Examination of Witnesses (Questions 160
- 179)
WEDNESDAY 7 DECEMBER 2005
MR JON
CUNLIFFE, MR
DAVE RAMSDEN,
MR TONY
ORHNIAL, MR
JOHN KINGMAN
AND MS
MRIDUL BRIVATI
Q160 Mr Todd: Moving on to efficiencies,
this morning we were talking to our panel of experts on the impact
of the initial phase of the Gershon savings programme. I have
to say it was met with a great deal of scepticism as to whether
very much progress has been made, certainly there was criticism
of the evidence which has been presented in the PBR for the savings
which have been produced. There was some enthusiasm for the NAO's
audit of this because it was felt that it might produce greater
clarity than had been brought forward so far. How comfortable
are you with the progress on the savings which are supposed to
be being progressed this year?
Ms Brivati: We believe that we
have made significant progress in delivering efficiency savings
against the target of £21½ billion. We believe £4.7
billion has been delivered so far which shows us well on course
to meet the target. We have two sorts of processes which back-up
the veracity of those statements, one is that we have a system
of ETNs, efficiency technical notes, which departments publish
where they are required to set out, in line with the guidance
which we give out, where they will make efficiencies, how they
will make efficiencies and how they will measure those efficiencies.
The efficiency technical notes are developed with the helpful
advice from the NAO and certainly I think there has been progress
over the last year compared with the first generation which appeared
last year in terms of the consistency and coverage of those efficiency
technical notes.
Q161 Mr Todd: While obviously the
NAO's activities are not your responsibility, have you mentioned
that they are working in partnership in some areas?
Ms Brivati: Yes, they do.
Q162 Mr Todd: Have you worked out
how they intend to audit this process? Clearly there are a lot
of opportunities for smoke and mirrors in this.
Ms Brivati: I know that the NAO
intend to report on this in the spring but they are working on
their own independent report on this in the spring. The other
element which gives us assurance on whether efficiency savings
are really being made is that the reports which come from departments
are scrutinised by the Office of Government Commerce under John
Oughton who is responsible for reporting to the Chancellor and
Prime Minister upon the delivery of the efficiency programme.
A team within that body examines and validates the numbers which
departments produce.
Q163 Mr Todd: One possible gap is
that local government is also intending to produce savings as
part of this process and their activities are audited in rather
a different way. Is there some way of sweeping up the effects
of the Gershon Review in local government and producing a coherent
picture which we can all understand?
Ms Brivati: The efficiency savings
which are delivered by local government are also mirrored in the
efficiency camps, if I can put it that way, which central government
departments submit to the OGC. While I would not claim it is especially
straightforward to trace these through, it is possible to trace
them through and understand how local authorities are contributing
to the efficiency totals in that way.
Q164 Mr Todd: The impression given
is that local authorities are running slightly ahead of the gift
programme in delivery of savings. Is that reasonable from the
interpretation we have been given?
Ms Brivati: I think that is reasonable.
As at the PBR, local authorities have delivered about £0.75
billion of savings which is ahead of what we expected them to
have done.
Q165 Mr Todd: This does suggest that
there is someone else running behind. Since you have said that
you are roughly on track and local authorities are ahead then
it would suggest there are some departments which are not moving
with quite the requisite determination.
Ms Brivati: That is difficult
for me to say without having the trajectory in front of me. What
I do know is I expect different rates of delivery from different
departments because the composition of the efficiency savings
which we expect from different departments are different.
Q166 Mr Todd: The presumption behind
this review is that departments retain the savings. An obvious
view would be but that may not fit with the political priorities
of government as to whether those savings should be delivered
to continue expenditure in those particular departments. Is there
any process of review of the savings and their potential destination
in public spending terms?
Ms Brivati: The efficiency savings
which have been delivered now were part of the SRO4 settlement.
Their being retained by departments was part of the composition
of that settlement. That settlement remains closed for the 2004
period.
Q167 Mr Todd: Presumably it will
be subject to review within the next spending round?
Ms Brivati: Efficiency will be
an important part of the next spending round.
Q168 Mr Todd: Which may include the
reallocation of savings achieved and to be achieved in this exercise?
Ms Brivati: I do not think it
is helpful now for me to say what the conclusion of the next spending
round will be.
Mr Todd: I am merely suggesting that
intellectually that will make sense, that the next spending round
examines that issue of achievement and decides whether that spending
should be retained within that department or used for other purposes
which are more beneficial.
Q169 Chairman: What are efficiency
savings? I have a communication from the Office of the Deputy
Prime Minister which is concerned with Fylde Borough Council.
It says: "Efficiency gains have been realised through several
Friends groups and a partnership with the PCT. The £4,000
equates to the cost of labour and other resources that have been
contributed by the Friends groups to improve Fairhaven Lake and
Park View Playing Fields." "The £4,000 is a conservative
calculation based on the hours contributed [by the Friends] and
represents what it would have cost the council to do the work.
This is also work that the council could not afford to have carried
out and may not have been done without the Friends group."
What we are looking for is an efficiency day out for volunteers.
Dive into your local lake and you will save the government and
local authorities a hell of a lot of money. Is this what we are
talking about? I am looking for a written response.
Ms Brivati: I am very grateful.
I will look at it.
Q170 Chairman: Jon, can you look
at it?[1]
Mr Cunliffe: Yes.
Q171 Damian Green: I have literally
a request for guidance. We have got this £4.7 billion aggregate
figure but I cannot find it disaggregated properly anywhere in
departments or numbers of posts or jobs which have been saved.
Where should we look for that?
Ms Brivati: I do not think this
is reported in the PBR documentation.
Q172 Damian Green: Presumably it
must be available somewhere. If you have got the aggregate figure
presumably it must be capable of being disaggregated into performance?
Ms Brivati: That data will be
held by OGC.
Q173 Damian Green: Is it therefore
publicly available? Is it available to Parliament?
Mr Cunliffe: We can look at that
and come back to you.
Q174 Damian Green: Can you write
to the Committee?[2]
Mr Cunliffe: Yes.
Damian Green: That would be useful.
Q175 Mr Mudie: I want to go into
the section Delivering High Quality Public Services. It must have
been a quiet Pre-Budget for you, it seems to me. These may be
questions for your boss rather than you. Your box at the start
says there was a fair bit of money put in but £53 million
to Youth Opportunity Funds which amounts to £500,000 over
two years to each local authority which will hardly break the
bank. £305 million and £508 million, which I want to
come to, to local authorities but that is replacement so the rates
do not go up, and then £665 million to anti-terrorism and
Iraq. Apart from those three things, what else did we put in the
Pre-Budget for delivering high quality public services? Do you
think we have got the priorities right: £650 million for
Iraq and £53 million for youth opportunities?
Ms Brivati: You mentioned a number
of things—
Q176 Mr Mudie: I did, page 125.
Ms Brivati: —that are described
in chapter 6. The main addition to public spending is to the special
reserve for military operations in Iraq and also an additional
£85 million for counter-terrorism.
Q177 Mr Mudie: It is not the sort
of public services the public cheer for or beg for, is it?
Ms Brivati: Is this what the PBR
is for? It is our convention to return to special reserve at Budget
time and at PBR time to examine applications.
Q178 Mr Mudie: If we take those out
it is hardly having youngsters and people cheering in the streets,
the amount of money we are putting in is £53 million in this
Pre-Budget Report.
Ms Brivati: Yes. I should probably
also mention what we are doing on housing and the Government's
response to Barker and its intention to increase its new ambition
on social housing, which is another significant—
Q179 Mr Mudie: Sorry. I am having
difficulty hearing you.
Ms Brivati: The PBR also sets
out a new ambition on social housing as part of the Government's
response to Barker.
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