Examination of Witnesses (Questions 160-178)
MR NICK
MACPHERSON, MR
JON THOMPSON
AND MS
GILL RIDER
28 APRIL 2008
Q160 Mr Williams: Do you re-recruit?
In the NAO's situation we have been told on various occasions
by the C&AG that they train an enormous number of accountants
then lose them but eventually some of them come back to them.
That is your experience, is it not?
Mr Burr: Yes, some do. We are
more focused though on retaining those whom we train.
Q161 Mr Williams: How do your pay
scales compare with the normal Civil Service pay scales? Are they
in any way related or utterly unrelated?
Mr Burr: For accountants specifically,
I cannot say just like that. I could check.
Mr Macpherson: Your pay scales
are quite similar to ours generally.
Mr Burr: Yes, they are but I cannot
just give you comparative figures off the top of my head.
Q162 Mr Williams: I suppose people
who come back to you, as we have been told in the past, are people
who have now done well in the private sector and are looking to
put something back into the system.
Mr Burr: Yes.
Q163 Mr Williams: It would not be
the same motivation to come back.
Mr Macpherson: I am aware increasingly
of people who are coming back who have made a lot of money in
the private sector and want to do something different and contribute
something back. I am increasingly looking at Treasury alumni out
there who started off life at the Treasury, went off to the City
or something and might be in the market for coming back.
Q164 Mr Williams: That is interesting.
What sort of areas is it happening in?
Mr Macpherson: Tax policy is one
area where we managed to get someone very good to come back to
the Treasury. You could well get issues around financial services,
which are very much on my mind at the moment for obvious reasons,
where you could get people to come back. I am sitting next to
someone who chose to leave an extremely well remunerated job in
the private sector and take a big wage cut to come and join us
in the Civil Service.
Ms Rider: What more can I say?
Q165 Mr Williams: Are departments
very ready to embrace them and bring them back in or is there
diffidence about people who have been in the system, gone out
and just want to drop back into a slot for a short while?
Mr Thompson: My own view is that
it is good to have a range of experience; it is good to have someone
who has been out in the local government system in my particular
case and can then bring those skills back in terms of how we manage
finances going forward. We would recruit talent from anywhere
which has appropriate kinds of skills and capabilities for what
we need to do.
Mr Williams: There is not much
more I want to say. We have been round this course so many times
in the past but it is just good to see that some progress has
been made and I shall not be here next time you come, but we hope
you will be able to report a magnificent leap ahead. Thank you
for your evidence.
Q166 Chairman: A last couple of questions
from me, somewhat tangentially. As you may know, I have been waging
a little campaign within the Liaison Committee and the finance
sub-group of the Liaison Committee to improve Parliament's understanding
of the Government's spending plans. I wonder whether you think
this is a fruitful area for Parliament to interest itself in.
Although, as we see in this Committee, our post-hoc audit is very
good, we are much weaker as Parliament at scrutinising spending
plans as they develop. Do you think this is a fruitful area for
Parliament to interest itself in?
Mr Macpherson: I do not want to
trespass on matters which are rightfully for Parliament to determine
but may I just say two things? One is that I think it is in all
our interests to get better financial reporting and that is why
I welcome your cautious welcome for our line of sight project
to get better aligned information on public spending. Then obviously
it is an issue for you whether you institute different procedures
within Parliament on this. All I can say is that from a Treasury
perspective I welcome Parliament's interest in these issues. I
am not just saying that for form's sake, that I am bound to say
it anyway. I do genuinely believe it, because select committees,
the PAC in particular, can actually play a really important role
in terms of holding the executive to account; but I am a mere
bureaucrat.
Q167 Chairman: I would not ask you
to comment on this but, as you may know, I have suggested there
should be a separate budget committee to look at this. I just
wonder whether you could not make some things somewhat easier
for Parliament in the whole. Estimates only become available,
do they not, after the start of the financial year to which they
apply? Do you think that is helpful?
Mr Macpherson: Estimates are arcane
and I could quite understand why Members might give up on them.
Q168 Chairman: That is certainly
an understatement. I welcome your alignment.
Mr Macpherson: I do think it is
in all of our interest to report in a way which will enable you
to hold the Government to account.
Q169 Chairman: Do you think it would
help if the Treasury published spending reviews before the summer
recess so that the NAO could scrutinise them over the summer in
advance of the Committee's meeting in the autumn? Would you look
at that anyway?
Mr Macpherson: We will definitely
look at that, as we will look at all the Liaison Committee's discussions.
Q170 Chairman: Do you welcome the
involvement of the NAO? I know I have talked on several occasions
to Tim Burr and he is very happy to help parliamentary committees.
Presumably you would welcome their involvement.
Mr Macpherson: I hold the National
Audit Office in very high regard.
Chairman: As Mr Davidson would
say, I take that as a yes.
Q171 Mr Bacon: First of all to Gill
Rider. You said that you would go away and think about your guidance
that financial matters do not have to be part of the performance
assessment criteria for civil servants or for budget holders.
Once you have thought about it, can you send us a note on the
result of your thoughts, presumably either saying that you are
going to change your guidance and the reasons why or that you
are not going to and the reasons why?13 Finally Mr Macpherson,
in the final part of paragraph 2.26 it refers to the 32 ministers
who have attended financial and risk seminars. How many permanent
secretaries have attended financial and risk seminars?
Mr Macpherson: Not necessarily
the same one as ministers.
Q172 Mr Bacon: No but an equivalent
one.
Mr Macpherson: A very high proportion.
Indeed we had a special session between permanent secretaries
and finance directors last year to consider issues such as that.
I should just say for the record that my recollection is that
whenever we have had financial risk seminars the Chief Secretary
to the Treasury has tended to play quite an active role. What
I cannot tell you is whether the current Chief Secretary has been
there long enough to be involved in one.
Ms Diggle: She has.
Q173 Mr Bacon: Very finally, it refers
to the comparison between FTSE 100 Chief Executives and Permanent
Secretaries and acknowledges that, while the role is different,
25% nonetheless of FTSE 100 Chief Executives are financially qualified.
Are you expecting to see financially qualified Permanent Secretaries
coming through in the next few years? If so, at what rate?
13 Ev 24
Mr Macpherson: Definitely. They
will come through; we are beginning to get a critical mass. I
do not want to get into individual cases, but if I were going
to put money on someone, I would put a bit of money on my friend
Mr Thompson.
Q174 Mr Bacon: Well he started in
Norfolk County Council so it would not surprise us in Norfolk
either.
Ms Rider: The Committee ought
also to know that only 80% of FTSE 100 companies have qualified
financial directors. In that instance the Civil Service is actually
way ahead of the private sector.
Q175 Mr Davidson: Following on from
the point I asked about on paragraph 3.19, I have just had this
supplementary paper shown to me. Departments responded to questions
about key operational decisions. It is 31A on page 33 of the additional
paper where in relation to key operational decisions within departments
one department said that decisions were never based on a thorough
assessment of the financial implications, one department said
that decisions were seldom based on a thorough assessment of the
financial implications and eight departments said that decisions
were sometimes based on a thorough assessment of the financial
implications. Paragraph 3.19 relates to decisions taken by ministers
but page 33, Chart 31A relates to decisions taken within the department
itself. Over 25% there does not really seem to be acceptable.
Mr Macpherson: It is not.
Q176 Mr Davidson: How could that
have arisen?
Mr Macpherson: I find it surprising.
I do not know whether these results are confidential, but it would
be kind of useful to know which departments had answered in this
way so we could follow it up directly with them. It just sounds
to me bizarre.
Mr Davidson: Bizarre is a very
good word with which to end. Thank you very much.
Q177 Chairman: That concludes our
hearing. It has been a long hearing. I do not suppose it will
figure in the tabloids tomorrow, which is a pity. It has been
very interesting and very important; after all you will be managing
£678 billion a year in financial resources by 2011, which
is £11,000 for every man, woman and child in the UK. I hope,
Mr Burr, that we can make this part of our campaign over the next
couple of years before the end of this Parliament and return to
it before the end of this Parliament.
Mr Burr: Yes; sure.
Q178 Chairman: I would have thought
this was something where this Committee could make a difference.
Mr Burr: And we might want to
look at one or two individual departments as well.
Chairman: Thank you very much for your
attendance.
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