Select Committee on Public Administration Minutes of Evidence

Examination of Witnesses (Questions 80-99)

1 APRIL 2004


  Q80 Mr Prentice: The Lyons and Gershon Reviews reported to the Treasury but what kind of input did the Cabinet Office have into those reviews?

  Sir Andrew Turnbull: Again the Efficiency Review has been a joint effort. Maybe the idea started in Number Ten, but the first mention you will find is in the '03 Budget document. Treasury then did some work on it. Adam Sharples wrote a report about methodology and approach and then in June and July I got together with Peter Gershon and people in the Treasury to work out how we would structure the review and how we would do the work. The work has been done out of the Treasury to a design which I devised. It has straddled the two departments and we are kind of co-owners of it.

  Q81 Mr Prentice: Okay. Is it deliverable? I ask that question because I have a piece by Nicholas Timms from the FT in front of me here and he says "When Gordon Brown committed the Government to public sector efficiency savings worth £20 billion in his budget speech even his own officials were not entirely clear what he meant". You know where the savings are going to come from?

  Sir Andrew Turnbull: I know how he has calculated them. If you look in the Budget document there is a particular category called "Resource DEL", that is basically the spending of departments on services, which is separate from capital and annually managed expenditure which lists debt interest, and so on. That number is £263 billion, 7.5% of that, in other words 2.5% over three years, is almost exactly £20 billion. That is how that calculation is done. There is then what counts as an efficiency saving: some of it will save money; some of it will release more frontline time to doctors, the police; and some will offer an improvement in services. Some of these are cash in hand savings and some of them turn up as improvements in the service. That is how the calculation is done.

  Q82 Mr Prentice: I was interested in how deliverable this is. It was a major part of the Budget speech, he was saying 40,000 civil servants' jobs are going to go. You think that is obviously deliverable.

  Sir Andrew Turnbull: That was 40,000 in two departments. Yes, I think it is deliverable. When you think of the power of technology, of e-enablement in delivering services there are major savings that can be made. In all of the advice we get from the private sector about procurement they all tell us that by comparison with the savings that large companies have made we have still got a great deal of scope to drive much harder bargains and manage projects better. We also believe that the way we organise the back office functions and draw up accounts, pay bills, keeping track of people and all their HR data can improve very substantially.

  Q83 Mr Prentice: How are civil servants taking this because they would say some of those back office functions are essential and they should be provided by civil servants rather than say Capita, which is what is going to happen in the Department of Work and Pensions?

  Sir Andrew Turnbull: Firstly, they are essential. The question is really how you do that. The first thing is, do you run these systems in ways which are terribly complex? Can you gain by simplifying them? Secondly, can you make savings by getting small organisations for example the Cabinet Office who are spending about £250 million is a small organisation. We have the full gamut of finance systems. We have an HR system we can share with other organisations. We are working on a project to pool our resources. There is then a quite separate decision, once you have simplified it, whether you will have it for one department or whether you will run this across a number of departments. There is then a separate decision about whether you provide that service in-house or whether you out-source it. On that you take what should be a quite straightforward value-for-money decision. We do not start with a presumption that one is better than the other.

  Q84 Mr Prentice: Do you think this is hugely going to damage morale in the Civil Service?

  Sir Andrew Turnbull: It is certainly a challenge to the leaders of the service to lead the service through this major process of change. Handled badly, yes, but not if handled well. You can get to a point where you have a sense where you are working for a highly productive, highly effective organisation and you get the buzz of success.

  Q85 Chairman: Lyons recommended that 27%—I hope I not have got my figures wrong—of the Cabinet Office could be relocated, do you think you can deliver on that?

  Sir Andrew Turnbull: There are some things which we think we definitely want and there are a couple of items where he is saying "you think this needs to stay where it is", eg the pensions operation in Basingstoke and CMPS in Sunningdale and he is saying "prove it". There will be some, but not necessarily the maximum of the menu he has come up with.

  Q86 Chairman: Is the whole programme to be driven out of the Cabinet Office or out of the Treasury?

  Sir Andrew Turnbull: It is going to be done as a joint project. We have to deliver the set of proposals that we are going to act upon. On 26 April departments will deliver to the Treasury their proposals for the Spending Round, including their proposals on efficiency. There will then be in a matter of a number of weeks an argument about those and then we will settle on what it is that is going to be done. That gets written in to the settlement letters and the survey. We then have to devise—and we have not finished the work on how we will do it—how we operate the Efficiency Review in its implementation phase. Some of that will be cared for by OGC, some of it will be led by Cabinet Office units and then we need a piece of apparatus to look at the whole thing. Again it will be a joint enterprise in the same way as it has been up to now.

  Q87 Chairman: Implementation is harder than writing reports, is it not?

  Sir Andrew Turnbull: It is.

  Q88 Kevin Brennan: Sir David, I notice you have not said anything yet.

  Sir David Omand: You have not asked me anything.

  Q89 Kevin Brennan: On this little sheet we were sent it has the Minister and his picture, Sir Andrew Turnbull and his picture, Colin Balmer and his picture and it has your name but your picture is not on it, I wondered whether you were meant to be keeping a low profile or was that just a coincidence?

  Sir David Omand: The absence of a picture does not hurt me, my photograph is known from my previous jobs in the Home Office and in the Ministry of Defence.

  Q90 Kevin Brennan: I was pulling your leg. What is your role in the Cabinet Office, is it about promoting standards and all that?

  Sir David Omand: No, if we take the mission areas that Andrew referred to and if we look at the first, "supporting the Prime Minister in leading the Government" I have a clear role in helping with the formulation of strategy, for example our national counter-terrorism strategy, on which I spend a lot of time at the moment. The second mission area is, "the coordination of policy and operations across government". There, clearly, we have the delivery of timely and accurate intelligence. We have to maintain a capability to handle terrorist incidents and other emergencies. These are central coordinating functions for which I am responsible.

  Q91 Kevin Brennan: On the sheet here under coordination and promoting standards your name is the first on the list, do you have a role in promoting standards, including things like "making sure that ministers, special advisers and civil servants are aware of and abide by established standards of propriety and ethics", or is that nothing to do with your role?

  Sir David Omand: That is not part of my role.

  Sir Andrew Turnbull: That is the responsibility of Sue Gray, Head of Propriety and Ethics. That is a group which reports directly to me.

  Q92 Kevin Brennan: Why are there three columns on the one with the photographs on it and four columns on the larger departmental plan diagram we have had? "Supporting the Prime Minister" is missing from the other diagram you supplied to us.

  Mr Balmer: It is purely a matter or timing. We produced the wall-chart last autumn because of some pressures from staff to understand how the new individuals, particularly how I, fitted in, so we produced that wall-chart, and because it is designed to go on people's desks and on walls we squeezed it into three columns and that is why we pulled together coordination and standards into one heading. We have been working since then on producing a departmental plan where we have been elaborating much more clearly what the objectives are. If you are looking to understand how the Cabinet Office works the plan is the thing to look at rather than the wall-chart.

  Q93 Kevin Brennan: Which one is the plan and which one is the wall-chart?

  Mr Balmer: The bigger one is the plan and the small one is the wall-chart.

  Q94 Kevin Brennan: The Chairman asked this question earlier on, is it really appropriate to call this organisation at the centre of government the Cabinet Office any more, should we not if we are trying to establish some sort of clarity be saying what it is on the tin these days in government? What does that mean to people, the Cabinet Office?

  Sir Andrew Turnbull: You are right but I do not know whether HM Treasury is any more accurate as a description of the modern functions of the Treasury.

  Q95 Kevin Brennan: We could call it the Department of Finance but I think people do know that the Treasury deals with money, do they not?

  Sir Andrew Turnbull: You could easily produce a new name but we have not found that necessary. We can explain what we do. It has a long history, and you do not discard history lightly. You do it when you think it is necessary and beneficial.

  Q96 Kevin Brennan: It really dates back to the end of the First World War and things have changed.

  Sir Andrew Turnbull: It is a historic name rather than "it does what it says on the tin" name.

  Q97 Kevin Brennan: I think somebody asked this question earlier on, I was keen to explore it a little more, how do you measure—because we have had a lot of restructures and we see these diagrams every year, different diagrams about the centre and the new centre and last year's centre and this year's centre, there is a lot of change going on at the centre of government—if this change and these restructurings are effective?

  Sir Andrew Turnbull: I have to go back to the earlier answer to Kelvin Hopkins, ultimately it is whether PSA objectives for the improvement of public services are being measured and whether the standards of security in the country are being sustained. You have to look at the outcomes. Part of our problem is that you can measure what we do in a very near sense, but that is rather trivial, or you can measure it in a rather fundamental sense.

  Q98 Kevin Brennan: That is the problem. Just to pursue that, the other thing that you said was that the ultimate aim of the Cabinet Office and indeed the Government as a whole is to produce a society that people are happier living in. That is what you said. It was broadly philosophical. The fact is that people are no happier than they were 30 or 40 years ago if you ask them about it despite PSA targets and all of this other material we use to measure whether the goose is getting any fatter. People are not any happier. Should we not be looking more fundamentally at the heart of government and of ways of measuring whether Government is effective by actually asking them. Incidentally when you do ask them they are not convinced that the reforms which have been taking place in Government and that are going on are actually making their lives any better.

  Sir Andrew Turnbull: You get a very mixed picture. If you ask people about primary schools I think unambiguously you will get a view they are better than they were ten years ago. I think if you ask about the service you get from a GP's surgery you will probably get the same answer. On the other hand if you said, "Is the Health Service getting better?" by and large people tend to say no. The more generalised the question—

  Q99 Kevin Brennan: If you ask people, according to this report in the Independent on 24 March, about the quality of education over the next few years they expect it to: Get much better, 5%; get better, 33%; stay the same, 35%; get worse, 19%; get much worse, 4%. 23% think that it will get worse.

  Sir Andrew Turnbull: There is a clear balance of ups and downs in those figures. I remember seeing that and I was rather encouraged by it.

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