Memorandum submitted by the Department
for Culture, Media and Sport
DCMS ANNUAL REPORT 2006: WRITTEN QUESTIONS
FOR THE DEPARTMENT
PSA TARGETS
1. With the exception of the rollout of the
Everyday Sport campaign and the Taking Part survey the performance
against 2004 PSA targets appears to have progressed very little
since December when the Autumn Performance Report was produced.
Indeed, three of the targets have yet to be assessed a full year
into the three year spending review period. What additional evidence
is there of progress against 2004 PSA targets since December?
A1. For our PSA2 target (on obesity) data
from the 2004 Health Survey for England will be used to set the
baseline from which progress in meeting the target will be measured.
These data will be available in winter 2005-06.
Returns Data from the Taking Part survey will
be used to set the baseline against which progress in meeting
our 2004 PSA3 target (on participation) will be measured. Until
this baseline is set, we are not in a position to evaluate progress.
The baseline will be set in December 2006, once Taking Part has
been running for a full year.
The current PSA4 target (on productivity) was
rolled forward from a PSA target set in the 2002 Spending Review.
We await the first instalment of data that reflects progress between
2005-06 and 2007-08. These data, to be produced by the Office
of National Statistics (ONS), will be available in summer 2007.
2. The report does not make an assessment
of progress against each target, focussing instead at the "indicator"
level. This is potentially misleading in the case of PSA4 (Improve
productivity of the tourism, creative and leisure industries)
where each individual project is shown as "on course",
but the productivity data used to measure performance, given on
page 81, is experiencing slippage. What is your overall assessment
for PSA4 at present?
A2. DCMS's productivity target was numbered
PSA3 in SR02 and PSA4 in SR04. As this target was rolled forward
from SR02, this answer covers both targets.
ONS data used to measure overall progress are
released annually. Data from 2003 suggested that there was slippage
against the overall target. Data for 2004 were released by the
ONS in June 2006. We are currently working to update our productivity
estimates for PSA3 and reassess progress.
The first set of data for the SR04 target (PSA4)
will not be available until summer 2007. Our overall assessment
for PSA4 in the Annual Report is, at this point, expressed in
terms of the progress of individual programmes, which are all
on course.
3. Page 94 of the report refers to the tourism
element of PSA4 and states that ". . . it will not be possible
to prove the cause and effect between one work programme and a
certain amount of productivity gain.". How do you evaluate
projects and programmes to establish whether they were value for
money and worth replicating in the future?
A3. The Department has an evidence-based
approach to improving productivity in the tourism sector, based
on research about particular sector needs and the Treasury framework
for productivity.
Market failures that inhibit the productivity
and growth of the tourism sector—which is highly fragmented—include
under-investment in the marketing of national brands, an under-investment
in workforce skills and inadequate information for consumers.
The burden of regulation is also important for the tourism sector.
DCMS seeks to measure the impact of its programmes
and interventions through tailored indicators. The following are
examples of our interventions in relation to the visitor economy,
including how these are evaluated:
Marketing: Using evaluation methodology
broadly endorsed by the NAO, VisitBritain calculated that in 2004-05
for every £1 it invested in marketing and promoting Britain
overseas (£35 million in total) a return on investment of
£47 of additional tourist spending was secured (about £1.7
billion).
Licensing Reform: Reform of alcohol and
entertainment licensing took full effect in November 2005. It
is too early to assess the impact of the changes fully, but the
Department—working with the Home Office and the Department
for Health—has in place a comprehensive programme of evaluation.
A number of indicators will be used to assess the productivity
benefits of reform including the reduction of regulatory burdens
(up to £2 billion over 10 years), and assessments of market
intelligence eg changes in the hours of operation and the development
of business models.
Skills: People 1st, the Sector Skills
Council for the hospitality, travel and tourism industries will
be set challenging targets by the end of 2006, probably around
retention, recruitment, skill levels and investment, which will
then be monitored.
Reducing regulatory burdens: All Departments,
including DCMS, have measured the administrative costs of their
regulations and by the end of the summer will have set stretching
targets for reducing burdens. A five-year Simplification Plan
will also be published by the end of 2006. The Department's Economic
Impact Unit will monitor and report progress against these targets
and plans.
MANAGING RESOURCES
4. Repeating a point that has been previously
made in written questions to the Department, the Treasury Guidance
on Departmental Reports asks Departments to "provide alongside
their tables an explanation of what the numbers represent and
an explanation of what the numbers show". The absence of
sufficient explanatory notes alongside some of the core tables
leads the Committee to ask for explanations for the following
variances in expenditure, and the impact of those variances on
delivery:
| 2004-05
£000
Outturn
| 2005-06
£000
Estimate | 2006-07
£000
Plans
| Source |
| Capital spending by local authorities financed by DCMS grants
| 857,885 | 165,000 | —
| Page 112 |
| Tourism | 50,349 | 101,341
| 50,884 | Page 113 |
| Royal Parks | 26,655 | 19,916
| 25,812 | Page 113 |
| Museums and Galleries | 318,970
| 252,630 | 410,403 | Page 113
|
| | |
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A4. We accept that the data provided for 2005-06 are incorrect
and apologise to the Committee unreservedly for that. The errors
were caused by mapping inconsistencies between the Department's
new accounting system and the new Treasury COINS finance system,
which provides the data for the tables. However, these errors
should have been picked up at the proof-reading stage or in the
preparation of explanatory notes. Again, we accept the Committee's
point that more explanatory notes should be provided and will
address that point in future years.
As to the data in the current report, we are examining with
HM Treasury whether the other data are accurate. When that exercise
is completed we will publish a revised table on the department's
website and ensure that copies are provided to the Committee.
5. There are some anomalies in the data presented on staff
numbers which are also not clarified in explanatory notes:
(i) The table on page 102 shows 527 staff in post whilst
the table on page 116 suggests just 508.
A5i. There are two reasons why the figures are different:
(a) The table on page 102 gives the actual numbers
of staff in post as at 1 April 2005 whereas the table on page
116 provides an estimate as at 31 March 2006.
(b) The table on page 102 relates to the number of
staff in post where, for example, someone working two days a week
counts as 1.0, whereas the table on page 116 relates to the number
of full time equivalent staff where the same person would count
as 0.4.
(ii) The total staff in post of 527, also does not reconcile
to the figure of 519 in the 2005 Annual Report when adjusted for
starters (10) and leavers (34).
A5ii. The figures will not reconcile because the starters
figure on page 102 consists only of external recruits from outside
the Civil Service and does not include other joiners such as staff
transferring in on loan from other Government Departments, or
those returning to us at the end of their loans.
Similarly the table of Leavers on page 103 shows only resignations
from the Department and does not include staff who left the department
to join, or re-join, other Government Departments on loan or at
the end of their loans to us.
(iii) The two tables showing external recruitment, on
pages 101 and 102, contradict each other with respect to the number
of ethnic minority appointments.
How do you account for these differences?
A5iii. There is a typing error on the table on page 101. There
was one successful applicant at grade B from an ethnic minority
background which is correctly recorded on page 102, thus providing
the figure of 10% ethnic minority external recruits.
6. The resource budget on page 113 includes unallocated
provisions of £9.4 million in 2005-06, £13.1 million
in 2006-07 and £20.3 million in 2007-08. Can you explain
why these unallocated provisions are accumulating and whether
any plans exist to make use of them?
A6. Unallocated provisions are held against unforeseen
contingencies and include both near-cash and non-cash resource.
Most of the current unallocated provisions are non-cash (£12.8
million in 2006-07 and £18 million in 2007-08) and act as
a safeguard against increases in property values: if property
values rise, capital charges increase. Uncertainty increases the
further one looks into the future. As pressures arise or are identified,
cover is allocated from the unallocated provision; accordingly,
the amount remaining tends to be greater in later years.
7. In the 2005 Annual Report the target for the number
of ethnic minority staff in Senior Civil Service posts by 2008
was stated as 10%. The same target in the 2006 report is only
4%. Why has the target been relaxed?
A7. We have brought our target into line with the target
for the whole of the SCS, as DCMS ability to achieve this is to
a large extent dependent on the recruitment policies of other
government departments where many of our new SCS will come from.
However I would like to see DCMS do significantly better than
4%.
8. The figures for actual or forecast spending by local
authorities on functions relevant to the Department on page 112
have not been provided for 2005-06 to 2007-08, as they have been
in the past. Why has the data been omitted?
A8. Local Authorities' financial data are entered on
to the Treasury's COINS database, from which these tables are
drawn, by another Government Department. Our understanding is
that they are currently not available for any department.
EFFICIENCIES
9. The progress reported on the Efficiency Programme remains
unchanged since the Autumn Performance Report last December, despite
the fact that updates from sponsored bodies were expected in March
2006. Are you now able to report an updated position, and is the
Department on course to achieve its targets by 2008?
A9. The March 2006 efficiency figures were not available
by the time that the annual report was finalised. The Department
is currently on track to achieve its efficiency targets by 2008.
The updated efficiency figures are as follows:
DCMS Efficiency Targets, £m1
| Sector | Gains (as of 30-03-06)
| 2005-06 | Targets
2006-07
| 2007-08 |
| Internal | — | —
| 1 | 2 |
| NDPBs | 73 | 36
| 76 | 113 |
| Local Authorities | 572
| 49 | 98 | 146
|
| Total gains | 130 | 87
| 174 | 262 |
1 Figures have been rounded and therefore do not sum to the
total.
2 £16 million of this figure is still to be audited.
10. Given the commitment to achieving efficiency targets
and headcount reductions, how do you explain the increase in the
administration budget between 2004-05 and 2006-07 (from £40.4
million to £49.2 million) and the increased number of Senior
Civil Servants in post (from 26 to 28)?
A10. The increase in the Department's administration
budget reflects underspending compared to plans in 2004-05,
for instance from the postponement of investment spending and
consequent depreciation costs; and increases in spending since
on additional work associated with the Olympic Games, the Creative
Economy Programme, Humanitarian Assistance, the BBC Charter review
and an increase in capital charges associated with the Cockspur
Street project through which the Department will increase the
number of people it houses in its headquarters and release other
property.
The target for reducing headcount is 27 full time equivalents
(FTE) by March 2008 from an April 2004 baseline of 522.6 FTE (506.2
permanent staff and 16.4 FTE agency staff). There was no specific
target for reductions in the SCS. The winning Olympics bid has
required additional staffing of about 45 FTE, including several
SCS staff. We have also created a SCS post to lead work on humanitarian
assistance.
11. The original Efficiency Technical Note and the 2005
Annual Report refer to an internal efficiency target of £3
million by 2007-08. The revised Efficiency Technical Note and
the 2006 Annual Report put this target at only £2 million.
Why has the target been reduced?
A11. It was reported in the 2005 Annual Report that the
Department would deliver £3 million by 2007-08. This was
in fact a cumulative figure for the total savings required by
the Department, adding together the target of £1 million
in 2006-07 and £2 million in 2007-08. The figures included
in the revised Efficiency Technical Note and 2006 Annual Report
corrected this. The overall target has in no way been reduced.
12. The commitment to sustainable development within the
Department is discussed on pages 51 and 52. Is there a financial
cost to the Department's sustainability choices and, if so, is
it impacting on your ability to make efficiency gains?
A12. We are not aware of a practical conflict between
our objectives in improving efficiency and sustainability. Efficiency
focuses on getting the most from limited resources, and this complements
sustainable development.
The efficiency programme focuses on using resources more
efficiently. This is entirely in line with sustainable development.
For example estates management targets set out in our Sustainable
Development Action Plan focus on reducing energy use, water use,
paper consumption and levels of waste. By reducing financial costs
this reduction will simultaneously realise efficiency gains.
Tenderers for the current refurbishment of our headquarters
were required to demonstrate a responsible approach to sustainable
procurement and construction. Our chosen contractor offered both
the most cost effective and most sustainable tender. Our Sustainable
Procurement Strategy, due to be published later in the year, will
ensure such principles are enshrined in all procurement projects.
13. The revised Efficiency Technical Note forecast a cumulative
headcount reduction of three posts by March 2006. What was the
actual headcount reduction achieved by the end of March?
A13. The Department provides quarterly data to ONS on
its total headcount figures. At 31 March, this stood at 518, an
increase of eight since 31 March 2005 (see Page 116 2004-05 outturn).
This reflects an increase in work on the Olympics. Allowing for
that adjustment, agreed with HM Treasury, the reduction in staff
working on non-Olympic business is about 15 and is on course to
meet its headcount target.
CORRESPONDENCE
14. The Department's target time for responding to correspondence
from the public has been extended from 18 to 20 working days,
but the percentage answered within that target appears to have
fallen from 69% to 55% (the figures provided on page 104 of the
2006 Annual Report compute to a 55%, not 65%, and the figures
provided on page 78 of the 2005 Annual Report compute to 69%,
not 60%). Why has the target been extended and what is the Department
doing to improve the timeliness of responses to the public, MPs
and Peers?
A14. The Department apologises for the inaccurate percentage
calculation.
In 2005 the Department aligned its previous correspondence
handling system with a new, FOI compliant version, so that a single
process could occur for responses to FOI requests and public enquiries
alike. Although the previous 18 day target for answering public
correspondence was extended to 20 days in line with FOI obligations,
the Department seeks, wherever possible, to respond more quickly.
The Department acknowledges the dip in response times during
the period, and takes the issue very seriously. In late 2005 DCMS
set up the Central Information and Briefing Unit to help improve
response times and the quality of response supplied. Although
still in its infancy, the team has so far handled around 4,500
items of correspondence, with over 95% of cases so far meeting
internal targets.
FOLLOW UP
ON RESPONSE
TO QUESTIONS
ON SUPPLEMENTARY
ESTIMATES 2005-06
15. Financial Management Review—The Committee is
still awaiting the outcome of your discussions with HM Treasury
on whether or how to release the findings from the Department's
financial management review. The Committee remains interested
in the outcome of the review.
A.15 We are still discussing with HM Treasury the handling
of the findings from the Department's financial management review.
The memorandum that HM Treasury officials sent to the Treasury
Select Committee about the generic findings from the series of
reviews is attached.
The Department's own review resulted in recommendations about:
— the relationship between the Department and its
NDPBs;
— Management of resource allocations and expenditure;
and
— Financial literacy within DCMS and its sponsored
bodies.
A project board has been established to produce an action
plan and oversee its implementation. The action plan will be agreed
with HMT. When that is available, we will report back to the Committee.
16. Olympic Liabilities—Whilst the Committee accepts
that the cost of bringing forward infrastructure projects in the
Thames Gateway area have not yet been fully quantified, they are
concerned to hear that the costs for security at the Games are
"still being explored". The Committee would appreciate
an update on the Olympic liabilities as soon as possible.
A16. The security costs relating to the Olympic Games
are being comprehensively reviewed in the light of the events
of 7 July 2005. The security element of the costs was stated as
£190 million in the Candidature File which went forward
at the time of the Olympic bid. It is now clear, following work
by the Home Office, Metropolitan Police and security services
in conjunction with the Olympic Delivery Authority (ODA), that
these costs will be substantially higher. It is not yet possible,
six years out, to determine precisely what the security costs
will be. The ODA themselves have carried out intensive work on
the costs which will fall to them in securing the site during
the period of construction and hope to have these costs established
as part of the corporate planning process in the autumn. As for
the wider security costs, these are subject to review by a Cabinet
Committee but it would be unrealistic to expect these costs to
be firmed up soon. In the meantime, action has been taken to bear
down on costs through successive redesigns of the layout of the
Olympic Park, and full account has been taken of security advice.
17. Humanitarian Assistance Unit—What plans are
in place for the funding and operations of the new Humanitarian
Assistance Unit? Will the activities and expenditure be planned
or reactionary and what scope is there for securing emergency
funding for the Unit when its services are called upon?
A17. Funding is in place for the new Unit. Costs are
expected to be around £700,000 in 2005-06.
Much of the Unit's work will be planned in advance, where
it relates to ongoing support for victims of recent disasters
and contingency planning for future emergencies. Equally, it is
possible that further disasters in the next year will make unpredictable
demands on staff and budgets. The Department therefore has contingency
plans in place to meet those demands.
17 July 2006
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