Examination of Witnesses (Questions 40
- 59)
WEDNESDAY 16 NOVEMBER 2005
MS HELEN
GHOSH, MR
BILL STOW
AND MR
ANDREW BURCHELL
Q40 James Duddridge: I would like
to move to the 2,400 staff cuts that will be required. I am wondering
particularly how that will affect staff morale and what pieces
of work departments can put in place to keep morale high? You
talked of monitoring staff, in your opening remarks, and particularly
as 1,600 of those staff are from executive agencies, and presumably
it is harder to control an environment and maintain morale, what
steps have the Department put in place to keep up that morale?
Ms Ghosh: I think there are a
number of things going on, many of which are around communication
and some of which are around improving the quality of our leadership
and management within the various organisations. In a way, I am
picking up the experience of my previous department, Revenue and
Customs, where there was much a larger, in some senses, organisational
change programme but certainly efficiency challenge. I am not
under the illusion that it is easy to sell to staff the idea that
we would be reducing numbers, and for many of them, in terms of
exactly where they would be working in the future, what the nature
of their job will be, uncertainty of that kind is unnerving and
tends to undermine staff morale. In terms of the impact of the
overall numbers cuts, I think we have sent out very clear messages
that, on the whole, we would expect to be able to achieve these
by a combination of the natural wastage levels that we have within
the organisation and targeted programmes of early retirement,
and we have had a lot of success and certainly we are on track
for this year in terms of achieving the trajectory of our staff
reductions. Further down the track, I suspect there will be issues
about some of the natural vacancies, retirements, resignations
and moving on to other jobs, not falling in the rights sorts of
places. My personal commitment, I think, is to try to engage staff
and communicate with staff as clearly as possible about what the
future holds for them as early as possible, and that is an absolutely
fundamental issue around maintaining their morale. It is the uncertainty,
for many of them, that is so undermining. In terms of morale across
the organisation, and 10 days is not very much, I have been very
impressed by the extent to which, going out and meeting people
in some of our new agencies, they have found the move to agency
status a real boost to morale. In some cases they are still uncertain.
As we know, there is some disquiet about pay and those sorts of
issues, but actually the creation of agencies, SVS, where I was,
and the Marine Fisheries Agency, where I was yesterday, they have
seen that kind of move to the sense of a single organisation,
a clear mission, some greater independence in terms of management,
as something that increases morale. I do not know whether Andrew
wants to comment more generally on the reception of the efficiency
programme by staff.
Mr Burchell: I think it is important
to say that this is a three-year programme, rather than something
you are trying to do very quickly, and I think that allows more
sensible planning and communication. Also it allows more time
for handling the reductions through natural wastage and redeployment.
In the case of the agency staff, which essentially is 1,600 from
the Rural Payments Agency, some of that has been anticipated in
the past as a result of the change programme in the RPA, which
was introduced, I think, in spring 2000, so there has been quite
a lot of lead time for this. Within the RPA the mix of staff has
changed quite considerably and they have quite a lot of agency
staff there doing a lot of the work, and clearly that mitigates,
, although I would not like to pretend that it removes but it
mitigates the impact on permanent staff, in terms of redeployment.
Q41 James Duddridge: That is certainly
reassuring. I did not realise it was 1,600 from principally one
agency; presumably it makes it a lot easier to manage?
Mr Burchell: Yes.
Q42 Patrick Hall: It is 2,400 staff
over three years. At the end of that period, what is the annual
anticipated ongoing saving?
Mr Burchell: The 1,600 saving
from the Rural Payments Agency is roughly about £35 million
in running costs, so prorating that it is probably about £50
million a year in staff costs.
Q43 Patrick Hall: They are not paid
very much then, are they?
Ms Ghosh: Our staff costs are
not actually very high.
Mr Burchell: Most of our expenditure
is not on staff, most of it is on programmes, in grants and payments.
Ms Ghosh: Yes, £369 million,
is that right, is our paybill, of our £5.5 billion, the total
bit of the paybill; quite unlike, say, a department like Revenue
and Customs, where most of it is paybill, a minute amount of our
spend is paybill. Therefore you would not expect to get large
amounts of savings in financial terms.
Q44 Patrick Hall: Is this over and
above the £610 million?
Mr Burchell: No. The savings from
the Rural Payment Agency change programme and the CAP reforms
are part of the £610 million.
Q45 Patrick Hall: Did I hear you
say that in order to mitigate the effects of losing core staff,
or directly-employed staff I should say, the Agency is employing
staff through agencies?
Mr Burchell: Certainly the Rural
Payments Agency has got quite a lot of agency staff.
Q46 Patrick Hall: They cost a lot
more, of course, so how do you save by doing that?
Mr Burchell: When the savings
are calculated, where you could have employed permanent Civil
Service staff, when you remove those posts they actually score
against the 2,400 reduction and if they are not there then you
are not paying for them, so that saves money.
Q47 Patrick Hall: The agency obviously
gets paid for it but the individuals probably get paid quite a
lot less?
Mr Burchell: In terms of the payments
they actually receive, agency staff get paid not dissimilar rates
to the people employed permanently but then you have got the margin
on top for the agency.
Q48 Patrick Hall: It is the temporary
nature of their employment that generates savings?
Mr Burchell: No. What we have
been trying to do is, over time, in order to mitigate the impact
of reducing the number of posts which could be filled by permanently-employed
civil servants, the management of the Rural Payments Agency in
particular has chosen to fill those posts with agency staff and
that gives them more flexibility over time in terms of reducing
the number of employees, because they are only temporary staff.
Ms Ghosh: Needed for a temporary
task.
Q49 Chairman: Let us move on. In
your opening statement, Permanent Secretary, you indicated to
us that you wanted to develop and improve your Department's relationships
with other parts of government. One of the things that we expressed
in our Report last year was whether, in fact, Defra had sufficient
clout actually to be taken seriously by other parts of government.
I think, in making that point, we were thinking particularly of
the climate change agenda and the question of who was in charge,
particularly about the interaction of environmental targets, outputs
and things like transport policy and energy policy. What is your
10-day assessment of where you stand in the clout stakes?
Ms Ghosh: We can never have enough
clout, is probably my ultimate objective. If I can just give a
little anecdote, before I hand over to Bill, who has much more
experience from the front. I was walking back this morning down
Whitehall with Nick Stern, who as you know is doing a study on
the economic impact of climate change, and he greeted me warmly
and said, "I just wanted to say that, in terms of collaboration
and the quality of the people that Defra has offered us to work
on the climate change project, you stand out across Whitehall
in terms of quality and collaboration." I was delighted to
hear that because, back to my earlier remarks, I think our clout
depends very much on (a) our being out there and engaged, and,
secondly, the quality of the people we can supply. I think that
is a very good example.
Q50 Chairman: Just before Mr Stow
replies, let me go down a path which I have trodden on a number
of occasions to give you a specific of what I am getting at. Your
Department published, probably three years ago, a glossy little
booklet extolling the virtues of biofuels. It quantified the impact
on rural employment and really sang the praises, so that if you
had landed from the proverbial planet Mars and read the booklet
you would have thought, "My gosh, this Government really
is switched on to biofuels." When we come to looking at the
biofuels industry, we find very little evidence on the ground
of anything that would fulfil the policy objectives as laid out
in your own Department's publications. When we come to the Treasury,
we find even less support, because the whole of the industry tells
us that the duty discount is not sufficient to kick-start an industry
and you are left wondering, where is the clout, where one department
can put out a glossy extending a policy but other parts of Whitehall
seem to frustrate it actually in delivering. I say that against
a background that within the last few days the Government have
made a lot of ballyhoo about saying, "We've got this wonderful
idea, inclusion of biofuels in main road fuels as a way of reducing
CO2" as if they had just discovered it. You discovered it
a long time ago and so did we, but why has it not happened, where
is the clout?
Ms Ghosh: It seems discourteous
to say to a person of your ministerial experience that, as you
know, there is always a debate within Whitehall about priorities
and what we are going to do next, and so on. I guess that part
of the explanation for it is we can put out such a proposition
but when we come to Treasury colleagues and fiscal issues there
may well be other priorities out there, and we are part of the
endless juggle that ministers have to perform of where they want
to put their money and what their priorities are. Since this is
a subject on which undoubtedly Bill will know much more than I,
I would like to hand over to him.
Mr Stow: Yes, there are formal
mechanisms and, as you will know, we have joint targets on climate
change with DTI and DfT and we have joint PSA targets on fuel
poverty with DTI and on air quality with DfT. Those in themselves
provide a clout for Defra, if you like, of ensuring that other
government departments are fully engaged with the important targets
that we have. Underpinning those then is a structure of formal
monitoring and reporting which enables us to put pressure on those
departments to deliver their part of the bargain, if you like.
If we look at an area like climate change then also we have the
Sustainable Energy Policy Network, which brings together a number
of other departments, like ODPM and Treasury, into machinery which
is there to deliver the objectives of government which were set
out in the Energy White Paper. The Climate Change Programme review
is a further, important subset now about where again we are working
together with all of the relevant departments to try to get a
balanced package for meeting our climate change objectives. In
that context, just to answer your point on biofuels, it may be
slow-burn but, as you say, we have now had from the Department
for Transport the announcement of the Renewable Transport Fuels
Obligation, which will save something like a million tonnes of
carbon, which is equivalent to taking a million cars off the road.
Our influence sometimes may be rather slow, as Helen says, there
are plenty of other players and other considerations, but we get
there.
Q51 Chairman: I appreciate some of
the mechanisms which are involved in the decision-making process,
but you talked about shared targets, shared agenda and you made
very clear what your own Department's policy objective was, in
terms of having a UK biofuels industry. You are quite right, what
was contained in the European Directive has now been, if you like,
tacitly acknowledged as UK Government policy, but the facts of
the matter are that, if your own objective to secure these fuels
being produced in the United Kingdom is to come to pass, something
has got to happen that is not happening at the moment. You have
had three years observing that nothing is happening, bar one plant
that produces, what, 400,000 litres of biofuels, something of
that order. You have got one plant that is up and running and
the rest is a sort of failure of the market to deliver. I think
what I am getting at is, it is alright having all of these wonderful,
shared objectives but the actual delivery is not a slow-burn it
is sedentary, it ain't moving, and I have not heard any real explanation
as to what you are going to do to overcome whatever the road-blocks
are to moving forward that kind of policy agenda?
Mr Stow: As I said, we have now
the announcement of the Renewable Transport Fuels Obligation,
which, I agree, is a stronger commitment from government than
we have had so far to developing biofuels. I understand that coming
along behind the plant that we already have there are more being
planned in prospect.
Q52 Chairman: Planned; there are
lots of planning applications but nothing on the ground and they
are all using waste oils. There is virtually nothing in the pipeline
that fulfils your policy in your pamphlet, it is not my idea,
this is your policy, about using materials grown in the United
Kingdom?
Mr Stow: My understanding is,
and I may have colleagues behind who will know more about this
than I do, that there are now plants being planned which will
use UK crops.
Q53 Chairman: I think, Permanent
Secretary, you can see very clearly some of the challenges. Let
us move on to sustainability. In your PSA there is a big paragraph
in target number one on sustainability, but what you actually
talk about is that all of this is, it says: "This target
is designed to be aspirational and cannot be achieved within the
period of one Spending Review." I think Mr Stow indicated
in his last comment where some of these aspirations lie, but how
are we going to measure whether actually you are achieving anything?
I think I am right in saying, for example, that your Department
is the only one to adopt the Carbon Trust's Management Programme;
is that right?
Ms Ghosh: I may be misremembering
this but certainly I entered into a similar partnership agreement
for Her Majesty's Revenue and Customs when I was there, so I think
they may have a relationship with Revenue and Customs, which is
a large number of people.
Q54 Chairman: There may be two. If
you take that one sort of specific across Whitehall, there is
something tangible about sustainability, why so little progress
on that particular area across Whitehall and how are you going
to demonstrate that sustainability has become embedded in government
policy? If I pick, say, the Department for Education, tell me
about that sustainability agenda; you must be monitoring it, I
am sure?
Ms Ghosh: I am sure there must
be colleagues in the Department who can do that. I think the vital
building-block for us, and for all departments, is the new proposal
for Sustainable Delivery Action Plans, and that will set us baselines
and targets to go forward and I think that will be a key tool
for us. I think we have a challenge, as a Department. I think
we mention somewhere in the Report that we should need to be best
in class. Being best in class for us is one vital way in which
we will influence other departments to follow our lead, across
the whole policy-making as well as internal management issues.
We need to show that we are a step change better than other departments,
to show them the way forward.
Q55 Chairman: My question was what
are you doing to ensure that this aspirational situation of embedding
sustainability in government is actually happening? What we have
got is a number of indicators, of which 11 out of 19, you have
said in your Report, are showing some positive development. The
question I asked specifically was, if I take the Department for
Education, how would I know they were doing it, what tangible
signs are there that sustainability exists in the Department for
Education? I see a piece of paper hurtling towards us. Mr Burchell,
does that give us the answer?
Mr Burchell: I will attempt to
answer. I would differentiate between embedding sustainable development
in terms of the operations of the department and, secondly, the
development and implementation of policies. As to the sustainability
of operations, Helen has already mentioned the Sustainable Development
Action Plans, which effectively comprise the sustainable operations
but also policies, and we will be having targets around things
like water, renewable energy, waste, and so on, which have been
around for some time and are being ratcheted up over time. In
relation to our knowing whether or not they are having an impact
in terms of the policies of other departments, to take your example
of the Department for Education and Skills, we have worked very
closely with them, as part of our public sector food procurement
initiative, to make sure that the sustainability agenda around
locally-sourced produce, which is at the heart of that initiative,
featured prominently within their guidance to schools and local
authorities in respect of the provision of school meals. We have
supported that through the provision of guidance and model contracts
to both local authorities and other parts of the public sector
in order to try to put that into operation. That would be a tangible
example of how, through our work with another department, we are
having an impact on their policies.
Q56 Chairman: I think it might be
helpful if you might care to develop across Whitehall a perspective
for us as to how the sustainability agenda is being embedded and
indicate to us how you are monitoring, because it is your number
one target to promote sustainable development across government
and the country as a whole as measured by achieving positive trends
in the Government's headline indicators of sustainable development.[18]
We cannot have any headlines unless it is fully embedded. I do
not want to dwell on the point ad nauseum, but if you could
develop this for a paper, obviously we would like to an eye on
how you are going for when we meet again in 12 months' time?
Ms Ghosh: I am afraid I do not
know my whole span of responsibilities yet, but I have been told
that, in fact, I do chair a Sustainability Programme Board, one
of the key tasks of which is to monitor all the headline indicators
that were set out in the UK Sustainable Development Strategy,
so I discover that I shall have a key role in monitoring the totality,
both in policy and in operational terms, of what departments are
doing. I will brief myself and report to you, very happily.
Chairman: We would love to know how you
are going to get the other eight indicators onto the positive
side.
Q57 James Duddridge: Very briefly,
just in terms of how the Department operates. In terms of percentage
of what the Department does, how much is solely within the control
of the Department and how much is actually cross-functional, either
at Whitehall level or at local government level, both of which
were touched on?
Ms Ghosh: A fascinating question.
Have we done that kind of activity-based analysis?
Mr Burchell: No. If you look at
the set of headline indicators you will see that many of those
are the lead policy responsibility of other government departments,
which is where our influencing role becomes very important.
Mr Stow: The other monitoring
mechanism that we will have is through a strengthened Sustainable
Development Commission. They will be monitoring the delivery of
the Action Plans and helping other departments draw up these Action
Plans and then monitoring delivery, so we will have an external,
independent body helping us with that monitoring task.
Q58 Mr Reed: Welcome, Permanent Secretary.
You have had a lot of other challenges facing you and, in fact,
I think it is a job description which is growing before our very
eyes. I would like to talk briefly about the climate change issue,
not so much challenging but hellishly difficult, from my point
of view and I imagine yours as well. The Chairman has talked about
the clout of Defra across Whitehall and the ability which the
Department has to enable other departments to help achieve government
aspirations and policies. With regard to the climate change reduction
by 12.5% and the aspiration of 20% by 2010, against 1990 levels,
how can you measure now, or can you measure, the contribution
made by the Department for Transport in achieving that goal?
Mr Stow: In the Climate Change
Programme review, we are looking at originally some 70-odd different
policy measures that we might be able to use to close the gap
between where we are now and the 20% target. What we have been
doing is trying to analyse for each of those measures, if you
like, the bang we get for our buck, in other words, how much carbon
saving we can deliver for a particular cost, either to government
or to business. We are looking across the whole field of what
can be delivered by business, what can be delivered by households,
through energy efficiency, and what can be delivered by transport.
As I said earlier, the Renewable Transport Fuels Obligation in
itself we think will deliver around a million tonnes of carbon
saving by 2010. Because we are still doing this analysis, still
finalising it and still deciding what are the most cost-effective
measures that will go into the programme, we are not yet at a
position where we can say exactly how much each of these broad
sectors will deliver, but that is the aim of the work which currently
is being undertaken.
Q59 Mr Reed: To press you, so the
DfT has not delivered anything tangible against the target?
Mr Stow: For the transport measures
that have been undertaken so far, I do not have in my head the
figure that we attribute to carbon savings from transport. It
is the most problematic area, there is no doubt about that. With
car usage increasing and aviation usage increasing, we are able
to bear down more easily on business emissions and, to some extent,
energy efficiency in households than we are on transport. It is
the most difficult area.
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