Examination of Witnesses (Questions 200
- 217)
WEDNESDAY 21 NOVEMBER 2007
MRS HELEN
GHOSH
Q200 Chairman: He has found out very
quickly, has he not, what it does?
Mrs Ghosh: That was David Miliband.
Hilary Benn has found out very swiftly what it does. That dialogue—where
do we spend our money and what are the effective things to spend
out money on?—produced the two high level PSAs.
Q201 Mr Cox: When was that?
Mrs Ghosh: The PSAs of course
were announced at the time of the CSR settlement in October. We
were very clear about the underlying objectives of the department
in terms of the strategy set through the Strategy Refresh by close
2006.
Q202 Mr Cox: When were you given
these four core priorities?
Mrs Ghosh: These were essentially
set through the Strategy Refresh process. We always knew that
licence to operate—as you say Hilary Benn has certainly
had occasion to learn that—is the bedrock of what we do.
We knew that climate change and natural environment were our other
two priorities.
Q203 Mr Cox: Why are we in a situation
where the small programmes that David Taylor asked you about are
only having decisions—or not yet having decisions but likely
to have decisions—taken about them by February? Why is it
not possible for the definition of these priorities and the re-organisation
of the budget to take account of them to take place earlier than
the eleventh hour?
Mrs Ghosh: Because we did not
actually have our spending settlement for the CSR07 period until
October. The CSR07 period took a very long time.
Q204 Mr Cox: But you would have known
that it was not going to be a generous one. In fact you got a
more generous one than you expected.
Mrs Ghosh: Clearly we have been
doing thinking as we do all the time about how our spend equates
to our strategic priorities. Any decent department would be doing
that; wherever you are in the spending review cycle you would
be doing that.
Q205 Mr Cox: When did you first find
out that you were going to have to spend £100 million on
greener homes or the advice service?
Mrs Ghosh: We had been having
long term discussions with the Energy Savings Trust about their
proposals and plans for the future in our on-going dialogue. The
idea of the greener homes process was one that we have been discussing
with the Energy Savings Trust for some time.
Q206 Mr Cox: When did you first find
out about the £100 million to fund an advisory service for
greener homes?
Mrs Ghosh: It was the subject
in the normal way of discussion between ministers and Number 10.
As I say, we had already been talking to the Energy Savings Trust.
Q207 Mr Cox: My question was when
did you find out? Can you tell me?
Mrs Ghosh: That the Prime Minister
wished to announce that this week was part of the on-going debate
over a number of weeks with Number 10 in the light of the fact
that we have been having discussions with the Energy Savings Trust.
Q208 Mr Cox: Is the answer to my
question "quite recently"?
Mrs Ghosh: A matter of weeks.
Q209 Chairman: You did not say that
in your reply to our report, did you?
Mrs Ghosh: It is something that
we have been discussing with the Energy Savings Trust.
Q210 Mr Cox: The answer is that you
did not know you were going to have to spend £100 million
on greener homes until the last couple of weeks. Is that right?
Mrs Ghosh: We knew that it was
one of the things the Energy Savings Trust wanted to do and indeed
therefore, when we were thinking about the package on climate
change going forward it was a thing which again fitted in very
well with work other departments are doing on energy efficiency
and zero carbon homes. It was an obvious part of that package.
Q211 Mr Cox: A hundred million?
Mrs Ghosh: Over the three year
period.
Q212 Chairman: I want to just move
towards a conclusion, but am I right in saying that your Management
Board on the admin budget has asked all policy groups to deliver
a three per cent reduction in their pay budgets?
Mrs Ghosh: We have asked them
to show us—again this is absolutely normal business planning
practice in any organisation or any department that I have been
in—to say show us what that would look like. Clearly by
the end of the CSR07 period we need to have achieved our five
per cent, five per cent, five per cent reductions.
Q213 Chairman: Is that part of the
five per cent reduction?
Mrs Ghosh: It is part of the five
per cent reduction and what we are trying to do—and this
is back to the importance of people in an organisation like ours—is
to ask the policy and delivery groups to exemplify (I hate using
that term because it is technological) a lesser reduction in their
administrative costs than we are at the corporate centre because
clearly that is an area where we can reduce and increase efficiency
without damaging the delivery of our outcomes. We have asked them
to exemplify at different levels, focussing the admin reductions
mainly on the corporate centre and corporate services activities.
Q214 Chairman: In terms of the exemplification
that in simple terms means different examples of fewer people
being employed by Defra.
Mrs Ghosh: As I said, since we
have to reduce our admin spend five per cent, five per cent, five
per cent over the period—this is core Defra—I expect
Defra to be smaller by the end of the CSR07 period than it is
now and indeed for a department like ours which is a policy deliverer,
an influencer, you would expect it gradually to move to a different
sort of shape than it is now. Yes, I would expect the department
to be smaller.
Q215 Chairman: In your judgment when
is this process going to be completed? When will we have some
flesh on the bones so that we can invite you back to explain in
more detail which programmes are going to be affected and how
the administrative savings are going to be achieved?
Mrs Ghosh: As I say, we have to
have finalised budgets for all the reasons that members of the
Committee have described by February and so I would be very happy
to come back in late February/March to have the discussion.
Q216 Sir Peter Soulsby: Following
from that, one of the criticisms of Defra has been the lack of
certainty in its funding for agencies and bodies and so on.
Mrs Ghosh: Yes, which is what
this process will hopefully reduce.
Q217 Sir Peter Soulsby: When you
come to the conclusion of this, how much certainty are you going
to be able to give about the future years?
Mrs Ghosh: Yes, we will give as
much certainty as we can for future years. We will give clear
planning assumptions for future years but three years is a long
time in politics. If we take, for example, the Rural Payments
Agency, the amount of money that we are putting into the Rural
Payments Agency will be planned considerably to go down by year
three because of the improvements and efficiencies they have made.
That will be a lower level of spend by year three. We can predict
now what we think our spend pressures will be like in year three
but there will be other things that have arisen so we will give
as far as possible indicative allocations that people can plan
on, the trend of spend to everybody. However, we will have to
allow some flex for the unexpected or for new priorities from
government.
Sir Peter Soulsby: That is something
we can explore at that time.
Chairman: Can I thank you very much indeed
for coming at short notice and for giving us so generously your
time. It has been an interesting voyage of exploration. There
were one or two things which you indicated that you would clarify
in writing. We, as always, will be grateful to have that information.
We look forward to you coming to see us again once these deliberations
are concluded. Thank you very much.
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