Examination of Witnesses(Questions 500-519)|
THURSDAY 27 FEBRUARY 2003
500. So there are only one or two inside a government
at any one moment?
(Professor Barber) Yes.
501. If we go down to level three which also
involves the Prime Minister but not quite level four, how many
of those do you have?
(Professor Barber) The Prime Ministerlooking
at the reports we provided for him looking at an overview of delivery
towards the end of last yearhas selected roughly eight
or nine such things that he is focusing on for this six month
period through to July, then we will see whether those problems
are solved and possibly refine that list.
502. What are those kind of things?
(Professor Barber) For example, things to do with
accident and emergency waiting times where the Health Service
is making progress but the target is for achievement in December
2004 and there is still a great deal to do. Another example would
be primary school literacy where there was great deal of progress
between 1997 and 2000 but the level of performance since then
has been flat and the Prime Minister would like to see that going
in the right direction again. So those are a couple of examples.
503. When you were reported as having flagged
upindeed it is your job to flag up such thingsthat
there were real problems on the health side in meeting the 2005
target (they were doing all right with the interim targets but
were having problems with the real 2005 target) that presumably
leaps into high intensity drive, does it?
(Professor Barber) What I drew attention to were the
risks involved in the large sums of money that were being invested
by the Treasury in health reforms and the scale of those reforms.
In his evidence to your Committee Nigel Crisp accepted that those
risks are there and is, indeed, working hard to manage them. I
would expect to see some real progress on those health waiting
time issues both in the short and medium term as a result of very
good work being done by the Department of Health on those reforms.
504. When the whole PSA system was set up a
key component was that if you do not meet the targets you do not
get the money. I have the quote here from Gordon Brown more or
less saying this. Is that how it works in practice?
(Mr Macpherson) No, it does not work like that. I
think if you look at the quote which you have, it precedes the
publication of the first set of PSA's in 1998. I think that that
document made clear that there is not a simple formulaic relationship
between success against targets and resources. I think that is
absolutely right. Clearly the Treasury has an interest in a department's
capacity to spend money sensibly, so if a department or agency
demonstrates a lack of capacity over time, in spending reviews
we would take that into account in terms of the allocations of
expenditure. I think that what difficulties against individual
targets result in is greater focus from the centre of government
in terms of helping them overcome the barriers to delivery.
505. It is interesting you say that because
Gordon Brown in July 1998 which, if I remember correctly, was
the time of the first spending review, was quite clear. "Each
department has reached a Public Service Agreement with the Treasury,
essentially a contract for the renewal of public services. Money
will be released only if departments keep to their plans."
(Mr Macpherson) I have in front of me the first white
paper setting out PSA's which was published in December 1998 which
says, "Should a target not be met there is no question of
money being deducted from the budget for that department, nor
will additional funding over and above that already allocated
be made available simply because a department is failing to meet
its targets. Support and advice will be given." That was
published in 1998.
506. That is interesting. We will not do the
textual analysis, but it means that between July and December
1998 this basic building block disappeared.
(Mr Macpherson) It has always been the case that the
PSA framework has evolved and it is evolving. It has not and never
has been completely set in stone. I think as time has gone by
the framework has developed and has been improved. If you look
back at that 1998 white paper there are something like 250 targets;
now there are less than 130. Similarly the quality of those targets
has improved since then. This framework was starting from a particularly
low base because prior to 1998 government departments on the whole
did not have targets and this was a big reform. Inevitably, through
1998 the precise framework of PSA's evolved.
Sir Sydney Chapman
507. Professor Barber, the Delivery Unit was
set up immediately after the 2001 general election.
(Professor Barber) That is correct.
508. You mentioned earlier on in reply to a
question from the chairman, that although there are milestones
for achieving targets, the targets are to be achieved by 2005
(Professor Barber) They are examples, but if you look
through the PSA white paper there are a variety of end dates.
I am not saying that all the targets are for achievement in 2005
509. Clearly there is a political motive. I
am not saying there should not be, but there is a political motive
in meeting targets. It is presumably so that the Government can
show the British people that targets have been achieved, almost
achieved or not achieved within the life-span of the expected
length of a parliament.
(Professor Barber) The spending review results in
targets which are normally around the end of the three year spending
period for which the resources have been allocated. Resources
allocated in the 2002 spending review will start being spent next
month and will come to an end in March 2006. That is why the targets
tend to be aimed at 2005 or 2006, although in some servicesHealth,
for examplethey go through to 2007 and 2008 because of
the five year spending allocation. It is related to the spending
allocation rather than the electoral timetable.
510. The questions I am going to put to you
are related to things which have been said to us during our inquiries
so far. Mr Macpherson, I think you inferred that there were too
many targets and they have been cut back. I think you mentioned
250 targets and you wanted to reduce those to 125.
(Mr Macpherson) I think the system of targets has
evolved. The original number was 250. That came down to about
160 in 2000 and is now down to around 125. That is the way the
framework has evolved. I think it may evolve further, but certainly
at the current time we think that is about the right number.
511. We were told less than three months ago
when we visited Bristol that there were 62 targets alone in the
NHS. Do you have any comment on that?
(Mr Macpherson) What the Treasury agrees with departments
are the high level Public Service Agreements and I think in the
case of the Department of Healthbecause a lot of targets
relate to social servicesthere are something like twelve
targets. How, then, the department translates those high level
aspirations into individual targets for particular trusts or other
agencies is ultimately a matter for them. My understanding is
that even they have been reducing the number of targets over time.
It is also worth bearing in mind in the case of the Health Service
what a very broad range of activities is covered by the Department
of Health. So I am not wholly surprised that there are something
like 60 targets, but that is a matter for them in terms of how
they choose to achieve their particular Public Service Agreement.
512. We were told that trying to achieve a particular
target sometimes damages the prospects of achieving another target.
(Mr Macpherson) I think the thing about targets is
that you do need to keep them under review. There are good targets
and bad targets. You can sometimes have a good target which may,
over time, result in perverse incentives. It should not if it
is a good target. The more outcome-focused it is, the less likely
it is that there will be perverse incentives. The key thing is
that you need to learn as you go along with targets. As Michael
made clear at the beginning, we are in a learning business here
and we do need to continue to look at the effect that targets
(Professor Barber) The targets are representations
of real world outcomes that we want to achieve. I am very familiar
with the national literacy strategy target of 80 per cent of children
getting level four in literacy. The real world outcome you want
is children moving to secondary school able to read and write
well. That is what you are after. The target is a representation
of that and then your data collection system is the way of monitoring
whether that representation is being achieved. But it is the real
world outcome you are really interested in, and in the kinds of
areas you are talking about you need to monitor for those perverse
consequences as well as what is actually happening on the target
and take all that data into account when making judgments about
how to go forward.
513. Professor, you were advisor to David Blunkett
when he was Secretary of State for Education so that fits in.
I will keep to the NHS for the moment. I am not saying that the
evidence that we received on the point I am going to make now
was widespread, but it was mentioned to us. In setting targets
it is quite possible that in meeting them you could distort the
quality of the service given to the public or the proper delivery
of services. There is a target to increase the number of operations
in the NHS. That puts pressure on those carrying out the operations
to deal with the easy ones so that you can do more in a day than
perhaps the more difficult ones or the more important ones or
the more urgent ones or the ones with more priority. That has
been put to us quite seriously. Not only that, but consultants
are spending less time on examining patients with possible medical
conditions. Would you like to comment on that? It is a very sensitive
point and that is why I am giving you the opportunity to comment
rather than hurling accusations.
(Mr Macpherson) I think whether or not you have targets
there will always be those sort of trade-offs. I am sure that
so far as the individual patient is concerned the more attention
you get from a consultant the better. Equally, resources are always
constrained; you have to manage around that. I do not think targets
will necessarily result in perverse outcomes if they are properly
specified. I do not doubt that in some circumstances they can.
It is very importantand this is fundamental to our philosophy
on targetsthat the front line is continually consulted
about the setting of targets. The Chancellor reaffirmed that in
the recent pre-budget report. Target setting should be as much
a bottom-up process as a centrally imposed top-down process. If
you really do get a framework which is outcome based where the
front line is fully involved in determining the targets, you are
well on your way to having a pretty robust system.
(Professor Barber) In my previous answer to you I
emphasised the importance of real world outcomes and the targets
are a representation of the real world outcomes. It is the real
world outcomes that you want, so achieving a target by some means
that does not really achieve the real world outcome is not what
we are after. You took evidence from Mr Filochowski from Bath
who talked about the value of targets in setting clear priorities
and using that as a way of galvanising the hospital that he worked
in and improving the efficiency of the organisation. As Nick says,
those trade-offs exist whether or not you have targets. The targets
give clear priorities, clear direction and a sense of mission
to the organisations, so they are wholly beneficial as long as
you are focused ultimately on the real world outcome that the
514. In the light of what you have both said,
I must say to you, without any hesitation, visiting a hospital
and visiting a school we were toldand my colleagues will
correct me if I am wrongthat there was absolutely no consultation
before the targets were set. There was no consideration of, for
example, the particular conditions of one inner city hospital
or of a county hospital elsewhere. The policy may have just changed
recently and therefore it has not seeped down yet, but there was
a lot of ill-feeling that the people on the ground delivering
the sharp end services were not consulted at all; targets were
imposed from above.
(Professor Barber) I read the evidence that, for example,
John Bangs from the National Union of Teachers gave to the Committee
and he talked about the regular annual consultation that his organisation
responds to on the education targets and what is published. He
did not say what you have just described. What I would want to
emphasise is that we see in the future even further involvement
of front line workforces in the setting of targets for their services
and I also want to emphasise that the period that I described
right at the beginning in my opening statement of radical change,
improving standards over a consistent period is going to be demanding
for public sector workforces. The benefits will be huge in terms
of the investment and the sense of working in a system with a
mission and a direction that is increasingly recognised as successful
by the public, but it will be demanding and when you go to a school
or a hospitalas I do from time to timeyou will find
people debating and thinking about the process of change and how
it can be refined. That is an inevitable part of the change process.
515. In the Prime Minister's second monthly
press conference last July when he introduced you and you gave
your slide show to the assembled media, his official spokesman
talking about improvements that had been made, said for example
that 300,000 more operations a year were now taking place. There
were now 39,000 more nurses and 5,000 more specialists. This is
the perpetual song in politics. I can remember when my party was
in government, so long ago now, and we were boasting so many thousand
more nurses under the conservatives and expenditure on the NHS
was going up and so on and so forth. The point I want to make
is this: are the targets set necessarily meaningful and the right
ones rather than political ones? For example, if a government
thinks it can increase the number of nurses by 50,000, does it
then say it will make the target 40,000 so it is a triumph? Is
there any independent, non-political input before the targets
are set? You are boastingquite rightlythat we are
spending more and more on this and more and more on that, but
surely the public are entitled to say that therefore it not a
boast to have a few thousand more nurses or a few thousand more
operations. There ought to be really tight and strict challenging
targets made that will show the public that it is right for us
to spend more money on the National Health Service or on education
because if we do not do that they might suggest that perhaps the
structure of our education system or the structure of the NHS
(Mr Macpherson) I think you are absolutely right.
It is important to focus on what the money delivers rather than
inputs. Inputs are important; they can have symbolic significance
and there may also be input milestones. If you think that actually
to achieve your waiting time targets you need x thousand
more doctors and y thousand more nurses, then it is almost
certainly sensible to trumpet your achievement of those inputs.
What we have been trying to focus on increasingly in terms of
the target systembecause this is what I think matters to
the tax payeris what we are getting in exchange for the
taxes you are paying. It is nice to know that there are a lot
of committed public sector workers out there, but actually the
bottom line is: are you treated on time, are you treated well
and efficiently, do you have to wait a long time in A&E, are
your prospects of life-expectancy and so on improved? It is those
things that matter. I think also another interesting area which
we are exploring increasingly as well is the whole question of
consumer satisfaction because I suppose there is always the slight
risk that you achieve the outcomes but it still does not feel
that great from a consumer's point of view. I think it is important
to track consumer satisfaction. Certainly as far as the Treasury
is concerned, resources do matter, they do demonstrate commitment,
but it is not the resources so much as what you are getting with
(Professor Barber) Can I just add to that. You referred
to the press conference from July and to what the journalists
described as a bewildering array of slides that I showed. I just
wanted to say that I thought they were very simple and straightforward.
If anyone from the press would like them clarified I am very happy
to do that! More importantly, the targets in the PSA document
are very outcome-focused. The targets in here are not about more
nurses or more doctors. That is only part of the Treasury reform
of the targets. In setting a target obviously you are looking
at the historic trends and the data and you are making judgements
about the degree of ambition. You are also making judgments about
the floor targets, about the degree to which you want to level
up through your target-setting process. In all of those are judgments
you use the available evidence but then make a judgment about
the future and where you can get to. Where the targets are ambitious,
as in health or secondary education to take two examples, those
targets will require the services to get involved in structural
reform. They are not targets that can be achieved simply by doing
more of the same. That is why, parallel with moving towards the
targets for 2008 set out here for the Health Service, there are
a series of very important structural reforms taking place because
those will enable the achievement of the targets. They will not
be able to achieve those targets simply by doing what they have
been doing in the past.
516. I was interested in something that Nick
Macpherson said in answering questions from Sir Sydney when you
said that there are good targets, there are bad targets and in
some circumstances they can result in perverse outcomes. I wonder
if that is something that you agree with, Professor Barber?
(Professor Barber) As a point of principle there can
be good targets and bad targets, yes.
517. Can you give us some examples?
(Professor Barber) I could give you a couple of examples
where targets have been improved over time. There was one in the
first Treasury white paper that Nick quoted a few minutes ago
from December 1998 where the target wasI am not quoting
exactlythat the department which was then the DETR should
consult with local government about how local government should
consult with business to get business more involved with local
government and services, or something along those lines. Nick
has probably got the text there. It is not clear where the outcome
is from that process. It has two levels of consultation. It is
not clear how you would measure progress towards it. There is
no such target now. If you take another example where there has
been refinement of what was quite a good target to make it an
improved target, the national literacy strategy target which I
think was always very clear and specific had a floor target element
which was the minimum standard that should be achieved by each
local education authority in literacy. Indeed, in the 2002 spending
review that was refined so that it addresses not the minimum standard
achieved by a given LEA but by a given group of schools, so it
is making it more specific, more school related, whereas the previous
target would have allowed the LEA to achieve it but you could
have had some schools within that LEA achieving well below the
floor target. Those are two examples.
518. Do you think the original waiting lists
targets were good targets?
(Professor Barber) I think that was a perfectly good
target for the period of time that it applied, but obviously we
have moved on and we now have waiting times targets.
519. What was different about that period of
time that made it a good target then but not such a good target
(Professor Barber) There was a lot of focus and interest
in the waiting list and it was important to demonstrate that the
waiting list could be reduced by a given number. Once that was
done it was right to move on to waiting times which obviously
have greater salience to the consumers of the Health Service.