Examination of Witnesses (Questions 1-19)
DAVID BELL
AND JON
THOMPSON
25 JUNE 2008
Q1 Chairman: I welcome David Bell, the
Permanent Secretary to the Department, and Jon Thompson, who is
Director General of Corporate Services there. It is very nice
to see you both again. We are looking forward to a good, robust
session this morning. This is a session that we hold every year
in respect of our scrutiny role—it is about the money, as
you know—so let us get started. We usually give you the
opportunity to say a few words to open the proceedings.
David Bell: Thank
you very much, Mr Chairman. Good morning, ladies and gentlemen.
This Saturday marks the first anniversary of the Department for
Children, Schools and Families. It is quite hard to believe that
a year has gone by, with so much having happened in the past 12
months. From my perspective, it has been one of the most interesting
and exciting periods of my professional life. Despite the potential
for considerable upheaval, I think we can look back and say that
we hardly missed a beat in setting up the new Department. That
put us in a really good position to support the ambition of the
Secretary of State and his Ministers to make this the best place
in the world for children and young people to grow up. Like any
good organisation, we set out our stall early, with the publication
of the Children's Plan in December. You have already taken quite
a close interest in the Children's Plan, having questioned and
quizzed the Secretary of State. That is a 10 year plan to improve
the lives of children and young people everywhere, and to provide
the best possible support to families across the country. We are
already vigorously into the implementation phase, in areas as
diverse as setting up the new Qualifications Regulator and establishing
the new—and we think quite innovative—funding streams
for issues like play and positive activities for young people.
We are also keen to continue to support disabled youngsters and
their families. These are some examples of what we are doing under
the Children's Plan. I am sure the Committee will want to question
us on many aspects of the Department's policy, and we have already
welcomed your close interest in our work and your very helpful
first report, which provided some useful pointers to us as we
move forward, not least in our new areas of shared responsibilities
such as juvenile justice, child poverty and so on. This Departmental
Report covers the work of both the Department for Education and
Skills and the DCSF, but in no sense is that problematic, because
there are very important continuities in policy in areas such
as child care, children's centres, raising school standards, reforming
qualifications, and promoting diversity and choice. In addition,
I believe we have continued to manage our resources extremely
well with our efficiency plans for spending review 2004 on target.
Our budget, planning and performance management arrangements are
very well regarded across Government. In all of this, I would
like to pay tribute to my colleague Jon Thompson, who I should
say has recently been appointed head of the financial management,
or accountancy profession, across Government, so he is now the
head of profession. This is a very significant honour, although
I am relieved to say that Jon will combine these responsibilities
with his work for our Department. We have made considerable progress
not just in the past 12 months, but in recent years. This has
been in areas ranging from the number of children's centres open
to results showing that many more young people are achieving well
at school at age 16 and 19. But—and this is an important
but—that is against the backdrop of very considerable ambition
and demanding targets, laid out most recently under the public
service agreement scheme and the spending review 2007. Therefore,
our efforts have to be focused on all the next steps. Finally,
Mr Chairman, I hope you will allow me a moment of indulgence to
pay tribute to the staff of our Department, who have been tremendous
this year. They have risen substantially to the demands of the
new Department, and a recent staff survey showed the very high
engagement of our staff. So we are pleased and encouraged that
staff are still committed to the mission of our Department. That
kind of passion and professionalism on the part of the civil service
makes me proud to lead this Department as the Permanent Secretary.
Q2 Chairman: Does "engagement"
mean satisfaction?
David Bell: There is a high degree
of satisfaction across a number of areas. One statistic is that
82% of the staff said they had a very clear understanding of the
Department's aims and objectives, and a similarly high percentage
said that they understood how their work contributed to achieving
the ends of the Department. The other thing is that 82% of the
staff participated in the staff survey, which is, across all organisations,
a very high return rate. I am an optimist, as you know. I see
that as a sign of great engagement. They want us to see what they
think, and believe that we will act on it.
Q3 Chairman: Thank you, Permanent
Secretary. It is just that, as a former social scientist, I wondered
what question you asked to find out that people were truly engaged,
but we will discuss that another day. I have to start on a slightly
discordant note. We were not that impressed that we had a response
to our most recent report on the Children's Plan only at 7.20
pm last night. It was rather late for us to read it, let alone
absorb it. The Clerk received it at 7.20 pm. Perhaps you think
that is good, and shows that the Department was working at 7.20
pm, but we received it too late for it to be useful this morning.
We have read it now.
David Bell: Indeed. I believe
you will have an opportunity to question the Secretary of State
next month, and I am sure you will want to take up the content
of that response with him.
Q4 Chairman: We are aware of that,
but for this meeting it could have been a little earlier. To open
up, we have had seven good years in terms of expenditure on education.
All the signs are that expenditure is now tailing off and falling
behind the health commitment. That is disappointing for someone
who was in the education sector, is it not?
David Bell: As you said, we have
had very substantial increases in funding since the turn of the
century. It is worth pointing out that the education and children's
services settlement that was announced under spending review 2007
was still better than that achieved elsewhere in Government. I
therefore think we should recognise that there is still a substantial
commitment to education and children's services. It is entirely
right, however, that we expect and ask all sectors, including
schools and local government, to think very carefully about how
best to use the money. I do not need to remind you, Mr Chairman,
of the broader financial and economic context in which we operate.
For that reason, we were still pleased to secure the settlement
we did.
Q5 Chairman: What I am pointing out
is that the Government were elected three times on the manifesto
of "education, education, education", not "health,
health, health". One might have expected education spending
at least to keep pace with health spending.
David Bell: But there have been
very substantial increases, as you know. The per pupil uplift
since 1997 has been almost 88%. The overall uplift has been 67%
in that period. It is unusual to go to schools and hear people
say, "We have not had enough money over the last decade."
People are now managing new circumstances. We do not underestimate
those circumstances, but it is worth repeating that the settlement
was a very generous one in the context of the wider fiscal position.
Q6 Chairman: You have been coming
before this Committee for quite a long time, both in your previous
roles as Permanent Secretary of the previous Department and, before
that, as Chief Inspector. Is it your view that the taxpayers'
money spent on education has yielded what you anticipated it would
yield?
David Bell: Yes, I do believe
that, because there have been significant improvements right across
the piece. We know now that record levels of youngsters are achieving
what they should be achieving at the end of primary school. We
know that the highest percentage ever of youngsters is achieving
five-plus A to C grades at GCSE. We know the achievement at age
19 and so on. What nobody would argue is that we have, by any
stretch of the imagination, finished the job. As the improvements
have been seen across the system, some young people and families
have not benefited in the same way. That is why the Department
has redoubled its efforts to try to ensure that everybody benefits
from all the investment that has gone in. One of the advantages
of the new Department is that we are able to make links between
what happens in school, vital as that is, with other services
that enable young people, children and families to succeed. Although
many youngsters achieve well at school, they are often unable
to achieve as much as they might because of family pressures or
other circumstances. Going forward, we are trying to enable schools
to focus on the key core job of teaching, and teaching well, but
enabling head teachers, teachers and others to draw upon all the
other services that will help children and families thrive. It
seems to me that we have made very, very substantial progress
in recent years, but of course there is more to do.
Q7 Chairman: I do not know if you
ever have conversations with Chris Humphries, the chief executive
of the Commission for Employment and Skills.
David Bell: Not in his new role,
Mr Chairman, but I have spoken to him previously.
Q8 Chairman: He said only yesterday
that we are still not delivering the appropriate education to
unlock the talents of 50% of young people going through the educational
system. He further said that educational productivity is a real
concern in this country. If the money is being spent wisely, why
is it that Chris Humphries can say that 50% of kids are still
not getting a fair crack at education, and why is the educational
service on international scales—not on anything dreamed
up in this country, but on international measures—still
not rated highly in terms of productivity?
David Bell: Let me ask Jon to
touch on the productivity point. If you take the measure of the
percentage of young people who achieve five good GCSEs, including
English and maths—that, I suspect, is the reference that
you are making—we know that we have to do better and more
in that regard. Those English and mathematics qualifications are
a really important first step—next step—to moving
on through the educational system. It is quite interesting that
when we look at the qualifications attained by young people by
the time they reach 19, we see quite substantial improvements
there. We would all be nervous about suggesting that just because
youngsters have not achieved English and maths as part of the
five good GCSEs they are somehow complete failures. That is certainly
not the case. But it is the case that ensuring that more and more
youngsters achieve that important benchmark is significant. That
is why we have tried to broaden the range of opportunities and
qualifications going forward. It is not just about those youngsters
doing the traditional qualifications and skills, but trying to
expand very substantially the apprenticeships programmes, which
you will be aware of, and also trying to think about how new qualifications
such as the diplomas will play into that. I would not want you,
Mr Chairman, to think that we are at all complacent, but equally
I would want the Committee to recognise very substantial improvements.
Perhaps Jon would like to touch on productivity?
Chairman: Before Jon comes in, let me
say that it is very good to have you here. You have been before
the Committee in different guises before, Jon. About four or five
years ago you were running—Chief Financial Officer—North
Somerset Unitary Authority.
Jon Thompson: Indeed.
Q9 Chairman: Now you seem to be running
the country. You must be congratulated on this progress. I see
you have an added job right across Government. How on earth can
you do the complex job that you have in DCSF and all that stuff
right across every Department in the country?
Jon Thompson: I have to balance
my time extremely well. It is fairly demanding. What the Treasury
wanted, in terms of a leading financial professional, was a practitioner—someone
who had been and was a finance director—rather than someone
from the Treasury.
Q10 Chairman: They want someone who
really knows about money, rather than all the rest of the people
in the Treasury, who obviously do not.
Jon Thompson: You will have to
ask that question of their Permanent Secretary.
Q11 Chairman: What expertise do you
have that the Treasury does not have?
Jon Thompson: My role is not about
running the overall finances of the Government. We have to be
very clear about that.
Chairman: We understand that.
Jon Thompson: My role is only
about leading the finance community, in which there are 11,000
finance professionals—thinking about their training and
development, what standards they apply and so on. The role of
overall finance to the Government remains within the Treasury.
What was a previous role has been split into two, and I have taken
the finance community role.
Q12 Chairman: Is it seen as a Gershon
saving—one man doing lots of jobs?
Jon Thompson: Indeed.
Q13 Chairman: Let us deal with productivity
in education, across the sector.
Jon Thompson: I think that your
Committee was looking for some further work on productivity around
January of last year.
Q14 Chairman: Last year you said
that you were not so interested in productivity.
Jon Thompson: I was going to say
that the Office for National Statistics responded with a report
on productivity in the education sector last autumn, which concluded,
it is fair to say, that the inputs have resulted in significant
increases in outputs, but that overall productivity had risen
only marginally in the 10 year period—a huge increase in
inputs and a huge increase in outputs, but when you put those
two together, productivity had marginally risen in the 10 years.
So there was a report into that area.
Q15 Chairman: Last year you told
me that productivity was not so much of a concern, but cost-benefit
analysis was. Now we are back talking about productivity. Are
you switching from year to year just to confuse the Committee?
Jon Thompson: No, I am not. You
rightly asked us about productivity and our report, produced by
the Office for National Statistics, tried to respond to some of
your questions about whether productivity could be measured and
how that could be done.
David Bell: I think that it is
also worth pointing out, Mr Chairman, that the Office for National
Statistics and its work recognise the complexities of measuring
productivity in public services such as education and health.
It is not a straightforward task and you have to look at a range
of measures. It is not just me saying it—that is what the
ONS will tell you about the productivity measures. We would say
that you should use a variety of measures, both national and international.
We have seen movement, sometimes in the right direction, but sometimes
slipping back against the international measures. It is a complicated
area, but let us not lose sight of the thousands and thousands
more young people who are achieving qualifications that they would
never have achieved previously, and of the huge investment across
all aspects of education and children's services.
Q16 Chairman: No one denies that,
but we have to live with international comparisons done by a range
of international organisations—usually well trusted—that
suggest that we have slipped back over the past 20 years, not
moved forward.
David Bell: Well, I seem to recall
that we discussed that quite a bit in January when we had the
session with the Secretary of State, based on the publication
of the OECD measures. In some of those measures we remain strongly
placed and in others we were slipping back. There were, as you
well know, some important questions about methodology, but, at
our end, nobody disputed that we have to keep our performance
moving and to keep it up. All nations across the world, particularly
the developed nations, are recognising that the extent to which
you are able to have a highly educated and highly qualified workforce
indicates your chance of continuing economic success, as well
as social cohesion.
Mr Stuart: Very quickly, Mr Chairman,
may I come in?
Q17 Chairman: I just want to leave
one thing with the Permanent Secretary. Do you and Jon think that
it is more difficult to attain productivity increases and improvements
when there is plenty of money around? According to a figure that
I have in front of me, there was a fall in productivity between
2000 and 2007 of 0.7% every year.
David Bell: Again, it is interesting
that one of the measures used is the number of staff who are supporting
children, or the number of staff who are employed in a school,
against the output measure. We know, for example, that since 2000
there has been a very substantial increase in non-teaching support
staff to help youngsters. It only reinforces the ONS's point that
it is difficult to get an absolute measure; you cannot find a
single number. You can quote the number that you quoted, and it
is fair that the ONS quoted it, but whether it captures the complexity
of all the measures that you are trying to assess in looking at
improvement is—I think—a more open question. That
is why we need to continue, with the ONS, to ask the question
about productivity. As to whether it is harder to generate productivity
when you have more investment, interestingly, Jon and I had experience
of the local government world in the `90s, when it felt as if
you always managed budgets down and you had to become very sharp
and smart in how you did that. We need to keep that focus on efficiency
that we have had in previous years. It is not something new, but
it will become even more important to get the maximum benefit
from all the spending that we are putting in, particularly as
circumstances tighten.
Chairman: Now that we have drilled that
down, David is going to ask the questions.
Q18 Mr Chaytor: Every year the Departmental
Report seems to get bigger and more complex and the information
is arranged in different ways. However, this year we have six
departmental strategic objectives, but the analysis of spending
does not relate in any way to the objectives. Is there a reason
for that? Is it impossible or would it be possible in future years
to show a closer relationship between the allocation of the budget
and the strategic objectives?
Jon Thompson: It certainly would
be possible to produce an analysis of the £168 billion which
the Department has available in the public spending review period
against the six departmental strategic objectives on page 10.
That is not included in the report but we can produce that. It
would then cover the totality of the forward spending plan.
Q19 Mr Chaytor: You say that you
can produce that. Could you do so now or are you saying that that
could be a way of presenting it in next year's report?
Jon Thompson: It is available
within the Department. We can usually provide it to the Committee,
if you wish.
David Bell: It is partly a matter
of form that the structure of the report is as it is. The Chairman
quite rightly expressed some concerns last year that we had altered
the form. We have got ourselves into a better position through
consultations outside the Committee, but we are doing exactly
the analysis that Jon describes. We can make that available. Perhaps
it would be worth discussing outside the Committee whether the
format of the Departmental Report could evolve in that way. I
confess that I am never quite sure how much it is laid down that
information should be provided in a certain format, style and
structure. That would not prevent us doing what you have asked
for, Mr Chaytor. It is quite a long report, as you point out.
We would probably want, if we can, to trade off some new information
and take some other information out.[1]
1 See Ev 21 Back
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