opportunity to intervene to tell us whether the memorandum from the Chief Secretary, which has apparently gone to the Public Administration Committee, is accurate. If it is accurate, and the Government have missed a third of their targets, that is a serious matter, because both the Chancellor and the Chief Secretary may have misled the House.

Mr. Liddell-Grainger: As a member of the Public Administration Committee—I think that I am the only one present, because the Committee is sitting at the moment—I can tell the hon. Gentleman that we are still

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considering that issue. The shadow Chancellor has done much work on how many targets have been missed, but we cannot get the answers.

Mr. Laws: I am grateful to the hon. Gentleman for that insight. I hope that he will continue that probing, because it is very necessary.

Mr. Clifton-Brown: Does the hon. Gentleman see a paradox in the Government's approach to local authorities and Departments? The Government make local authorities meet their comprehensive performance assessments and penalise them if they do not, but the Government do not penalise Departments if they do not meet their public service agreement targets. Is not that a case of do as I say, not as I do?

Mr. Laws: The hon. Gentleman is right. If he read the statement made in the spending review 2002 by the Chancellor about which individual public service delivery units would get penalised if anything went wrong, he would notice that Ministers and Departments were noticeably absent. By that time, the idea that Departments could be held accountable had gone out of the window. It was schools, hospitals and local authorities that would be held accountable, not Ministers and Departments.

The Government's targeting regime has other problems and I hope that the Secretary of State for Health will detach himself from his conversation now, because he may be interested in my points about the health service. Targets in the health service potentially distort performance and priorities in many ways, but one of the issues that must be of concern is the way in which the Government are targeting only the in-patient and out-patient waiting lists. They are not targeting the waiting time from consultant to consultant or the waiting time for diagnostic tests, both of which hon. Members will find raised most often in their post bags and constituency surgeries. In many areas, those waiting times are still more than a year and sometimes more than two years. I welcome the fact that the Government are trying to bring waiting times down, but if we are to make the public service agreement targets meaningful to people, they must apply to all aspects of waiting times, especially to the diagnostic waiting lists, which can be so important for treatment.

I hope that the Secretary of State for Health will scrutinise the way in which the targets are recorded, and whether they are credible. I have an example from my local area of the ways in which the Government record some of those vital statistics. It was raised with me by a constituent who saw in the local newspaper that the local trust had met the six-month in-patient waiting list target. The trust has done a fantastic amount of work to bring its waiting list down, and that is welcome. However, the individual in question contacted me about cataract surgery, because his experience was at odds with that reported in the local newspaper. He had waited for between six and 12 months to have one of his cataracts treated but, in order to speed through the waiting list for cataract treatment, the other cataract was not done at the same time. After he had had the first cataract treated, he was put on what is called a planned

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waiting list, which is taken in date order and on which the wait is approximately 12 months. In the health sector, we give indicators that pretend that we are treating people within six months, while, across the country, the actual experience of many people is that they have to wait longer. In commenting on the issue, the hospital said that the regulations about what it counted and did not count were set not by it but by the Department of Health.

Dr. John Reid: I do not know about the individual case that the hon. Gentleman raised, but I caution him, as I did Dr. Bogle last week: I have no doubt that, as in any organisation, when there are targets or objectives, people will occasionally try to meet them by means with which we would not agree. The hon. Gentleman should be careful not to add his voice to those who for their own reasons have no sympathy or support for the national health service and want to portray the commonality—

Mr. Stephen O'Brien: The right hon. Gentleman wants to gag them.

Dr. Reid: I have no wish to gag any criticism, but I do not want anyone to support the impugning of the integrity, hard work, dedication and professionalism of the vast majority of those who work in the national health service.

Mr. Laws: I was not aware that I was impugning the integrity either of the health service or of people who work in it, and neither was my constituent who raised the issue with me.

Dr. Reid: Will the hon. Gentleman accept that it is neither common nor typical? The vast majority of the 1.3 million people active in the health service are dedicated and committed professionals who would not stoop to means of deceit. That is all he has to say. The constant chorus from the Opposition and one or two of their allies in the media to denigrate and run down the NHS will get no support from the Government Benches.

Mr. Laws: The Secretary of State has been sitting next to the Chancellor for too long. He is using the same tactics of distract and evade as the Chancellor used during his speech. He is trying to take us away from the issue, but I hope that he will take those points seriously.

I understand that the right hon. Gentleman's predecessor was concerned about those issues, especially in relation to diagnostic tests. If we put such an emphasis on waiting times in the health service, they must be credible and understood by our constituents.

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