Examination of Witnesses (Questions 230-239)
JOHN HEALEY
MP
14 JUNE 2006
Q230 Chairman: Minister, can I welcome
you back to the Sub-Committee. Would you formally identify yourself,
please?
John Healey: Good afternoon, Mr
Fallon. My name is John Healey. I am Financial Secretary to the
Treasury.
Q231 Chairman: Thank you for assisting
us. I believe that you have a short opening statement to make,
is that right?
John Healey: "A short opening
statement" might be flattering the scribbles I have in front
of me here, but there were two or three things that I wanted the
chance to say first, if I may, and I thank you for the opportunity
to do so. First of all, thanks for inviting me to give evidence
to the Committee. Second, we in the Treasury very much welcome
this Committee's inquiry and look forward to the recommendations
that you might make following the inquiry. You have been running
your inquiry alongside our own consultation on this document Independence
for Statistics. Our consultation closes today. We have had
over 40 responses to the consultation so far. We will publish
all those responses, subject to the confidential acceptance that
respondents have given us. If it would assist the Committee, Mr
Fallon, I am happy to try to make those responses available earlier
to the Committee, if it would help your inquiry as you come to
consider your recommendations. I have something to say about the
substance of what is proposed in two areas, very briefly if I
may. In 2000 the set of reforms that we introduced at that stage
brought probably the most far-reaching changes to the statistical
system in the UK for 30 years. They were designed to create greater
independence in the statistical system. What we now propose to
do, following the Chancellor's announcement in November, is to
take these reforms further and to entrench independence in the
legislation. Our purpose is as follows. Despite the fact that
the quality of UK statistics is widely regarded as up with the
best in the world and despite the fact that there are few hard
examples of abuse in the system, nevertheless there are widespread
perceptions of political interference that undermine the degree
of confidence that we would want to see in the statistical system.
So we are now proposing to legislate for greater confidence; we
are proposing to legislate for independence from ministers; and
we are proposing to legislate for arrangements in which Parliament
will play a much more direct part in holding the statistical service
to account; to hold it to account for the quality, integrity and
also the efficiency of the statistical system in future.
Q232 Chairman: Can I just be clear
about the process? Are you anticipating legislation in the next
session, or will there be a draft bill? What is your plan at the
moment?
John Healey: The consultation
closes today. We will publish, as I have said, all the responses
we get. We will then look to respond to the consultation and we
will also look to respond to the recommendations that this Committee
makes. We are keen not to lose the momentum that has been created
by the Chancellor's announcement last November and the consultation
underway at the moment. We are therefore looking at the moment
to legislate at the earliest possible opportunity.
Q233 Chairman: Will that be by draft
bill initially, or will you go straight to a standard kind of
bill?
John Healey: We have not settled
that immediately, but I am keen to make sure that we can legislate
without a loss of momentum; that we can do so at the earliest
possible opportunity. I think that both the public debate that
we have been able to encourage since the Chancellor's announcement
and the outline of our proposals in the consultation document
here give us a good basis to move to preparing the legislation,
and then seeing it scrutinised through its process in Parliament.
Q234 Chairman: You referred to the
debate, Minister, but some of the debate has been quite critical.
The Statistics Commission described a number of your proposals
as "unclear or unsatisfactory". Simon Briscoe of the
Financial Times described your proposals as "shambolic".
The Chief Statistician of Canada told us that if the proposals
do not go beyond the ONS he felt they would amount to no more
than "tinkering". What do you say to the charge that
you missed the opportunity to have a much more wide-ranging reform
of statistics? That what you are doing is too limited?
John Healey: Two broad responses
to that, and then I am happy to deal with any details. First of
all, we set out the principles and the broad plan of reform in
the consultation document and, with respect to some of the details,
clearly it is right for us to pin down in response to the consultation
when we assess the responses that we get. Secondly, the debate
that is going on now—I hope the Committee's inquiry can
help play a part in this—will help to make it clearer to
people exactly what we are proposing. Some of the comment—not
all, but some—perhaps did not fully appreciate the detail
of what is planned. There clearly will be people who take issue
with some of what we are proposing, but it is difficult to find
anybody who disagrees with the principle that we should now move
to legislation. It is something which this Committee itself has
recommended to us in the past. It is difficult to see anybody
who disagrees with the intention to legislate to take ministers
largely out of the process of accountability. It is difficult
to find anybody who disagrees with the approach of, for the first
time, having a formal process of assessment of the quality and
integrity of national statistics, independently adjudged, under
the stewardship as part of the duties of this new board, instead
of simply having national statistics that are designated as such
and which are supposed to conform to the current code of practice.
Q235 Chairman: You describe that
your aim is to get this more independent of ministers, but the
document is rather coy about the exact status of the non-ministerial
department which you are going to set up. It presumably still
comes under some minister, in terms of funding and appointing
members of the board, and so on; but you are not explicit that
that will still be the Treasury—or will it in fact be the
Cabinet Office? Under whose shadow will the non-ministerial department
fall?
John Healey: If I may say so,
I think that you are mixing three things up there. First of all,
the nature of a non-ministerial department—which is what
we are proposing for the new Statistical Office. Secondly, the
questions around funding, to which clearly there is some serious
consideration to be given, and we have proposals in that field
to try to maximise independence. Thirdly, the residual role that
inevitably there must be within government in relation to statistics,
and whether that should remain as it is now with the Treasury,
or whether there are arguments for placing it elsewhere. So I
think that there are three separable elements to that. If you
would like me to deal with them, I can.
Q236 Chairman: No, I just found the
document a little coy. You gave other examples in the document
of existing non-ministerial departments and you referred, for
example, to Ofsted or the OFT. All of us in the House understand
that for Ofsted—its budget, the appointments to Ofsted—it
is all handled through the Department for Education. With OFT,
there is the responsibility to the DTI. However, you are not explicit
as to whether the overarching responsibility will still be with
the Treasury or whether it might be the Cabinet Office, for example.
Why are you coy on that?
John Healey: I do not believe
that we are being coy.
Q237 Chairman: Which is it then?
John Healey: Let me be clear then.
First of all, a non-ministerial department does not account to
ministers. At the moment, the Office for National Statistics accounts
for its function, its delivery and its performance to me, as the
minister responsible. I then account for its operations to Parliament.
A non-ministerial department—we are proposing to replace
my role as minister with the board—would report and be accountable
to the board, and the board would account for the discharge of
its duties to Parliament directly, taking ministers entirely out
of the process. On funding, there are concerns about the funding
arrangements for any non-ministerial department that is responsible
for statistics. What we propose to do is to take this new basis
for the ONS—the statistical service—out of the normal
Spending Review process. We propose to put it on a special funding
arrangement, based on period review and with increases according
to a set formula. In other words, it has a certainty and independence
of funding, which is atypical within the process of government—as,
Mr Fallon, you will in particular be aware—and takes it
out of the normal Spending Review round. In relation to the question
of any residual responsibilities and where they sit within government,
our view—but we are waiting to see what other views come
up in the consultation—is that it is probably appropriate
for the Treasury to retain that interest. That is for several
reasons really. First of all, if you look at the nature of the
national statistics that the ONS is responsible for—responsible
for about 250 national statistics—around about 150 of those
are economic. The statistics that tend to be economic tend to
be produced more regularly compared to, say, population surveys.
They tend to be more important; they tend to carry greater impact
and command more attention. The second thing is that if one is
concerned about the role—and this is clearly one of the
purposes of statistics, to help the public and others hold the
Government to account for what we promise to do—then the
Treasury, probably of any department, has the most strongly developed
audit function. We have a direct interest in performance against
public service agreements; we have a direct interest in departments
delivering value for money and, within the Treasury, we also have
the experience of dealing with statistical issues. Without being
hard and fast about it, therefore, it seems to me sensible to
leave with the Treasury whatever residual responsibilities need
to be with ministers. As I say, however, we will examine the views
that come in through the consultation.
Q238 Peter Viggers: I was very pleased
when I heard that independence was to be given to statistics.
My heart has been sinking ever since, when I realise that the
Treasury will be tightening its grip. Can I conflate several comments
that have been made, minister? One is the proposal that there
should be an operational professional body dealing with the oversight
of all statistics and maintaining high professional standards.
That is the first issue. The second issue is that there should
be a body which is clearly independent and can provide oversight
to the whole system. Are you seeking to divide those two? Do you
really think that the second of those bodies will look as if it
is independent?
John Healey: I think that it will
not just look as if it is independent; it will be independent.
Because I am very concerned by your opening remark, can I ask
you to explain how you believe these proposals mean that the Treasury
is tightening its grip? If that is the case, it is certainly completely
counter to what is intended and I would like to understand that,
because I do not believe that in any detail of the proposals there
is an aspect of the Treasury tightening its grip on the statistical
system.
Q239 Peter Viggers: I spent the last
week preparing evidence for the Committee on Standards in Public
Life relating to the Speaker's Committee on the Electoral Commission,
and there is a truly independent body. I do not see any comparable
level of independence in this so-called non-ministerial department
which is being proposed.
John Healey: That is helpful.
This is not based on the Electoral Commission model; this is not
based on the model of the National Audit Office. There were those
who argued we should be looking at independence based on the National
Audit Office model, directly accountable to Parliament. That is
not a model we have accepted, really for the following reasons.
It is quite important for us as parliamentarians to be clear about
the principles here. The first reason is this. Parliament's proper
role is obviously to hold government to account for what it does.
As part of that role, it is quite right that the NAO is set up
and serves and reports directly to Parliament, because what it
does is to help Parliament ensure that the money it has voted
to the Government is being used properly and there is good value
for money. So it has a very particular role in supporting Parliament's
proper scrutiny and accountability function in relation to the
executive. If you look at the question of national statistics,
the purpose, the value, the users of national statistics, go very
much wider than Parliament. In those circumstances, the production
of statistics is to a large extent an executive function, serving
and producing a pubic good. In those circumstances, the NAO model—of
a body of Parliament reporting directly and only to Parliament—in
our view is simply not appropriate. That is why we have not gone
down that sort of route. In terms of what we do propose and why
I believe that this will be independent, we are looking to legislate
in a significantly comprehensive way for the roles and responsibilities
of this independent board and of the Chief Statistician within
the new system. We are looking to legislate for some of the important
parts of the modus operandi of the board: so the number
and composition of the board; the right to establish and delegate
work to committees; the core relationships of the board in relation
to the Chief Statistician and to the Office for National Statistics.
We are proposing to legislate for the requirement of the board
to produce a code of practice; to develop and maintain that; to
consult in doing so; and to use that to assess, for the first
time, the national statistics for their quality and integrity.
Finally, we are looking to legislate to create a duty for the
board to advise government on serious concerns about the operation
of the system and the wider coverage of the system. To that extent,
therefore, although there is a particular focus on national statistics
and the integrity and the quality of national statistics, this
board will also have a statutorily based responsibility for all
statistics—which was one of the points that you put to me.
|
