Examination of Witnesses (Questions 100-119)
MR NICK
MACPHERSON, MR
JON THOMPSON
AND MS
GILL RIDER
28 APRIL 2008
Q100 Nigel Griffiths: "Significantly
improved". Of course there may have been improvements but
"significantly" implies that they are not very measurable.
Mr Macpherson: Okay. I agreed
the Report so this must be the case, so I am not going to argue
with it. Is this good enough? No. We have to get better at it.
Q101 Nigel Griffiths: You replied
in answer to earlier questions that you take a tough line and
would sack somebody who continually overspent. In the past few
hearings we have had one department which consistently overspent
and that was the MoD. It just so happens the finance director
has no qualifications. Are you going to sack him?
Mr Macpherson: We agreed that
both this Committee and the Treasury have applied some pressure
on the MoD on this point.
Q102 Nigel Griffiths: Is the pressure
effective?
Mr Macpherson: It is being effective
because they are advertising.
Q103 Nigel Griffiths: Good. I hope
this time that the advertising process, because they have been
through that before, gets somebody who has the qualifications.
Mr Macpherson: Are you going to
be on the panel Jon?
Mr Thompson: Yes.
Q104 Nigel Griffiths: You are going
to be able to come back here and assure us that that is the case,
I hope. Under-spending departments. Defra is consistently under-spending.
Have you got to grips with them?
Mr Macpherson: We are getting
to grips with them and you are right to mention them. They are
a department who were a poor performer on financial management
but are improving quite a lot. A good measure of a department
who has not got a brilliant grip on its finances is one which
comes along to the Treasury and says they are going to overspend
and can they have some money from the reserve and then at the
end of the year it turns out you need not have bothered giving
them the money. That is usually a good indicator. I can remember
that experience, when I was in charge of public spending in about
2003, happened with Defra. It would not happen today.
Q105 Nigel Griffiths: Which departments,
in paragraph 4.2 then, are you most concerned about?
Mr Macpherson: In terms of under-spending?
Q106 Nigel Griffiths: Let me ask
you the soft question first. Which is the best performing department
that you have the least concerns about and are the resources that
you devote to that department a fraction of what you throw into
a department you have concerns about and what are those resources?
Mr Macpherson: The measure you
are talking about here is whether you are under-spending a lot
less than you are forecasting. I can give you a table.
Q107 Nigel Griffiths: Just give me
one from the top of your head that is the high performer.
Mr Macpherson: I would always
turn to my friends at the Department for Children and Schools
and Families, which is a high performer. Having said that, there
have been times when your department has under-spent and you have
quite a big stock of end-year flexibility, have you not?
Q108 Nigel Griffiths: And if I might
put the same question. What is the difference between the resources?
What sort of resources do you put into the poor achiever to help
them, as against the ones that are costing a lot?
Mr Macpherson: Let me give you
two examples of how the Treasury would operate in relation to
that. First, we try to have a risk-based approach.
Q109 Nigel Griffiths: Risk-based
approach is no problem because we get the reports every year.
We can give you the list.
Mr Macpherson: Exactly. In the
past we put a lot more resource into dealing with the Home Office
because it clearly was a problem, whereas dealing with the Department
for Education, as it then was, was not a problem. That is one
thing. The other thing which we would home in on are delegations.
If we have a concern about a department, we might reduce the delegations.
An example of that happened when the Health Service overspent
a lot three years ago and we actually required them to clear more
proposals directly with the Treasury. We try to have a proportionate
approach in that sense.
Q110 Chairman: You were wise to refer
to the Department for Children because you may remember that in
a previous hearing we found that they had the best record in terms
of allocating space per employee and you, the Treasury, had the
worst record. When I put this to Dame Mary, she said you do a
lot of thinking in the Treasury.
Mr Macpherson: There is nothing
like having a big budget constraint and I can assure you that
we are going to be using our space more effectively in future.
Q111 Mr Davidson: May I start by
taking up the question of non-professional staff, as it were,
having financial awareness and looking particularly at paragraphs
2.11 and onwards? Paragraph 2.14 says " ... in 44 per cent
of departments not a single senior civil servant has completed
tier 1", which is the bottom tier of the Finance Skills
for All programme. Do you regard that as satisfactory and
do you know what departments those are?
Ms Rider: Clearly Case Example
1 illustrates a department which has done extremely well, the
DfT.
Q112 Mr Davidson: I understand that,
that is not what I am asking you. What I am asking you is whether
you regard that as acceptable and whether you know which departments
those are.
Ms Rider: I would like to, as
we talked earlier—
Q113 Mr Davidson: A yes or no would
be sufficient.
Ms Rider: It is slightly more
complicated.
Q114 Mr Davidson: Is it or is it
not acceptable and do you or do you not know which these departments
are?
Ms Rider: It is more complicated.
Mr Macpherson: We do know.
Ms Rider: We do know absolutely
who has taken this course and who has not. However, it is more
complicated because a number of departments, such as the Cabinet
Office, have their own financial training that they are implementing
and getting people to take.
Q115 Mr Davidson: You could have
said yes then, you do regard that as acceptable, and then gone
on to clarify that. If the percentage that has that level or equivalent
is higher, are there departments whose conduct you regard as unacceptable?
Ms Rider: I would like to see
more people developing this training and using this training.
Q116 Mr Davidson: Are there any departments
in particular?
Ms Rider: We have a little list
here. The best thing to do in all these circumstances is really
focus on the people who are doing well.
Q117 Mr Davidson: No, I do not know
and I am asking the questions. You know what the question is.
Can you answer it?
Mr Macpherson: We can give you
a list of the departments but unfortunately what I do not have
in front of me are the percentages.
Q118 Mr Davidson: Can you give us
that in writing then as we are clearly not going to get much of
an answer today? Do you have something that could be described
as a league table of those departments that are doing best and
by definition therefore those that are doing least well and, if
so, could you let us have it?[4]
Mr Macpherson: On the training
front?
Q119 Mr Davidson: Yes.
Mr Macpherson: Yes; definitely.
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