Examination of Witnesses (Questions 80-99)|
14 JULY 2004
Q80 Mr Beard: It is on that basis; it
is not individual assets which you can point to as being ready
to flog off.
Mr Macpherson: No, this is not
some sort of detailed bottom-up forecast; it is a long-term objective
which can then inform and guide us.
Mr Beard: Thank you very much.
Q81 Mr Fallon: This £30 billion
is not a new figure. You have been selling £5 billion to
£6 billion of assets a year at the moment and you are telling
us you are going to do £30 billion in five years time. There
is nothing new about that, is there?
Mr Macpherson: I think it is.
Q82 Mr Fallon: £5 billion times
6 years is £30 billion.
Mr Macpherson: I think asset sales
have been very strong over the last two years. In the years before
that, they were more in the £4 billion direction. I would
say it is a stretching target. It is not something which will
just happen. It is not going to be simple, but, equally, I think
with the right approach it is achievable.
Q83 Norman Lamb: You do not know what
you are going to sell but it is going to be simple to sell it.
Mr Macpherson: I highlighted the
worth of the asset base which is reflected in the Department's
accounts. There are approximately £650 billion of assets
out there, so there are quite a lot of assets you could sell.
Q84 Mr Fallon: If I could bring Mr Stephens
in here. In paragraph 1.15 of your document you quote the savings
figure of £20 billion a year by end of plan, 2008. What proportion
of that £20 billion is taken by the reduction of 84,000 headcount?
Mr Stephens: That would account
for between 10 and 15%.
Q85 Mr Fallon: We were told in earlier
evidence that it was probably around 20 to 25%, but yours is the
authoritative figure, is it?
Mr Stephens: That is what we reckon
it will be.
Q86 Mr Fallon: So 10 to 15% of the £20
billion is the headcount saving. The headcount total includes
another 20,000 to be achieved by the devolved administrations.
Has that been agreed with the devolved administrations?
Mr Stephens: As the Chancellor
set out in his statement on Monday, that indicates the sort of
opportunity that is there for the local government and the devolved
administrations if they apply the sort of efficiency measures
that have been planned for central government in England and the
Q87 Mr Fallon: It is a wish list, is
Mr Stephens: Local government
and the devolved administrations are all embarked on their own
efficiency programmes. The detailed measures for those programmes
are of course for them to adopt. This indicates the sort of opportunity
that is there if they adopt the sort of measures that the government
is planning for central government.
Q88 Mr Fallon: They have not agreed these
targets, so neither the devolved administrations nor local government
have accepted the 20,000 figure.
Mr Stephens: I can just repeat
what the Chancellor
Q89 Mr Fallon: Could you answer the question:
Have they accepted this figure or not?
Mr Stephens: As the Chancellor
set out in his statement on Monday, they are all embarked on efficiency
programmes. They are committed to the equivalent of 2.5% efficiency
savings a year. This indicates the sort of opportunity that is
available to them if they follow the mix of efficiency measures
that departments are planning for their responsibilities in England
and across the UK.
Norman Lamb: So the answer is: No.
Q90 Mr Fallon: The answer is: No, they
have not accepted this figure.
Mr Stephens: I can set out the
Q91 Mr Fallon: Do not repeat it for a
third time. I would rather you answered the question. Can you
help us with paragraph 2.19, the second to last line, where you
refer to the 20,000 posts as "civil service posts".
Does that include local government posts?
Mr Stephens: Yes, that does include
Q92 Mr Fallon: So these are people that
you cannot require either the devolved administrations or the
local authorities to reduce. That is the position, is it not?
Mr Stephens: Local government
has agreed, as is set out in the table of efficiency targets,
a target of efficiency savings by 2007-08 of, from memory, £6.45
billion, and that is the target the local government has agreed
and accepted. It would be for local government to decide how those
efficiencies are achievedwhat mix between reductions in
back office, which is likely to involve reductions in the workforce,
and what mix in efficiencies in procurement, etcetera. Those decisions
are ultimately for local government and devolved administrations
to take and set out, but we are indicating the opportunity that
is there if they follow the sort of mix of measures adopted by
Q93 Mr Fallon: I understand that. It
seems for English local government you have some kind of commitment.
What proportion of the 20,000 is English local government compared
to Scottish and Welsh?
Mr Stephens: I think the proportion
is roughly a quarter for local government and three-quarters for
Q94 Mr Fallon: So you have some commitment
on a quarter, but 15,000 jobs you are hoping Scotland and Wales
Mr Stephens: All the devolved
administrationsand of course in the case of Northern Ireland
they are not currently devolvedhave efficiency programmes
in train. It is for those administrations to set out the details
of those efficiency programmes.
Q95 Mr Fallon: Could I ask you about
the efficiency programmes themselves. Is that a question for you
or Mr Martin?
Mr Stephens: I am happy to answer.
Q96 Mr Fallon: The Department of Education
has a target of making school teachers and university lecturers
work 30% harder. How do you measure that?
Mr Stephens: In terms of releasing
the amount of time that can be spent on delivering front-line
service (that is, time spent in the classroom directly on educating
pupils), that can be measured by surveys and the full details
could be set out in the technical notes to be published at the
end of October. But that is part of a pattern across education
that is reflected in a reduction in headquarters, in the levels
of inspection and in the levels of communication between headquarters
and schools, which in turn releases resources in the schools and
colleges, etcetera, to spend on direct teaching to pupils.
Q97 Mr Fallon: How have you got the department
to agree to a 30% target before you have been able to publish
the technical note or agree that with them so that the rest of
us can measure it?
Mr Stephens: The technical note,
when it has been published, will be the subject of scrutiny with
the NAO or the Audit Commission as appropriate. The figures set
out in the White Paper indicate the agreement that the department
has reached: that it believes, on the basis of the detailed work
and evidence gathering done by Sir Peter Gershon, working with
the department is an achievable and realisable target.
Q98 Mr Fallon: Why have the technical
notes not been published with the spending review? You have been
at this for two years.
Mr Stephens: Sir Peter Gershon
started his work last autumn. It is important that the efficiency
technical notes are seen to be objective and measurable. They
will be put through a process of scrutiny by the appropriate audit
body and before being published in October. This is the sort of
process that we have followed with PSA targets.
Q99 Chairman: You mentioned extra productivity.
Do you envisage more class contact time by teachers?
Mr Stephens: Yes.
Mr Fallon: 30% more.
1 Note from witness: The correct proportion
is actually a quarter for the devolved countries and three quarters
for local government. The Chancellor corrected this point during
his select committee appearance on Thursday 15 July. Back