Examination of Witnesses (Questions 220-239)
MR JON
CUNLIFFE, MR
JONATHAN STEPHENS,
MR NICK
HOLGATE, MR
DAVE RAMSDEN
AND MR
CHRIS MARTIN
14 DECEMBER 2004
Q220 Mr Beard: The Technical Notes do
seem to vary quite considerably in quality and detail. For instance,
the Department for Education and Skills' note is quite a thick
document, it is 55 pages and it covers programmes and details
down to providing white-boards in schools, whereas this one is
for the Home Office and it is three pages and provides little
more detail than the original Gershon report. Why is the quality
and detail of these notes so variable? Have they not had any guidelines
as to what is expected? The other notes are some way in between.
Has there not been any guidance as to what is expected to be produced
as these Technical Notes?
Mr Stephens: There has been guidance.
The production of the notes is the responsibility of individual
Departments within that guidance and we ensure that they go through
the scrutiny process that I have outlined.
Q221 Mr Beard: Has the National Audit
Office been satisfied that the Home Office technical Note met
the agreed criteria?
Mr Stephens: All the published
notes have been through the scrutiny process that I have discussed.
Q222 Mr Beard: It does not say very much
for it then, does it? This is no progress from the Gershon report
and there is a vast difference in detail in all these papers.
How are you going to get some sort of commonality? I think it
is appropriate that the Department should use these themselves,
but surely they should produce them according to some sort of
template or scheme.
Mr Stephens: We have set out the
general requirements that they are expected to meet. Departments
can legitimately take different approaches. Although the number
of departments have taken the approach of setting out in some
detail some of their plans for delivering on efficiency savings,
the underlying purpose of these notes is not so much actually
to set out detailed delivery plans but to set out how the high
level targets will be measured and how performance will be reported
against that.
Q223 Mr Beard: Does that include just
a straight copy of the Gershon report?
Mr Stephens: No.
Q224 Mr Beard: That is what this is virtually,
this is the Home Office's report. How does that fall within that
criterion?
Mr Stephens: I am not in a position
to answer.
Q225 Chairman: Could you look at it for
us and write back?
Mr Stephens: Yes.[4]
Q226 Mr Beard: The Financial Times
and the CBI described the efficiency plans as "confusing
and vague" and noted that some changes in policy "are
being dressed up as efficiency gains and could impact on front-line
services." For instance, the MoD's efficiency programme includes
savings from cutting the number of attack submarines from 10 to
8. Why is this considered to be an efficiency saving?
Mr Stephens: I am not in a position
to comment in detail on the individual plans of individual
departments, but the overall programme does the number of attack
submarines from 10 to 8. spending from areas that are less well
directed to achieving the outputs and outcomes that the Government
is committed to, to areas that are more effective in achieving
that and that is, as the Gershon report sets out, a legitimate
area of efficiency saving.
Q227 Mr Beard: One of the definitions
of efficiency savings set out in the Gershon report is reducing
inputs whilst maintaining the same level of service provision.
Which definition of efficiency does this proposal come under where
you abandon two submarines? You cannot say you are maintaining
the same service level at that rate.
Mr Stephens: I am not in a position
to comment on the detail of the MoD's plans. However, what the
MoD are concerned about is the overall defence effects rather
than, in particular, specific numbers of vehicles, vessels, etcetera,
in the course of re-orientating the defence forces to achieve
the same or increased defence effect that can result in efficiency
improvements.
Q228 Mr Beard: We should have an explanation
along those lines because it looks like a defence cut. The Department
for Transport is another one, the Efficiency Technical Note appears
to suggest that the increased revenue from the introduction of
new fines for infringements covering driver hours and vehicle
faults on HGVs and PSVs will be counted as an efficiency saving.
How can increased fines on HGV drivers be an efficiency saving?
Mr Stephens: I am sorry, I am
not in a position to comment in detail on the Department
for Transport's plans.
Q229 Mr Beard: Just one further one,
the Efficiency Technical Note for the DfES, which is pretty big
already and covers a lot of things, proposes that savings be made
from the modernisation of the teachers' pension scheme, including
raising the retirement age. How can raising teachers' retirement
age be considered an efficiency saving in the Gershon context?
Mr Stephens: I am sorry, I am
not in a position to comment.
Q230 Chairman: Could you discuss this
with the Department and write us a note on this?
Mr Stephens: Yes.[5]
Q231 Mr Beard: These savings, coming
to something like £20 billion, were an essential part of
the last Budget. The appearance is that you pays your money and
you takes your choice as to where the progress is in this. It
looks like a shambles.
Mr Stephens: We have set out in
the Pre-Budget Report the practical progress and savings which
have been secured already, even though the full programme is not
beginning until 2005. Over 10,000 posts in headquarters' central
service areas already reduced, significant savings by the Department
of Health, for example, in procuring its drugs bill. I think there
has been serious and real progress.
Mr Beard: They are all over the place,
different things from one department to another but they are not
actually within the realm of what Gershon was talking about in
his report. What is going to be done to make sure that they are?
Q232 Chairman: Can you write to us on
that?
Mr Cunliffe: We can let you have
a note on these issues.[6]
Q233 Chairman: Okay. On council tax,
the Chancellor announced a total of £1 billion for local
authorities to reduce the pressure for further rises in council
tax. How much of this amount is new money?
Mr Stephens: There is £125
million of additional expenditure plus £25 million of Barnett
consequentials, consequentials from the devolved administrations.
Q234 Chairman: How much would, say, Scotland
get of that?
Mr Stephens: I do not know the
breakdown of that £25 million offhand but we can let you
know.[7]
Chairman: By Thursday.
Q235 Mr Fallon: On this, we had the Comprehensive
Spending Review back in July planning expenditure for the next
three years and suddenly in the PBR we have this announcement
of £512 million being reallocated, why? If you had already
planned it for the next three years, why do you suddenly have
to reallocate half a billion?
Mr Stephens: The original plans
for 2005-06 were first drawn up in the 2002 Spending Review and
the approach that we took for the 2004 Spending Review was not
to reopen the 2005-06 plans which had been set already. It would
have been inappropriate in that context to have reopened this
particular area of those plans.
Q236 Mr Fallon: It turned out then you
had to have a whip round around Whitehall, did you not? The Department
for Education had to scrap the grant it was going to give as a
result of the Victoria Climbie case, the Department of Health
had to find another £100 million. Is that true or not?
Mr Stephens: What we are dealing
with here is the delivery of public services through a mix of
central and local authority led programmes and all the main
delivery departments—Health, Education, those dealing
with criminal justice, Transport—are delivering their programmes
and their outputs through a mix of central programmes, centrally
funded, and funding for local authorities to deliver local authority
programmes. What has happened here, as indeed happens in advance
of each local government finance settlement, is that the balance
between local and central funding is reviewed. Departments collectively
work together to look at the likely pressures on local authorities.
A range of measures were taken, some to reduce those pressures,
some to reallocate spending from central programmes to local authority
programmes, and the additional new money that I have indicated
was put in also. But at the end of the day this is all directed
to achieving the same delivery of public services that the Government
is committed to. It is a sensible review of a particular part
of the delivery chain that it makes sense to put the resources
down.
Mr Fallon: It sounds like a whip round
to me.
Q237 Chairman: On the taxation aspect,
originally why was it considered necessary to introduce major
changes to a complex area within the taxation of insurance companies
with just three working days' consultation and via a statutory
instrument?
Mr Holgate: This is to do with
applying proper rates of Corporation Tax to life companies' surplus
assets. I think the Financial Secretary has now agreed that the
proposal be in the Finance Bill but still with effect from 1 January
2005. We have given the industry more time to consider proposals.
Q238 Chairman: Three working days was
not very satisfactory, was it?
Mr Holgate: I think the people
concerned had known about it for quite a while.
Q239 Chairman: Was it satisfactory?
Mr Holgate: Well, we have—
4 Ev 75 Back
5
Ev 93 and 75 Back
6
Ev 75 Back
7
Note from the Witness: The Committee asked for a breakdown
of the increase for the devolved administrations announced in
the PBR as a consequence of the £125 million addition for
England. The unrounded figures are: Scotland £12.675 million;
Wales £7.363 million; Northern Ireland £4.168 million.
It is for the devolved administrations to decide how to allocate
these sums. Back
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