CORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 307-i

House of COMMONS

MINUTES OF EVIDENCE

 

TAKEN BEFORE

Public Administration SELECT COMMITTEE

 

 

Civil service effectiveness

 

 

Thursday 3 February 2005

SIR PETER GERSHON, CBE

Evidence heard in Public Questions 1 - 87

 

 

USE OF THE TRANSCRIPT

 

1. This is a corrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee, and copies have been made available by the Vote Office for the use of Members and others.

 

2. The transcript is an approved formal record of these proceedings. It will be printed in due course.

 

Oral Evidence

Taken before the Public Administration Select Committee

on Thursday 3 February 2005

Members present

Tony Wright, in the Chair

Mrs Anne Campbell

Mr Kelvin Hopkins

Mr Ian Liddell-Grainger

Mr Gordon Prentice

Iain Wright

________________

Examination of witness

Witness: Sir Peter Gershon, CBE, examined.

Q1 Chairman: Good morning. Could I call our Committee to order and welcome this morning's witness, Sir Peter Gershon. It is very good to have you along to help us with our inquiries into the effectiveness of the civil service. We are also interested in the report that you have done on public sector efficiency. Would you like to say anything by way of introduction or shall we go straight into questions.

Sir Peter Gershon: I suggest we go straight into it.

Q2 Chairman: Having had experience of the public sector and the private sector and having done this major review, tell us how inefficient the public sector is.

Sir Peter Gershon: I guess I do not start from that framework; I start from a framework that every organisation in the public or the private sector is capable of being more efficient tomorrow than it is today if you apply management effort to it. Even if you take private sector organisations which people would regard as being at a peak of efficiency they do not rest on their laurels; they try to find ways of being even more efficient tomorrow than they are today. What I did was to identify across the public sector the scope for some efficiency savings that are deliverable by March 2008. I also indicate in my report that I believe that if the public sector can build momentum up on this efficiency programme there will be scope to seek further efficiency improvements in the period after March 2008. What you can say is that on the delivery of this programme there will be an excess of £20 billion of efficiency savings delivered in 07/08. There will be savings in 05/06 and 06/07 so that cumulatively over that three year period of SR04 there will be in excess of about £40 billion of efficiency savings. What I would like to see is that this momentum is sustained. The problem I saw about this was about trying to kick start a renewed focus on efficiency in the public sector against a background that there has been much more focus since 1997 on effectiveness and this is about trying to get a better balance between efficiency and effectiveness in a period where potentially the Government now has to find more money from efficiency savings than it does through being able to raise taxation or increase public borrowings.

Q3 Chairman: I understand all that and we shall come back to aspects of it. I simply want to get a judgment from you. You have a huge background in the private sector and have done massive work in the public sector, I just want you to give the Committee a sense of how inefficient you think the public sector is. Very inefficient? Not very inefficient? What would you say?

Sir Peter Gershon: Clearly I believe there is scope for it to be more efficient. That is what this report sets out.

Q4 Chairman: Because it is very inefficient?

Sir Peter Gershon: No.

Q5 Chairman: Because it is slightly inefficient?

Sir Peter Gershon: Because there is scope to improve its efficiency.

Q6 Chairman: We just want to know the scale of the task.

Sir Peter Gershon: All I can say is that the scale of the task I identified between now and March 2008 is a task that leads to the delivery of the savings that I identified.

Q7 Chairman: If it is a hugely inefficient organisation then it would be easier presumably to achieve efficiency savings against that huge inefficiency; but if it were only a moderately inefficient organisation then it would be harder to achieve such savings.

Sir Peter Gershon: I do not think that is a question I can answer, Chairman, because you also have to view this against the structure of the whole public sector, and the autonomy of many different parts of the public sector. This is not like a private sector organisation; this is not like a Tescos where there is a very direct line of command and control between the corporate centre and an individual supermarket. The lines of command and control in the public sector are much more subtle and sophisticated than they are in a private sector organisation. I cannot make that judgment; I can only tell you what I thought was the art of the possible within this timeframe.

Q8 Chairman: Let me try it in a slightly different way. Do you think the public sector - again based on your experience and knowledge and so on - is intrinsically less efficient than the private sector?

Sir Peter Gershon: The private sector does not have the complexity of the challenge that the public sector has. I do not view efficiency in isolation from everything else. Running the public sector is a much harder and a much more complex task than running a private sector organisation. Having spent a limited period of time in the public sector I would characterise managing the public sector like trying to manage in a four dimensional world. Managing in the private sector is about managing in a three dimensional world. It is an inherently more complex environment.

Q9 Chairman: Is that a yes or a no then?

Sir Peter Gershon: I cannot answer your question.

Q10 Chairman: You just find it impossible to compare the efficiency of the private sector and the public sector.

Sir Peter Gershon: There are some areas where it is valid to do benchmarking between the public and the private sector and we did that during the course of the review. For example, I think it is perfectly valid to compare the number of HR professionals in a public sector organisation that are needed to support every hundred employers and to benchmark that against the private sector. We did that and we discovered that the wider public sector is pretty close to the median for the UK private sector; central government was significantly adrift and was operating with a much lower ratio: 1:30 to 1:40 whereas the median in the wider public sector and the private sector would be about 1:100. Yes, that did focus attention in the review as to why can central government not achieve the sorts of ratios that the wider public sector and the private sector are able to achieve. By focusing attention on that we were able to make some progress during the course of the review. So yes, I think there are areas where it is valid to do that but I am unable to answer the general question that you have asked me.

Q11 Chairman: In your report you say that you want to promote a culture of efficiency in the public sector. Is that because a culture of efficiency does not exist in the public sector now?

Sir Peter Gershon: In a period where you have tight public sector expenditure constraints there is always going to be more attention paid to efficiency because there is pressure on people to try to find ways of doing things more efficiently. There has been a period where there have been big increases in resources that departments have had, a focus on trying to improve effectiveness and the quality of public services. That is always going to create an environment in which people pay less attention to efficiency than they do when the going gets tougher. That happens in the private sector as well; it is not a unique phenomenon in the public sector. We are now entering a period where efficiency becomes more important to help generate resources which the Government wants to reallocate into investment in front line services and that focuses more attention. Given that there is no proxy for profit in the public sector I would like to see a situation where efficiency has a higher priority on the management agenda in the public sector in order that you can sustain this programme beyond the next three years. This means trying to get a more equal balance between the efficiency agenda and the effectiveness agenda whereas we have come from a period where effectiveness has been much higher priority than efficiency has been, in my view, in some parts of the public sector

Q12 Chairman: Knowing all that and given the fact that you have come up with this programme of a £20 billion-plus saving to 2007/08 - 84000 jobs - and if we are talking about promoting this culture of efficiency is your sense that this is something that the public sector needs to experience periodically, a kind of periodic shock therapy? We have had such episodes in the past which have tended not to produce the scale of gains that were anticipated at the time and they clearly have not, to use your word, "embedded" a culture of efficiency otherwise we would not be talking about the need to embed it now. What I am really asking you is, are these exercises something you think the public sector has to experience from time to time as a kind of shake out exercise? Or, is the objective now to embed an efficiency culture in such a way that such exercises will not be needed in the future?

Sir Peter Gershon: Certainly as I have said it was my objective to do that. You will have to ask the Government whether it is their long term objective; I cannot answer for them.

Q13 Chairman: Do you think that is a do-able objective?

Sir Peter Gershon: That is why in my report I gave quite a lot of attention to the whole issue of deliverability of the recommendations and to look at what mechanisms and actions need to be taken to help create this culture. One example would be the recommendation that I made about finance directors: professionalizing the finance director function in central government, and getting heavyweight professional finance directors who sit on departmental management boards and have the same status as their other colleagues because those animals in my experience act as a natural point for challenging internally an organisation about whether it is using its resources efficiently or not. If you can create a cadre across Whitehall of these sorts of people then I think you have gone a step towards creating this longer term culture which is as much focussed on efficiency as it is on effectiveness. Ultimately what this depends on - I made this clear in my covering letter to the Prime Minister and Chancellor - is that there needs to be sustained top level political and management commitment to efficiency. That is what you see in very well run private sector organisations; whatever else is going on, top management always spend time worrying about and driving for efficiency inside their organisation. As long as you keep getting those signals driven down from the top, that helps create the culture around the place that says that this issue is important and we have to focus on it.

Q14 Chairman: You say in terms of embedding this culture that it will be important to reward those who deliver - that is under the efficiency agenda - in just the same way as those who deliver improvement in effectiveness have been rewarded. How do you see that operating?

Sir Peter Gershon: Within the reward system of the civil service what I would say is that there is scope for senior civil servants, if they are high performers, to get bonuses on top of pay increases. The people who deliver very well against their efficiency objectives should be as much eligible for a good bonus as someone who delivers successfully on a PSA target by improving the quality of a public service.

Q15 Chairman: You want to build those into the reward criteria at each level.

Sir Peter Gershon: Yes.

Q16 Chairman: Some people might say that we live in a context where everyone is terrified of putting any taxes up and therefore we are in the era where we have to sweat the state. Is this not about sweating the state in a serious way?

Sir Peter Gershon: Any organisation is always capable of improving the efficiency of the way it uses its resources and if it is not subject to those pressures then it will always look for other ways to create additional resources, whether that be getting new income through raising prices, raising taxation or borrowing.

Q17 Chairman: There is a bidding war going on between everybody at the moment as to how much of the state they can dispense with. What judgment have you formed of the other bids that have been made?

Sir Peter Gershon: Which bids?

Q18 Chairman: Mr James and his £35 billion.

Sir Peter Gershon: The thing about the David James report is that it is totally silent on deliverability and therefore I cannot comment. He has claimed the bulk of the £20 billion I identified but, in my view, my £20 billion are only achievable if you accept my delivery recommendations. He has said nothing about how his recommendations would be delivered and therefore it is impossible to comment.

Q19 Chairman: He said that we are going to take bits of the state away; you are saying that the state is going to do what it is doing now but is going to do it more efficiently.

Sir Peter Gershon: A significant part of what David James identified is basically that he will take Gershon's £20 billion and then he has some other bits around taking away some parts of the state. To get to my £20 billion you have to say something about deliverability; he has not said anything so I cannot comment. Until I understand his delivery framework I do not know whether it is achievable or not. I did consider some of the things - not all of them, but some of them - that David James looked at. If you recollect one of the criteria I set myself was that nothing I recommended would be dependent on legislation. I believe some of the recommendations he has put forward require legislation to bring about, for example privatising the Met Office. To plan on something like that happening by March 2008 you have almost got to guarantee the priority that you are going to give to that legislation and you are making all sorts of assumptions about the time to get that legislation through Parliament. Whether that is achievable or not I do not know, but there are parts potentially which you could do, but I was very focussed on what can you plan on for by March 2008, not in some longer time frame.

Q20 Mrs Campbell: Can I ask you how real these savings are? If, for instance, we take the Department of Health which accounts for almost a third of the total savings, up to half of this £6.5 billion savings will come from better use of staff time resulting from IT investments. However, would these savings not have occurred anyway?

Sir Peter Gershon: I did take a view in the conduct of this review that said there were a number of departments where, during the course of the current spending review, there were a lot of investments being made in IT, in workforce reform initiatives and trying to promulgate the use of best practice. They were getting all this money in this spending review period and I wanted to start seeing in their submissions what are the benefits they were going to deliver as a result of this investment. Yes, you could say that some of it was planned but I have to say that my experience of working in the public sector is that attention to benefit realisation is not always the highest thing on the priority list.

Q21 Mrs Campbell: I have to say that if that is the case then things have changed considerably over the last 20 years. I remember when I had some contact with the civil service in the 1980s there was an edict almost that if you were spending money on IT then you had to be able to identify the benefits, usually in terms of savings.

Sir Peter Gershon: There is no difficulty about identifying benefits when you are doing the case to get the money. What I am interested in is, when you have spent the money, where are the benefits? Show them to me on the ground. That is what I am interested in. This is not just an issue about the public sector; I have seen it in the private sector as well. Writing acquisition cases to get money and showing the benefits that are going to arise is one thing, focussing effort and attention to make sure that the benefits you said you were going to get are actually going to be delivered and driven out, in my experience, is something that does not always get the attention that it should get. I wanted to focus more attention on this to understand what departments were planning for in their spending review submissions and the extent to which those plans could be compared to what was said in the investment cases: was there a difference? Was it in line with the investment case? If it was falling short why was that?

Q22 Mrs Campbell: Is that the methodology you used for identifying IT savings, you went back to see the cases that had been made for the IT investment?

Sir Peter Gershon: I looked at this combination of IT and workforce reform and where money had been spent, for example, on trying to identify and implement a process of promulgating best practice.

Q23 Mrs Campbell: Do most civil service departments not do what the Government is suggesting that they do, which is to make efficiency savings but the work is moved to the front line so in fact there are not going to be redundancies as a result of that.

Sir Peter Gershon: Let me give you an example which I do recollect. If you take the digital mobile radio system that is now being implemented across all the police forces you can look at this in two ways. It is a simple replacement for the old analogue radio systems that the police have used since time immemorial or you can say, "Yes, it is that, but it also has a lot more functionality. What are the plans to exploit that functionality which could enhance the efficiency and the productive time of policemen on the front line?" That is not just about the technology, it is about the plans to train people to use the additional functionality, whether processes need to be changed to exploit the functionality as well. It goes wider than the technology.

Q24 Mrs Campbell: I do understand that, but coming back to the IT savings for a moment - which is the area I am most interested in - we have seen a number of total disasters as far as IT projects are concerned. In fact, one sometimes wonders whether there are any successful IT projects within Government. I suppose the biggest failure has been the CSA project in recent years. How sure can you be that IT projects are going to be managed successfully so that savings can be made whether they a reduction in staff or different ways of using time.

Sir Peter Gershon: During my time in the OGC I had some interest in that particular agenda as well. There are a lot of IT success stories in government it is just that we live in a country where the press only writes about failure, it never writes about success. Success does not sell newspapers in this country. Look at the Customs and Excise import/export system, one of the most complex real time systems in the world; look at NHS Direct; look at the roll out of new technology in Jobcentre Plus. Yes there are failures and what we did in the OGC was to try to understand whether this country is unique in terms of having IT failures and what we discovered was that there has actually been quite extensive research done in the States looking at success rates of IT projects across different sectors in the US and the average success rate across all sectors in the States now is that 30 per cent of projects are successful if you measure them against the criteria of: did they come in on cost, did they come in on time and did they basically do what they were supposed to do? The US public sector was not significantly adrift from the rest of other US sectors. There was a study done here by Computer Weekly and Templeton College, Oxford for the first time trying to understand success rates in the UK. That pointed to a success rate across the UK, not just the public sector, which was less than the US. The OECD have published reports in this area and there is nothing in them that indicates that the UK public sector has a worse failure rate than other countries or other sectors. That is comforting in one sense and it is not comforting in another. Success rates have to be improved. Yes, the Child Support Agency has been a very unsuccessful project but there have been some very, very successful projects in the UK for which there is no publicity. At the moment there is no balance in this debate.

Q25 Mrs Campbell: Thirty per cent success is hardly a shining example. Surely most people would consider that to be pretty abysmal.

Sir Peter Gershon: Yes, it is. What we were trying to do in the OGC - and that work is continuing - is to get things done that can help improve the success rate. The highest risk thing that you can do is what is called a 'big bang' implementation. Every time the public sector tries to do a 'big bang' implementation you get very high profile failures, for example: Tax Credits, Criminal Records Bureau. Probably the one shining example of a 'big bang' implementation that went okay was congestion charging in London which was 'big bang'. Yes, there were some teething problems, but compared to other 'big bangs' in the public sector it was a massive success. These things are inherently high risk so part of this is about trying to get very, very far upstream to get the people who are responsible for delivery to be much more influential with the policy makers so that at the time key policy decisions are taken there is a much greater awareness about the likelihood as to whether that was leading potentially to a very high profile failure. If you take, for example, something that is referred to in the report which is basically migrating away from the DWP system of order books to paying as many people as possible through the banking system and through the Post Office Card Account through post offices, that was a massively complex IT project. It required work in Inland Revenue, DWP, the banks, the Post Office, but it was phased; it was not done as a big bang. That has gone very smoothly; you hear very little about it. In terms of complexity it was enormously complex. Has there been any credit for it in the press? No, not a dickey bird.

Q26 Mrs Campbell: It is comforting to know that there are some successes. Phasing does not necessarily lead to success.

Sir Peter Gershon: No, but it can help.

Q27 Mrs Campbell: Yes, I am sure that is the case. However, the CSA system was meant to be phased, was it not, in that new cases brought on stream were going to be processed first and then the historic cases brought in on a phase basis but we do not seem to have got to the starting point with the CSA computer system.

Sir Peter Gershon: I am not here to defend the CSA; it has been a very, very unsuccessful project. The issue as to the extent that that was a technology failure also related to the complexity of the policies that the technology was trying to support. One of the things we were trying to do through the OGC - and my successor is continuing to do so - is also about trying to get the private sector bidders to be much more realistic about what the technology can do. If the technology cannot do something then the contract should not be taken just to fight a losing battle all the way during implementation which involves significant reputational damage and potentially financial loss which does not help anyone.

Q28 Chairman: Just so that we are clear on one of Anne's questions, the question has arisen about where your benchmark is in the savings figure. What I want to know is are the existing efficiency savings built into the system, for example the fact that the Health Service has to save two per cent a year? Are these incorporated into your figures or are your figures beyond the existing efficiency saving?

Sir Peter Gershon: My starting point was the 04/05 base line. That does include clearly efficiency savings that were being planned for 04/05 and from that 04/05 base line the efficiency agenda overall looked for two and a half per cent per annum savings from the 04/05 base line. What emerged at the end is a combination of benefits that come through as a result of investments in things like technology or workforce reform which are already under way. Going through the process I have already indicated, what was being planned for was in line with the original case for spending the money and sometimes during the course of the review we found that what was being put into the submissions did not quite match the original case and that caused a number of challenges to departments as to why that was the case. However, it also includes a whole bunch of new things which have arisen as a result of the review.

Q29 Chairman: How much of your total figure is accounted for by efficiency savings already programmed for?

Sir Peter Gershon: I never did that analysis. I was concerned with the deliverability of the programme because historically it has been very difficult to assess in most cases. I was concerned with measurability and deliverability. Some of it was a result of things that were already intended as a result of money being spent and some of it was a result of things that arose directly as a result of actions that were triggered by the efficiency review.

Q30 Chairman: If you talk to health service providers on the ground as we do all the time, they have to deliver this two per cent addition to saving every year.

Sir Peter Gershon: Some of the things like the deal that the Department did with the pharmaceutical industry which by 07/08 will lead to a reduction of a billion pounds a year in the pharmaceutical bill for this country, that is a billion pounds that would not have been there if it were not for the result of the efficiency review. If you look at what has been announced about the rationalisation of NDPBs in health which is going to generate half a billion pounds a year by 07/08, that is not in your two per cent savings,

Q31 Chairman: I am not suggesting for a second that it is all contained in there. I am trying to get a sense of what is genuinely new here because otherwise you are going to be hit with the charge that this is smoke and mirror stuff. If a lot of this is already embedded in the system for planned efficiency savings and when you say as you did just now that you had not done the calculation to work out how much of this is genuinely extra stuff, people would be surprised by that, would they not?

Sir Peter Gershon: My aim was to stick to the remit I was given. My remit was very clear and I operated within that remit.

Q32 Mr Hopkins: I must say that I remain very sceptical about the whole exercise and I wonder if you could reassure me on a number of aspects of your report and what has followed. My impression was that you were invited to do a job by Downing Street and that it is to an extent public relations. The Government wanted to give the appearance at least of some very substantial savings by getting rid of bureaucrats, so they pick from the private sector a well known, good, swashbuckling entrepreneur, someone with a first in mathematics from Cambridge who could deal with big numbers - because they wanted big numbers - and someone who could do a report which would be unimpeachable and pass the Daily Mail test. Would that be unfair?

Sir Peter Gershon: At the time they asked me I was not in the private sector; I had just spent three and a quarter years in the public sector. I do not think I would describe myself as a swashbuckling entrepreneur. I am not a politician; my experience is in general management. I regarded this as a management exercise. I was therefore as concerned about identifying the potential for savings as I was concerned about deliverability. I was in this building with my colleagues on the Treasury Management Board in front of the Treasury Select Committee when the Treasury was asked about its own Service Delivery Agreement in SR 2002 to find efficiency savings and was unable to answer the question, which is a matter of record. What I learned was that just setting targets is no good; you have to have the follow through. You have to have a framework in place that makes those targets a reality and helps drive people to deliver. Then you also have to have in place a mechanism that is measuring what they deliver to see that those things are coming good and they are actually delivering what they said they were going to deliver. I do not know whether you would call that smoke and mirrors or not; it is not to me.

Q33 Mr Hopkins: That is one area of scepticism. The second is whether there is in fact enormous scope for cutting jobs in the broad public services public sector. I have seen the public sector suffer decades of squeeze from successive governments. I have seen eyes water because of financial pressures and pressures of work. Would it be unfair to say that the public sector has already been sweated quite badly and that in general terms Britain spends less on its public services - or has done until very recently - than other comparable countries on the continent of Europe? To give you an example, I know about sixth form colleges. I am the governor of a sixth form college and I have seen the college squeezed year after year with serious financial pressures and under-funding yet doing a fantastic job within their tight financial constraints. There is no scope for cutting spending in that area. There are, of course, other examples.

Sir Peter Gershon: If you just do a sort of blanket efficiency cut, people salami slice, they cut training and I do not think that is a very good way of doing it. That is why we developed this concept about work streams and to understand what was going on in work streams and how that might drive efficiency improvements. The head count reductions are a consequence of that work. If you take further education, if you got more aggregation of demand between colleges or whatever, could they get better deals on procurement because they would get economies of scale? My intention is about trying to find savings by looking sometimes at things in a more holistic way than they have been done before and using that to drive an efficiency programme. Do I think there are significant improvements for getting efficiency savings in public procurement? Absolutely, I do.

Q34 Mr Hopkins: That suggests more centralisation.

Sir Peter Gershon: No, this is neither about centralisation or de-centralisation.

Q35 Mr Hopkins: I am not against centralisation.

Sir Peter Gershon: For the record, I did not advocate further centralisation. I did advocate more co-ordination, more willingness of autonomous bodies to get together either through regional consortia or participating through framework agreements where there are potential benefits of economies of scale. I am not about compelling people to enter into these arrangements; I am about that if these arrangements are available and, for example, you can buy this bottle of water through a national arrangement at half the price you can if you buy it yourself, then what I would argue is that you should explain to the public, to your auditors, why did you go and do this yourself instead of taking advantage of a national framework agreement where you could have got it for half the price? People should explain why they did that.

Q36 Mr Hopkins: Could you not then have said to government that local financial management for schools is not a sensible idea and you would eventually take all their ordering back to local authorities

Sir Peter Gershon: People have to decide what they need. There are certain things, for example, that schools buy which are reasonably common. They buy electricity; they buy water; they buy Microsoft software for their PCs; they buy electronic whiteboards. As we have seen with outfits like Microsoft, unless the public sector uses its collective clout no individual small autonomous body can ever have leverage with the likes of Microsoft. If you do aggregate demand for electricity, you go into the market, you run an electronic auction and you have a big amount of potential demand, you will do better than if you are a single little body going out with a minuscule amount of demand. On the other hand, for things like local repairs, it is absolutely right that people should be able to make local decisions and use their money because those are potentially things where there is no benefit by working in an aggregated way. I did identify something where what I called a more strategic approach to the management of key supply markets would benefit the public sector. That does not mean that there are centralised buying arrangements but it does mean that the autonomous bodies who are doing the buying are more informed, have more knowledge and have at least as much knowledge as the suppliers do. I fundamentally believe that if you have an asymmetry of information between a buyer and a supplier and the supplier has more information than the buyer does, it is unlikely that the buyer is going to be able to get an optimum deal. That is not about centralisation; it is trying to get collective knowledge and in the light of that collective knowledge to be more informed and to do things that help get better value for money. It is not about someone in Whitehall saying, "We have done this deal and everyone has to buy pencils from this particular supplier".

Q37 Mr Hopkins: As a Member of Parliament I come across difficulties in my advice surgeries with immigration, with benefits, with tax credits and a whole range of public services where it is very clear that they are under very serious pressure. You may say these are front line staff rather than back office staff - I do not think the distinction is as clear as you would make it - but nevertheless there is a problem there. My impression is that they are understaffed not overstaffed. Taking IND with which I deal on a regular basis, the delays in dealing with immigration cases are dreadful. It has got slightly better but it is clear to me that they are understaffed and not overstaffed. Is that not the case?

Sir Peter Gershon: My task was to identify areas where resources could be freed up and be re-allocated to the front line. It is a political decision where you then allocate those resources that have potentially become available. I cannot comment on your question, Mr Hopkins, because whether you put more resources into one part of the public sector front line as opposed to another is a political decision and was not within the remit of my review. My remit was to identify what could be re-allocated; it is for the politicians to make that re-allocation decision.

Q38 Mr Hopkins: I would say that suggesting that there is scope for massive job cuts in the public sector is pretty political and certainly the Chancellor has used that in his pre-budget statement. However, setting that aside, are there not other areas where you could make sensible proposals which would actually save substantial sums of money for the Government but would be seen to be very political, for example re-nationalising the railways? I do not want you to respond to that immediately but the fact is that the subsidies to the railways have tripled since privatisation and under the cash limit basis of operations in BR's day it was much more efficient.

Sir Peter Gershon: Even if that had been in my remit hypothetically it would not have passed the test because it would have required legislation to get it through.

Mr Hopkins: Fair point. I could pursue this but I have probably had more than my fair share of time.

Q39 Mr Liddell-Grainger: Following on from that, you say it is a decision for politicians as to whether or not redundancies should happen.

Sir Peter Gershon: No. I said that my task was to identify where it was possible to free up resources. It was for the politicians to determine how you then redistribute the cake.

Q40 Mr Liddell-Grainger: Is that not exactly the same thing? Let us just take one example. The Department of Education and Skills is suggesting that there should be a reduction between 1900 and 1400 civil servants. You are saying that they should be made redundant, are you not? You are saying they should be got rid of.

Sir Peter Gershon: If it is not possible to re-deploy them across the public sector, then yes unfortunately it becomes necessary to have redundancy programmes to deal with the consequences.

Q41 Mr Liddell-Grainger: Then you said that you could only relocate about 800 possibly elsewhere in London and the south-east so presumably the other 600 are on the scrap heap of life. They are the redundancies; that is your gap between the two. Is that what you are saying? You are saying, "Get rid of them".

Sir Peter Gershon: Clearly, a number of departments now as a result of the review have implemented programmes to reduce their civil service workforce, ideally through voluntary severance but that is not always possible. Certainly some have recognised that it may unfortunately be necessary in the end to have compulsory redundancy programmes.

Q42 Mr Liddell-Grainger: Do you approve of compulsory redundancy programmes? Do you think they are a necessary part of what you are trying to do to review government and make it more efficient?

Sir Peter Gershon: I think the first thing to do is to find ways in which it is possible to re-deploy potentially redundant people. You should also have voluntary redundancy programmes so that those who could go have the choice of going, but in the final analysis then yes, I do believe it is necessary to have compulsory redundancies. For example, if you shut a particular facility in a given location - you shut a call centre, for example - then you cannot re-deploy everyone and you have to make people compulsorily redundant. I think this is a difference in approach to the alternative approach which has been proposed which says that even bigger job reductions can be achieved without any compulsory redundancies. I find that a very interesting approach.

Q43 Mr Liddell-Grainger: Is that not the crux of the whole matter? You came from private industry where downsizing is not necessarily normal but it is an understood and acceptable part of business.

Sir Peter Gershon: Wherever possible you try to do it in as a humane way as possible by seeking re-deployment, re-skilling opportunities, voluntary redundancy and using compulsory redundancy only in the final resort.

Q44 Mr Liddell-Grainger: At 1.7 you say, "What is efficiency?" The reduction of "numbers of inputs, (eg people or assets), whilst maintaining the same level of service provision". You are saying compulsory redundancy are you not?

Sir Peter Gershon: Potentially surplus people, yes.

Q45 Mr Liddell-Grainger: The reason I am interested is because there is the suggestion that a lot of people should be moved out of central London and transferred elsewhere in the United Kingdom. Surely looking at the long term efficiency of the civil service it can only be maintained by streamlining the system and to do that you have to be able to say to the unions and everyone, "I am terribly sorry, we are going to make possibly many thousands of your members redundant". That is just part of the system, is it not?

Sir Peter Gershon: At this scale of reduction regrettably yes.

Q46 Mr Liddell-Grainger: The Chief Constable of Avon and Somerset recently came to see Somerset MPs of all parties and he told us he was ten and a half million pounds short to do his job. The efficiency savings in government demand that he has to save ten and a half million pounds. He is losing 150 officers this year through natural wastage et cetera, but he cannot do his job. He came up here to ask us to go to the then Home Secretary, David Blunkett, to try to put his case across. Is it not the case that the Government have decided that it is easier to put the onus on local government, to make them raise local taxes, to create the shortfall than do it from the centre. To get round your report they are putting the onus of local government to do the dirty work as opposed to central government.

Sir Peter Gershon: I cannot see the evidence of that. Some of the pain that central government is taking is every bit as severe as what is happening in parts of the wider public sector.

Q47 Mr Liddell-Grainger: Avon and Somerset County have had to put up local taxation by about 70 per cent over the last five or six years to try to make up the shortfall from what they are not getting from central government, which has meant they have had to streamline a lot of provision which you would approve of I suspect. However, it has meant that thing like policing et cetera have found it harder and harder to maintain the level of input simply because of this, because the onus has been put on local government as opposed to national. Do you think that is the right way to go?

Sir Peter Gershon: How the Government distributes resources between central government and the wider sector is a political decision.

Q48 Mr Liddell-Grainger: Do you approve of the basis of that? Do you think you can put more emphasis on local government and you can push it down to them and tell them to raise local taxation to try to make it more streamline and more effective?

Sir Peter Gershon: I am not going to get into the merits of central and local government.

Q49 Mr Liddell-Grainger: Is it more efficient to do it that way?

Sir Peter Gershon: To change the basis of the boundary between central and local government is clearly a matter which is being subject to on-going political consideration for a long period of time. I did not regard making recommendations which were dependent on the resolution of that as helping my remit that I had to find things that were deliverable by March 2008.

Q50 Mr Liddell-Grainger: Basically what you are saying is that you do not really mind how it is done provided it is done by 2008.

Sir Peter Gershon: I went to great lengths in the time available to have as broad a dialogue as possible. This was not just an interaction between the review team and central government. The report sets out very clearly how we actively sought to involve police forces, local government, NHS chief executives and people like that as a way in which they could both help in the formulation of some of these recommendations and test out their viability and potential acceptability. We also sought in the review to put pressure on the system to begin a process of change on this whole area of what I called delivery chains and trying to reduce some of the burden that front line organisations experience by having to deal with multiple parts of the system above them to get funding or the burden of regulation and inspection and things like that, which, if it could be reduced, would free up resources in those front line delivery bodies, whether they be police forces, hospitals or schools.

Q51 Mr Liddell-Grainger: You lay down very clearly in Annex A of the consultation document, but again in that what you are saying is reduce a burden faced by front line professionals to free them up to meet the criteria. Again you are talking about local to national government. Are you not saying that it is freeing up the ability of the national Government and putting the onus on others to try to do the job?

Sir Peter Gershon: No, I am trying to reduce the burden of the bureaucracy in its collective sense on the front line delivery units.

Q52 Mr Liddell-Grainger: In this you go through various things - transactional services, et cetera - and what you are saying is that in the area of ICT and all others you can make efficiencies by using technology. On the likes of the policing et cetera you talked about TETRA Airwave. Is it called TETRA?

Sir Peter Gershon: That is the technology. Airwave is the system.

Q53 Mr Liddell-Grainger: That is a local government function where it was a national system put in for chief constables throughout the United Kingdom. The Chief Constable in my area has a problem with it because across a lot of the area it does not work simply because it is Exmoor and places like that. He went back to national government and asked for more to do more. In other words, he needed extra masts. They are still waiting. That was local government trying to get national government to move but it did not work. Surely with that sort of thing there is not the interface between national and local government anyway to try to improve that sort of system. Could that be made more efficient because it should be run from a local level or a national level?

Sir Peter Gershon: If you have different systems running on different standards you have interoperability problems. Is it important in the 21^st century that you have a system which is basically a common system across all police forces so you do not have some of the interoperability difficulties that have existed in the past? That was clearly a political decision and it was supported by a degree of national funding.

Q54 Mr Liddell-Grainger: Do you feel that the head of the home civil service should now come from private industry to make a lot of this happen? We did ask Sir Andrew Turnbull, but I am not going to tell you what his answer was. What do you think? Because it is central and so complicated and is becoming a very big machine indeed with technology, could it be run by someone from the outside?

Sir Peter Gershon: I personally do not think so.

Q55 Mr Liddell-Grainger: What about permanent secretaries?

Sir Peter Gershon: I have doubts about that as well. Clearly I was a second permanent secretary and I think there is a difference bringing people in from a very senior level from the private sector to do that. From what I saw about parts of the role of the departmental permanent secretary and the head of the home civil service is that there is an aspect about the interface with the politicians which I think would make it very difficult for somebody from the private sector who is used to a much simpler command and control environment, and the nature of the relationship between the head of the home civil service and the Prime Minister is not the relationship of a chief executive to his non-executive chairman. My observation is that it is a very different, more subtle, more complex relationship.

Q56 Mr Liddell-Grainger: I do not think Alistair Campbell would agree with that.

Sir Peter Gershon: He is entitled to his views and I am entitled to mine.

Q57 Mr Liddell-Grainger: If you have a permanent secretary do you think there should be- I hesitate to say sidekick - somebody who is there to say, "Hang on, that action can make a difference in that area", a sort of procurement officer or efficiency officer.

Sir Peter Gershon: As I have said, I think there is scope still to bring in people at the very senior levels but not at the level that you have suggested. I want to emphasise that that is a personal opinion.

Chairman: It is, however, one that we have been interested to hear.

Q58 Iain Wright: I want to follow on something that Ian was mentioning which is about the compulsory redundancies. Do you not think that there is a huge risk that your review might compromise the deliverability of public services on the ground precisely because of the huge scale of these redundancies? In my experience of both the public and private sectors when there is a re-structure going on, when there is rationalisation or whatever people take their eye off the ball, just naval gaze and just comment around the water cooler about whether or not they are going to keep their job or what changes there are going to be. It is very important that public services are delivered at the highest quality they possibly can, but that is going to be compromised.

Sir Peter Gershon: It was with regard to that point you raise that I did include the reference in my report that to go further or faster than what I recommended would put public service delivery at risk. Many of the surplus jobs that arise as a result of this are not in the front line; they are jobs which support front line delivery. Yes, there is a risk that if these things are not well managed, what you have identified could come to pass. It cannot be denied that there is always that risk and it depends on how well that situation is managed but it also depends to some extent the speed with which job reduction actions are implemented. I know some departments have made the decision basically to try to do this as fast as possible because experience has said that it is better to do this as quickly as you can than to drag it out. Clearly in some cases it is not possible to do that because a whole raft of underpinning actions have to be implemented first. I am not going to sit here and deny that the risk is there and it has to be managed.

Q59 Iain Wright: Can I just take up your point about the speed of this. Shock treatment has been mentioned; big bang implementation has been mentioned. Do you think your review is a big bang?

Sir Peter Gershon: No.

Q60 Iain Wright: Even though you mention in your letter to the Prime Minister and the Chancellor: "I am conscious that this will result in a significant loss of employment opportunities over a relatively short period", do you think you are lancing the boil quickly and it is a very big boil?

Sir Peter Gershon: In some quarters what has emerged from the efficiency review has been a shock to the system. I do not think it is a big bang. To get to March 2008 is going to be a three year marathon. They are not going to be able to deliver this in year one or in the first six months of year one. In no department can they get to their efficiency target by just taking one single management action. It is a combination of job reductions, better procurement, redefining the roles sometimes of some of the regulatory and inspection bodies so they take a more strategic approach and so there is less intervention but a better quality intervention with the public sector bodies there. That is why it is not big bang but it is a programme which has to be managed as a programme and requires day by day attention to get to the end.

Q61 Iain Wright: You have mentioned a number of times that you had very strict and very clearly defined parameters in terms of reference but you have also mentioned today about taking a holistic view. I have watched with interest and I think this Select Committee has mentioned about choice. How have you considered the choice agenda the Government is currently pushing with regard to your review? Do you think it has any sort of impact at all?

Sir Peter Gershon: I think indirectly yes. Let me give you a couple of examples. Under the work we did on transactional services we need to pay more attention to the role that intermediaries can play in helping people gain access to e-enabled services, to help drive the take-up of them and should not be viewed only as a direct interaction between the users of those services and the original provider of the service. There needs to be continued work to be able to increase the ability of the voluntary and community sector to play an increased role in the delivery of public services. I think those do in some way impinge and relate to the choice agenda. It is indirect; the choice agenda was not my primary driver.

Q62 Iain Wright: I am just thinking about the relationship between choice and capacity and the relationship between capacity and inefficiency. If you accept and embrace the choice agenda you will also automatically say that there may be some duplication of things, whether it be systems, whether it be personnel on the ground because you are giving people the choice. To pay your council tax through the internet or you may go to that particular office or you may go to another particular office. That capacity is necessary and therefore do you need to factor in some degree of inefficiency?

Sir Peter Gershon: Choice of service provider I think is where the choice agenda is primarily focussed. If you owe money to the state, my view is that public sector bodies who are in the business of receiving that money need to have as good an understanding as possible of the cost of the different ways of that money being paid and received and then to take measures to promote the use of the lowest cost channels. Not necessarily mandate them, but promote them. As an example, unfortunately in January I discovered I owed the Inland Revenue some money under self-assessment. If you look at the form you get it does not actively encourage you to use particular channels; it is completely neutral about which channel of payment you use: cheque, ring up a contact centre, use the banking system, whatever. The costs of those channels are not identical. There are armies of people in the Inland Revenue Department who do nothing but receive envelopes, open envelopes, take the cheques out and bank them. It is not the most efficient way of dealing with it. There ought to be a way of encouraging people to use the lowest cost channel. That is an area where I would reduce choice personally. That would make the new Revenue Department more efficient.

Iain Wright: I have had a similar experience to you but my interpretation is different to yours. I was steered, I thought - and quite rightly and more conveniently to me - to pay through my debit card on the internet. I presume the transaction costs for that are much cheaper than paying by cheque. My experience of self-assessment this year was that I was channelled that way and I thought it was more convenient to me.

Q63 Chairman: I think you are onto big stuff here Iain, if I may say so. We are doing the inquiry on choice and the one common bit of the evidence that we have received is that whatever else we say about choice it involves slack capacity otherwise people cannot exercise it. You come in as an efficiency man and think this is horrendous; you want to restrict choice.

Sir Peter Gershon: Can I be quite clear, what I was talking about was choice in service provision. I do not regard choice in payment mechanisms necessarily as part of the choice agenda. That is not the same as: do I have the choice about going to my local hospital where I may have to wait six months for an operation or can I go somewhere else to another NHS hospital and be dealt with in a month, which seems to me that that is an inherent part of the choice agenda.

Q64 Chairman: My choice is to send my cheque to the Inland Revenue, which is what I do. You want to deprive me of that choice because you say it is inefficient from the provider's point of view.

Sir Peter Gershon: Yes, I want to deprive you of that choice.

Q65 Chairman: There we are at odds therefore we have a big ideological difference here; this is the difference at the heart of government between choice that involves slack capacity to empower consumers and an efficiency drive that is going to take choice away from them.

Sir Peter Gershon: Why should you have a greater degree of choice in settling with the Revenue than you do if you book a flight with EasyJet where you only have one mechanism of booking a flight?

Q66 Chairman: EasyJet does not say: "Our philosophy is one of choice"; it says, "Our philosophy is one of selling you cheap flights and you do it on our terms". The Government says, "We believe in choice"; now you are saying you do not.

Sir Peter Gershon: I would restrict choice in payment mechanisms, yes. In that area I would restrict choice.

Q67 Iain Wright: But also in service delivery as well.

Sir Peter Gershon: If you look at all this investment that is going on in e-government there is no point in doing it if all you do is create a new channel and you still have to leave all the costs of the old channels in place. All you have done is create a new channel. If you take, for example, the issue about electronic filing of employer PAYE returns, the Government has clearly set out a course now which, by 2010, every PAYE employer will have to file electronically. That will be the only way of doing it; all other mechanisms will be removed but it is done on a phased basis and for small and medium sized enterprises it is providing in the mid-term period some financial support to help them bridge from a manual world to a more electronic world whereas a big firm today has already got the infrastructure in place and everything that enables it to file electronically. Yes, that is a restriction in choice; it improves efficiency. At the end of the day it is the elected politicians who have to make the decision about how far do you let one agenda run where it may start to impact on another agenda. It is a question of balance and that is the decision they have to make, not unelected people like me who merely have to come along and make recommendations within a particular remit we have been given.

Chairman: I do not see reducing choice as a great slogan for us as we go to meet the electorate, but it is an interesting proposition.

Q68 Iain Wright: I can appreciate what you are saying about back office functions and the restriction of choice. I might not agree with it, but I can see where you are coming from. Is it not also the case that it is front line service provision as well? To take the analogy that I want an operation and I am being given the choice that I can go to Kelvin in three weeks or I can go to Tony in two weeks, surely there will be some slack - some capacity, some inefficiency, call it what you like - because Kelvin needs to gear up because he might take me in three weeks but might not. He is sat waiting and he is sat waiting to give my operation. Is that not the nature of choice?

Sir Peter Gershon: Yes, but to deliver a specified service level you are going to have to have some slack in the system, it is inevitable. There are some people in the private sector today who put such a premium on customer service that basically if you ring up a call centre you are answered within five rings. That is not a very common experience, I have to say, usually you are stuck in a queue. Those who put a premium that you are dealt with within five seconds clearly have put more resources in place who are potentially not being fully utilized in order to deliver that service level. That is a business decision they have made and there is a trade off between the cost, the capacity you need in place and the service level. Politicians are clearly faced with making similar trade-off decisions. Efficiency cannot be viewed in isolation from everything else that an organisation is trying to do. If you drive efficiency too hard, if you drive it faster than the capacity of the organisation to cope with it you will impair effectiveness in any organisation. At the end of the day that is what the people at the top have to make fundamental choices. How far do you let one agenda go before it has an impact on other agendas that you are trying to address? It is the politicians who must make that decision.

Q69 Mr Prentice: We have a particular remit for the civil service as you know. How do you motivate people in the civil service when you tell them there is going go be 84000 job losses?

Sir Peter Gershon: As a management challenge I do not think it is significantly different in the public sector than in the private sector. You have to deal with the issues about how do you keep the organisation going through what is clearly a very difficult period; how do you give support to those who may have to go and equally to those who are staying.

Q70 Mr Prentice: That seems terribly mechanistic, to get rid of 84000 people with no impact on the organisation.

Sir Peter Gershon: Of course there is an impact on the organisation.

Q71 Mr Prentice: Tell us what the impact on the organisation would be then.

Sir Peter Gershon: At the end of the day I think you have to look at what it means as an individual unit. I do not think there are a bunch of people sitting around in some out-post of the civil service thinking about the 84000; what they are thinking about is: "What does it mean for us in this unit?"

Q72 Mr Prentice: Do they not read in the newspapers the impression given that they are all gazing out of the window all day chewing pencils and not doing anything.

Sir Peter Gershon: I have gone on record that I think that is an appalling way of describing civil servants and portraying them as bowler-hatted stereotypes. That is disgraceful; it is an insult.

Q73 Mr Prentice: Is there such a thing as a public service ethos and is that a drag on efficiency?

Sir Peter Gershon: Yes, there are some things potentially which take longer and are more resource intensive in the civil service than they could be in the private sector as a result of certain things that support the public service ethos. All recruiting has to be advertised and gone through a selection process, whereas in the private sector that does not always happen. You may know the right person, you go and approach him, you recruit him; it is a faster and less resource intensive exercise.

Q74 Mr Prentice: What you are saying is that you want private sector disciplines applied in the civil service. You told us earlier that Whitehall needs a new breed of finance director - animals, I think you called them - and you concede that permanent secretaries should come from the private sector but not those who interact at the very highest level with the Prime Minister and so on. Is your thesis that the civil service is intrinsically inefficient and it needs the discipline of the private sector to get it firing on all cylinders. Is that what you are telling us?

Sir Peter Gershon: No, it is not.

Q75 Mr Prentice: Are there any jobs in the civil service that it would be inappropriate to transfer out into the private sector? You said that efficiency savings can be made by moving jobs currently in the public sector into the private sector.

Sir Peter Gershon: Yes but efficiencies could also be made by making greater use of some internal service providers who are publicly owned. If you take, for example, the bill paying agency in the MoD, the MoD know with great precision what it costs to pay a bill through that agency and we discovered that it is pretty efficient. People could use that mechanism outside the MoD to get their bills paid instead of doing it at a higher cost inside their own organisation or they could outsource it to the private sector. We should not assume that inherently the private sector is the universal panacea to improving efficiency in the public sector; it is not, far from it.

Q76 Mr Prentice: The Department for Work and Pensions is going to bear most of these job losses and I have raised here before the instance of file stores being transferred over to Capita. These are civil servants who currently look after files from government departments. They will lose their civil service status and be employed by private sector organisations such as Capita. Do you think that that in itself is a good thing, that a service which is provided by the public sector which delivers is transferred to the private sector?

Sir Peter Gershon: I think you have to look at each of these on its merits. I cannot give you an across the board answer to that question. All the best practice that relates to outsourcing says that you have to look at the business need, the business case and look at the thing on its merits. Outsourcing per se is neither good nor bad. It has the potential to deliver efficiencies; it may have the potential to deliver a better quality of service.

Q77 Chairman: When you leave here, would you do one thing for me, please? Would you phone the attendance allowance and the disability living allowance helpline and see what happens and form a judgment, having done that, whether you think this organisation needs more staff or less? When you have the minister just announcing the proposed job cuts in the CSA to the extent of 25 per cent is not to happen because it would produce chaos in the organisation given what has just been said about it, does this give you a sense of your programme beginning to fall apart?

Sir Peter Gershon: No. There are going to be some areas where what was originally intended may have to be abandoned or curtailed. There will be other areas that go better than was intended. You have to look at this in the round. Circumstances change. I am not surprised that we are seeing things where, because of operational circumstances, some of the intended actions are having to be curtailed. The Department may then find other compensating savings, for example through placing more focus on securing even bigger savings from procurement or looking at other areas of opportunity. No, I do not see that at all at this stage.

Q78 Chairman: You do see the monitoring for all of this as being very important, do you not, and the transparency of the monitoring? You say so in your report.

Sir Peter Gershon: Yes.

Q79 Chairman: Are you going to stay with this? You are going to be involved in the monitoring as well.

Sir Peter Gershon: I am involved in the oversight which is not the same as detailed monitoring.

Q80 Chairman: You are not just going to walk away having done this review; you are going to be here to make sure that when we get to 2007/08 you can be asked the questions about what happened.

Sir Peter Gershon: I have a continued interest, yes, but in its deliverability.

Q81 Chairman: We shall look forward to seeing you again.

Sir Peter Gershon: I shall look forward to that pleasure.

Q82 Mr Hopkins: Could I just ask one last question to reinforce the point you were making, Chairman? Would you be surprised, Peter, if I told you that my office recently telephoned the pension helpline to be told by a recorded voice that they were number 83 in the queue? Would this suggest that they are understaffed or overstaffed?

Sir Peter Gershon: It depends on what quality of service the service provider is intending to deliver. That is the fundamental thing. You then have to configure the resources accordingly. If, also, they make you aware that if you ring at a particular time of day and it is likely to be very congested, it would be better if you could ring at a different time of the day.

Q83 Chairman: You cannot call that choice, can you: "You phone when we would like you to"?

Sir Peter Gershon: I am not here to defend the Government's choice agenda.

Q84 Chairman: It is one of its key public service reform objectives.

Sir Peter Gershon: Yes, but it is for the Government to make the trade-offs between efficiency and choice and all the other agendas it is trying to pursue. That is not my job.

Q85 Chairman: No, you have quite enough on your plate.

Sir Peter Gershon: I have a limited on-going involvement in this. I have essentially returned to the private sector.

Q86 Chairman: As I say, we may want to revisit this some way down the line.

Sir Peter Gershon: Having done one review back in 1999 and proposed a target which was then substantially over-achieved, I have a personal interest in seeing that this report also delivers what it intended to deliver.

Q87 Chairman: Do you feel confident that this is going to happen?

Sir Peter Gershon: I am neither confident nor do I have a lack of confidence in this. I have never looked at efficiency drives this way. It is about driving this thing day by day. I am satisfied at the moment that there is continued sustained political and top management leadership of this. There is a proper programme management function in place which is putting pressure on departments. There is quarterly reporting to the Prime Minister and the Chancellor giving a traffic light assessment of progress and there are clearly things beginning to happen which are good. There are some things which you have alluded to which are clearly adverse to what was originally intended. It is much too early to say. I will be confident when we are in sight of the finishing line and even then we have to keep very focussed on it and not look over our shoulders and get complacent that we are so near. That is just my management style.

Chairman: I think that is a good note to end on. We are very grateful for your evidence this morning. Thank you very much indeed.