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Mr. Boateng: It was a very good speech.
Mr. Grieve: Indeed, but the hon. Lady highlighted the fact that Sure Start is area-based. There is a desire not to stigmatise children by targeting individuals who could benefit from the programme, so the area is targeted instead. I suspect that she is aware of the evidence that shows that Sure Start does not reach those who need it most. If the Government want to maximise their expenditure and become more efficient, the Home Secretary should talk to the Chancellor and introduce his own Gershon review to see whether targeting is working effectively. I am a great supporter of Sure Start's aims, but the programme has many inefficiencies.
Mrs. Fitzsimons: The hon. Gentleman may wish to reconsider his comments in the light of published evidence showing that all Sure Start programmes, even the newest ones, have a significant impact. The child poverty review refers to some of those programmes and I am sure that the Minister for Children can furnish him with examples because Sure Start is the most successful Government programme in this area.
Mr. Grieve: I was not suggesting that Sure Start was unsuccessful. I have seen some extraordinarily successful examples of the programme, but I have seen others that are not working very well—it depends on the area. Area targeting inevitably means that some members of the client group to which services are directed do not receive them. At the same time, people whose need is not as great are receiving those services. I simply wish to raise the issue and have a mature debate about efficiency. If the Government want to maximise efficiency, they need to look at that problem.
Turning briefly to the improvements in productivity and the envisaged release of resources to the front line, the Home Office is supposed to generate £2.3 billion of annual efficiencies along with the Department for Constitutional Affairs and the Crown Prosecution Service by 2007–08. That includes a contribution of £1.97 billion, from the Home Office, which is a colossal sum. How on earth will that be achieved? How does it square with the fact that the administration budget, on the Government's own projections, is due to rise from £697 million to £733 million before it peaks? The figures are completely unrealistic, so I would be interested to hear the Minister's justification.
I shall conclude, because I am conscious that I am running out of time and wish to hear the Minister's reply. On a completely different note, I listened carefully to the hon. Member for East Carmarthen and Dinefwr (Adam Price), who spoke about the health service in his constituency and the Barnett squeeze. My constituency, like the rest of the country, has had seven years of Labour government. It receives 18 per cent. less than the national average per head expenditure on health
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services. Over a seven-year period, the health service has been progressively impoverished and the quality has deteriorated, yet my constituents, because many of them are wealthy, are the principal milch cows that serve to fund Government spending. They are appalled at the way the Government have presided over the catastrophe.
I have one major hospital, which is riddled with MRSA. Its maternity and paediatric departments are being closed and moved 20 miles away. The quality of mental health care is abysmal. It is nothing short of a national scandal and is entirely due to the Government's mismanagement of resources. I share with the hon. Member for East Carmarthen and Dinefwr the view that the £34 billion of extra expenditure that the Government are spending per annum on the health service has been wasted. I should be delighted to know where it has gone, as I fear that most of the programmed expenditure will be wasted, too.
6.45 pm
The Economic Secretary to the Treasury (John Healey): This has been a telling debate. The Conservatives pose as the party of choice, and it is clear from the contributions of those on the Opposition Front Bench and their right hon. and hon. Friends on the Back Benches that the British people are indeed offered a choice. That choice is between the vision and the plan set out by my right hon. Friend the Chancellor in the Budget and the spending review, and the prescription for failure set out by the shadow Chancellor in his speech to the Bow group in February.
The choice is between the Labour Government holding on to economic stability and tough fiscal rules, as set out by the Chancellor, meeting our commitments on taxation and planning to continue with historically high and rising investment in education, health and essential public services, and the prescription set out by the shadow Chancellor, who has said:
"I have agreed with my Shadow Cabinet colleagues that the baseline for spending across all of these departmental budgets will be 0 per cent. growth for the first two years".
Two years of cash-freezing departmental budgets would mean real cuts for every Department.
Instead, we plan to combine the longest period of sustained economic growth for two centuries with the longest sustained investment in public services for a generation. The Conservative alternative, as the hon. Member for Bury St. Edmunds (Mr. Ruffley) said, is driven by ideology and by the shadow Chancellor's fiscal arithmetic, returning to the same Tory policies that failed Britain in the past—under-investment in public services, charges for public services and deep, savage cuts in those public services and public investment. The choice is clear. Labour is committed to investment to secure the long-term strength and prosperity of the UK economy. The Tories are committed to cutting skills, training, investment in science, innovation and transport, and the new deal.
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Labour is committed to investing in the public services that people need and want. The Tories are committed to cutting them. Labour is committed to investing in the security of our country and safety on our streets. The Tories are committed to cutting the funding essential to our armed forces, our security services and our police. The Labour party is committed to investing to halve and then eradicate child poverty, to guarantee elderly people safer, warmer homes, and to give the world's poorest countries a chance to develop. The Tory party is committed to cutting the very measures that are bringing relief from poverty and greater fairness to our country and to the world. That is the choice at the heart of this afternoon's debate. That is the choice that faces the country now, up to and at the next general election.
My right hon. Friend the Member for Dumbarton (Mr. McFall) set out a series of questions and concerns about how the efficiencies and reforms that my right hon. Friend the Chancellor announced would be put into practice. In particular, he asked about discussions with staff, and my hon. Friend the Member for Hayes and Harlington (John McDonnell) and the hon. Member for East Carmarthen and Dinefwr (Adam Price) made the same point. Each Department is discussing the work force changes with their employees and the recognised unions; each Department is examining the detailed staffing changes with the work force; and each Department is examining with the work force and the unions ways to ensure that the maximum opportunities are available for employees to reskill and redeploy.
My right hon. Friend the Member for Dumbarton said that it was important to have a transparent process. The hon. Member for Beaconsfield (Mr. Grieve) asked for further information, and it will be set out in the efficiency technical notes, which will be a key mechanism in ensuring accountability during progress towards the headline target of £20 billion of efficiency gains. In order to ensure that the House and the public have confidence and that the measures command credibility, the Government are currently inviting the National Audit Office and the Audit Commission to scrutinise departmental ETNs before publication. Progress towards meeting the efficiency targets will be publicly reported, so the Government and each Department will be accountable for their results. I am sure that the Treasury Committee, which is chaired by my right hon. Friend the Member for Dumbarton, will continue to play an active part in the scrutiny process.
I say to my hon. Friends in particular that I understand the work force's concerns and the concerns voiced by the unions, but the measure is the right thing to do. Putting resources into front-line services must be a priority for any Government, and any good Government make savings where they can. The measure is also required: if we want to invest in the provision of public services, it is necessary to free additional resources. The measure is right and it is required, and the changes and gains are realisable. The investment in technology and the redesign of some working practices show that it is possible to reduce backroom staffing and transactional posts while improving services.
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My hon. Friend the Member for Hayes and Harlington voiced some characteristically strong words of admonishment, but I share his end objective. He said, "This could be an opportunity for real reform, if it is done with the participation and consultation of staff and their unions." I endorse that view, which is constructive, and as chair of the Public and Commercial Services Union parliamentary group, he may have an important role to play in helping to meet that challenge.
My hon. Friend the Member for Rochdale (Mrs. Fitzsimons) was right to remind us to "cut to the quick". In the end, what matters is what means most to people in their day-to-day lives. She argued for greater flexibility, so that plans and decisions are made not in Whitehall, but in the regions and local authority areas. I refer her to the series of devolved decision-making review reports, the latest of which was published alongside the Budget, and she will find that the approach set out in those reports is consistent with her arguments. She will have noted the continued support that my right hon. Friend the Chancellor set out for the neighbourhood renewal fund—£525 million each year over the spending review period. She mentioned the safer and stronger communities fund, which is an opportunity for the ODPM and the Home Office to pool their budgets to make a difference locally, and I know that my right hon. Friend the Chief Secretary to the Treasury wants to write to her with more details.
My right hon. Friend the Member for Coatbridge and Chryston (Mr. Clarke) discussed the transformation in his constituency as a result of the Labour Government's economic policies since 1997. He also discussed the success of the new deal for work, and I am sure that he will welcome the new deal for skills, which we propose to develop during the spending review period and which will help with many of the problems that he identified.
The hon. Member for Twickenham (Dr. Cable) raised some serious, almost forensic, points, and I shall try to respond in kind. He asked about the make-up of cuts and the position of senior civil servants. We start from the point that it is right for Departments to decide on the exact details of staff changes and to do so in consultation with their staff and unions. All Departments have been set a flat or declining administration budget. Given that about 50 per cent. of administration costs are pay costs, they will need to control the overall pay bill, and that will be a factor in their decisions. The hon. Gentleman asked where the dividend, as he put it, would go from efficiency gains. Efficiency gains will remain within Departments. It will be for them to decide how to allocate those resources, and it will be their incentive to make those gains in order to redeploy to the priorities that they set out. I assure the hon. Gentleman that we have no illusions about the ease with which this can be done. It will be difficult, but it can be done.
The right hon. and learned Member for Rushcliffe (Mr. Clarke) expressed similar concerns about how the efficiencies could be delivered. First, Departments have developed their programmes with Sir Peter Gershon, who has agreed that they are deliverable at this stage. Every Department has the incentive to deliver the efficiency gains because that will release resources that
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they can then spend on their own priorities. Secondly, since 1997 we have invested £6 billion across Government in new technology that will facilitate many of the savings that we can make. Thirdly, Departments will be accountable for the results of the efficiency measures that they take, which will be auditable and transparent. The National Audit Office and the Audit Commission will have a role not only in auditing the assumptions that Departments make and the measures that they use, but their progress against the measures once they are taken. Finally, Departments will receive specialist support on implementation and be challenged if their plans drift off course.
My right hon. Friend the Member for Newport, East (Alan Howarth), who is a strong champion of his constituency, made a powerful case for Newport commanding the attention of Departments, in conjunction with Sir Michael Lyons, as a potential relocation venue for the 20,000 posts that will be redeployed from London and the south-east. I am glad that we were able to complete in the spending review the business that he left unfinished during his term as Minister. We have been able to extend the VAT refund scheme for university museums and to increase the budget of the national heritage memorial fund. I am glad that he welcomes those moves.
The hon. Member for Sevenoaks (Mr. Fallon) made some important points about the potential for efficiency gains in relation to productivity, administration costs and asset sales. Let me respond to those in detail. On productivity, he was right to say that service sector productivity has been around 3 per cent. each year over the past five years. Therefore, if we interpret 2.5 per cent. efficiency gains as a 2.5 per cent. gain in productivity, we are in effect asking the whole public sector to make improvements in productivity similar to those that have been achieved over the past five years in the service sector.
On administration costs, the answer that the hon. Gentleman and the right hon. and learned Member for Rushcliffe seek was published in the Budget. On a like-for-like basis, administration costs rose to more than 5 per cent. as a percentage of total expenditure under the Tories. They have been lower under Labour and are set to fall further to 3.7 per cent.—the lowest level since the running costs regime was introduced in 1986.
On assets, we are building on the existing framework. If the hon. Gentleman consults the document published for the Budget, he will see the pattern of asset sales that we have been able to achieve since 1997 and why that gives us the basis on which to be confident in the long term about the £30 billion figure.
I am glad that the hon. Member for East Carmarthen and Dinefwr found some warm words of welcome when he talked about the regional economic development public service agreement. He said that he did not disagree with every line in the spending review document, but I am disappointed that he reached page 178 before he found something that he could support.
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The right hon. and learned Member for Rushcliffe asked whether the economic and fiscal forecast would be met. The full answer, which was given by the Chancellor in the Budget, is that there was 2.3 per cent. growth last year, with 3 per cent. to 3.5 per cent. growth forecast for this year and next year. Tax receipts are on target, and fiscal rules are also on target, with a built-in margin against the golden rule, and net debt is projected to stabilise just below 36.5 per cent. of GDP, comfortably meeting the sustainable investment rule.
As a result of today's debate and in the run-up to the general election, the British people have a choice. They can choose to have the services they need and the opportunities they deserve, with no one left behind. They will get that under a Labour Government with a vision of Britain that will succeed—
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