Select Committee on Public Administration Minutes of Evidence


Examination of Witnesses (Questions 300-319)

MR BERNARD HERDAN

22 MARCH 2007

  Q300 Mr Prentice: You have to really screw up in a big way to lose it.

  Mr Herdan: Yes, it would be fairly unusual. It may be that an organisation will chose not to re-apply. You get re-accredited on a regular basis every three years, so organisations who are doing badly will chose not to come back and be re-accredited if they know they are going to lose it.

  Q301  Mr Prentice: Is it motivating for the staff to belong to an organisation that has a Charter Mark?

  Mr Herdan: Yes, it is one of the key aspects to the scheme. It is extremely motivating. We found lots of examples of that including my own organisation where we did actually survey the staff. We got about 70% saying they found it very motivational. They felt it did drive up standards within the organisation. We found that in lots of other examples around the country.

  Q302  Mr Prentice: Those 400,000 people in the 1,600 organisations with Charter Marks, they are happy people?

  Mr Herdan: They are people who have some pride in their organisation.

  Q303  Mr Prentice: Does that mean they are happy in their work?

  Mr Herdan: I am not sure we are measuring that. We could assume that people who have some pride in what they are doing have a degree of job satisfaction.

  Q304  Mr Prentice: It would be impossible to deliver a decent service to the public if you were fundamentally unhappy in your work.

  Mr Herdan: That is true. There is lots of research which shows the correlation between staff being pleased with their work and the service they give customers. There would be a correlation.

  Q305  Mr Prentice: Is there a correlation between Charter Mark organisations and organisations that have mission statements?

  Mr Herdan: I would expect so. Charter Mark organisations would generally have a very clear statement of objectives including that customer-facing ethos.

  Q306  Mr Prentice: You do not think people are getting too jaded by all this kind of stuff, mission statements, Charter Marks, Deputy Prime Minister's awards?

  Mr Herdan: There is certainly a proliferation of award schemes and in our research for the public we found the public were not that impressed with people having badges.

  Q307  Mr Prentice: In your memorandum you tell us there is a general scepticism about quality schemes. If members of the public are all so sceptical, what feeds this scepticism?

  Mr Herdan: I think it is the fact there are so many award schemes and some of them are not at all rigorous. You can have award schemes which are sponsored by companies and there is probably a link between who has got the business and so on. The award schemes have become devalued by the large numbers of them.

  Q308  Mr Prentice: Which are the award schemes that are totally useless, past their sell-by date and ought to be shelved?

  Mr Herdan: I am not sure I cannot comment on that. What I would say is there are some award schemes where there is no rigour to the identification of who should win.

  Q309  Mr Prentice: You must be able to name names; it is not secret. You have looked into this. You spent six months looking at Charter Marks.

  Mr Herdan: We looked at schemes which do not have any formal requirements in terms of external validation. People simply put in an application and people say, on the face of that, we will give that organisation an award. There are a few of them. A number of the magazines that run award schemes are of that nature, things like the Health Service Journal Awards which are just based on what people say; there is no peer review. I make a differentiation between those kinds of schemes and the ones where there is actually independent assessment, an independent review and assessors coming on site and looking at what you are doing rather than taking your word for it.

  Q310  Mr Prentice: Who are these assessors, the people who are checking on the awards?

  Mr Herdan: In the context of the Charter Mark scheme there are four companies who have been chosen by competitive tender by the Cabinet Office who employ assessors. They are people who have a lot of experience. A lot of them have worked in the public sector in the past. They are trained and are accredited by an external organisation called the UKAS, the UK Accreditation Service. There is quite a lot of rigor around both their training and assessment. They are effectively given that accreditation to deliver the service.

  Q311  Mr Prentice: Why do you tell us that ways should be found to streamline the Charter Mark? What is making it so cumbersome?

  Mr Herdan: What I found talking to Charter Mark holders, particularly large organisations with multiple sites, was that every single site was required, even if they were doing the same process, to be independently assessed and that seemed to be a bit heavyweight. They said "Could we not have a system where you could do spot checks and more self-assessment?" I have recommended quite a lot of that kind of streamlining so you would not have to have, for example, every single job centre visited by a team of assessors in order to give the overall Jobcentre Plus the Charter Mark. You would be able to allow that there will be internal reviewers doing a degree of that and external assessments of a sample. Also that kind of streamlining in terms of having a rolling annual assessment of a different sample of centres each year rather than a big staged event once every three years. There are a number of ways it could be run a bit more smoothly. The Investors in People accreditation, which is a very comparable kind of process, allows internal reviewers to do the basic review and their work is then assessed. In my experience, those people who are your own staff are harder on you and know more about you than the external assessment so it is a more powerful technique.

  Q312  Mr Prentice: The outsourcing you were telling us about, you also mentioned that it ought to be retained as a responsibility of government, that the centre of the spider's web should be in the Cabinet Office or the Prime Minister's Delivery Unit. Why not just move the whole shooting match out of government completely?

  Mr Herdan: We did think about that. We looked at that as an option when we were looking at all the possibilities and it had some attractions in terms of having a more adept marketing machine out there in the private sector pushing the scheme, it might work better, be a bit less bureaucratic perhaps. Against that this seems to me a pretty important piece of government policy that would want to see high standards of public service. Successive governments have talked about that. This does need to link to other government initiatives around. We got the Varney Review, and Gershon and Lyons, as well as various activities going on to drive up public service standards and to improve efficiency. If this was disconnected from all of that it would not play a role in terms of delivering government policy, which is to improve the quality of public services. I came to the view that it should have a central theme. Also the surveys we have done of the Charter Mark holders have shown they do appreciate that central recognition. If they get a letter from the Prime Minister, they have a real touching appreciation, that letter is framed on the wall. Many organisations really appreciated the link to government.

  Q313  Mr Prentice: Finally, is there a difference in the way in which staff respond to the public when they are working for a government department where the customer has no choice? We all have to pay taxes, for example. We had the person from the Department of Work and Pensions here before us last week. Private sector organisations depend on the customer coming back. Is there is a difference in the way staff relate to the public in those two sets of circumstances?

  Mr Herdan: There can be, yes. It gives an additional challenge to people like myself in running an organisation in the public sector to make people recognise the importance of the customer. In the private sector you always have the threat the customer will go elsewhere and vote with their feet. Tesco is a bit easier to deal with because they have this mission to remain in business. In the public sector there is a danger your staff can relax and say "They have to come to us anyway so let's not worry about the level of service; we will just do the job." That gives an additional challenge to public sector managers to find ways to motivate their staff and to make them care about the customer. We have found in certain organisations the Charter Mark has been really valuable as one of those tools to drive up staff's awareness and interest in the customer.

  Q314  Chairman: How does choice and personalisation work in the Passport Service?

  Mr Herdan: In terms of choice, people can chose the channel by which they apply and the sort of service they seek to have, whether they want a faster service or a standard service. There is not a lot of choice: the product is the product. There are some minor variations in product with extra pages but essentially there is not a lot of choice. We compete the various private sector contracts that support us so we have some choice in terms of who provides services to us. We are currently competing the contact centre contract and the secure delivery contract. We have some choice about provider within the organisation but that is not what you meant.

  Q315  Chairman: Remind us, because it was an interesting story, here was an organisation that was a basket case in terms of customer service a few years ago and lost its Charter Mark. It has turned itself around, has it not? Can you tell us, in a nutshell, because it may have wider lessons, how that happened?

  Mr Herdan: When I came into the organisation in 1999, which was at the time of that crisis, my diagnosis of the situation, aided by the NAO who did a very fast and helpful investigation at the time, was that the balance had become distorted in favour of efficiency. The big focus had been to drive down costs and get the unit costs down. That was the big driver and customer service consequently was definitely much lower down the pecking order of importance, and security was not fantastic either. The big driver was to get the costs down. My reflection on that, and the Home Secretary at the time backed me, was that we had to correct the balance and get a better balance between security, customer service and efficiency. In order to drive up customer service, which particularly suffered in all of this, I instigated a big programme of improvement across a whole range of things which included introducing ideas of choice: a faster service if one pays for it; introducing appointments so that if you want to come and see us you do not have to queue for hours—we give you an appointment and you can come then; and outsourcing the call centres so we could handle the volume of calls because we were handling about four or five million calls a year and we could not cope with that internally as we did not have the right staffing profiles, management arrangements, none of that. A whole raft of different things were done in order to get that back. That required money so there had to be acceptance the passport fee would increase and it required a determination by the organisation that we would go for it. There had been a customer service drive before the crisis but it had not been centre stage. The organisation did have a Charter Mark but it was taken away. We then worked hard to get it back. We knew from our internal staff survey that it was a very big deal for staff when it was taken away. They were very upset by that and I was committed to getting it back, which we did after about 18 months, and we have continued from there. Nowadays we run on a balanced score card planning technique for all these different segments and this is a continuing balance. We have just been talking about the fraud issues and we are actually going to make the whole business of applying for a passport a bit more difficult by requiring people to come for an interview but that is a balance with the security provisions. Having decided to do that, it is then about designing the interview process so it is as customer friendly as it can be, which means not too far to travel, appointments, people treated properly when they arrive, so training staff to treat people as customers.

  Q316  Chairman: We have people in front of us who assure us that there is no trade-off between efficiency and customer service and you are saying the history of the Passport Service shows there was a huge trade-off.

  Mr Herdan: It is fundamental. We could not have done all the things we needed to do without funding and fundamentally the organisation was running with too few staff. When there were seasonal peaks and unexpected demand surges, which there were, and then changes in the IT system which degraded the productivity temporarily, it had no spare capacity whereas now we run with an organisation which for much of the year has more staff than it strictly needs to do the job if the demand forecasts are spot on, but by having the ability to finance ourselves adequately we can make sure there is capacity there to cope with unexpected demand to deal with the peak weeks, because it is a very seasonal business, and then find ways to reduce the staff in the low season.

  Q317  Chairman: I am not sure Mr Gershon will be terribly thrilled to hear all this.

  Mr Herdan: I do not think we have ever set ourselves up as being the very best model of efficiency. We do need to keep trying to improve our efficiency but there is that balance. The public expect a good service from us and they expect us to prevent all this fraud. There is that balancing act between the three and getting that balance right which is the constant challenge.

  Q318  Paul Rowen: Obviously we have government departments going through the Gershon process at the moment. Do you think there is a danger there will be a trade-off between customer service satisfaction and that end efficiency?

  Mr Herdan: There can be. I would say we must be careful always not to trim things too far particularly in the front line customer-facing activities. We have no problem with making the back office and support functions and administrative functions more efficient and we are trying to do that ourselves in our organisation. There is a lot of room to improve there without degrading the external customer experience but on the front line people are providing that customer service and if you cut their numbers too much there will be inevitable consequences unless there are things that can be done to automate. There are some things that we automate which used to be done manually so it not an automatic thing that you need more money to provide those customer services but there are trade-offs definitely.

  Q319  Paul Rowen: If those organisations have not got a Charter Mark, how are we going to know? We are going to know because of the number of complaints we get but does that not make the case that they all should have a Charter Mark or some means of measuring customer satisfaction?

  Mr Herdan: There should be strong encouragement for that and government departments, who are the sponsors of agencies who deliver many of these services, should certainly be asking why they have not got a Charter Mark and certainly should be expecting them to assess customer satisfaction and to report it. Most customer-facing organisations would have in their set of targets a customer satisfaction target and we certainly have that. The sponsoring departments, and those who monitor, regulate and audit them, should be making sure that customer satisfaction is measured rigorously. That is part of the theme of my report, not to let us allow reporting of customer satisfaction which is not actually genuine.



 
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