Examination of Witnesses (Questions 320-339)|
CBE, VANESSA HOWLISON,
9 FEBRUARY 2009
Q320 Mr Slaughter: We have difficulty
trying to get through your remit in a few Committee sittings.
Are you having similar difficulties getting through it? This is
the end of the first year of a much broader range of services
that must be scrutinised. What problems are you encountering with
the enhanced remit?
Christine Gilbert: To reflect
on the year, the benefits for users outweigh the difficulties
that we have encountered. I hope that you saw in the annual report
that we were managing to join things together in part B in a way
that we had not done before. Although the question is pointing
to our size, the four previous organisations were much bigger
than the new one. The new organisation allows a closer focus on
the whole experience of the child or learner as they progress.
The difficulty has come with taking a year to look at the structure
of the organisation. There will be fairly radical restructuring
in September. The informal consultation on that began at the end
of last September. It seems to take a long time to go through
the various stages of consultation. People are experiencing quite
a lot of dislocation because jobs are changing. There are a number
of temporary posts in Ofsted. Through the human resources processes,
people are slotted back into jobs that they left a year or 18
months ago. All those things are difficult. We must keep focusing
on the fact that we are planning and preparing for a much stronger
system. For me, that is what has been negative.
Q321 Mr Slaughter: I suppose that
that is to be expected. Any reorganisation will cause short-term
disruption. Obviously we are interested to hear about the positives.
However, I was thinking about how you are not just looking at
economies of scale, but are looking at things in a more cross-cutting
way. To compare it with setting up a children's services department,
often changes are designed to achieve a particular end, but throw
up unintended consequences. Can you see any potential pitfalls?
Christine Gilbert: I think that
the end goal is worth the difficulty. Change is always difficult,
and it is up to me and the staff you see before you to ensure
that it is managed as effectively as possible. That is the biggest
area that I would highlight. On the issue of expertise, we were
fortunate that people with expertise transferred from the different
organisations. In answer to the Chairman, I talked about the changes
that we are making in inspection. However, it's not one group
of inspectors from education that are changing the core system;
people with expertise are working on it. We transferred a number
of people over from the different organisations. The process is
particularly hard for staff who belonged to smaller organisations.
For example, the adult learning inspectorate had one base in Coventry
with quite a small number of people who felt a strong sense of
team. That is why it is really important that we build a new organisation
where they feel allegiance. A staff survey showed that they were
highly committed to the purpose, and they feel that they can do
better here than what they could achieve where they were previously.
Q322 Mr Slaughter: Can one aspectchild
protection, for examplebecome so dominant for a time that
it skews the whole orientation of the organisation?
Christine Gilbert: I do not think
so. Before the annual report was published in Novemberthe
Chairman will know this from previous yearsthe difficulty
always was getting anyone to focus on anything other than schools.
The former Ofsted was responsible for child care and early years,
and it did not really get a look-in. There was always the danger
of something dominating, but we have been trying hard to make
sure that that does not happen. Certainly, this annual report
resulted in a focus on child protection that we thought was well
deserved. There is one thing that is important for us to do. The
annual report attracts a lot of publicity, but we have to find
different ways of doing this at different parts of the year, to
publish different things about different areas of work. For instance,
no questions were generated at annual report time nor since about
learning and skills, yet a number of important things are going
on in that area. We have to try to shape the agenda in that way,
Q323 Mr Slaughter: We can make
our own judgment based on what you tell us here, based on the
annual report. One way we will judge whether we think you are
doing your job is by looking at your reports on individual local
authorities, say, through the annual performance assessments.
I know from experience that you are reluctant to release to third
parties the information that goes into those assessments, on the
grounds that it makes your job easier. This may have come up at
your previous session, when I was not present, unfortunately.
It makes your job more difficult if you do not have a confidential
relationship with the people you are talking to at a local authority.
That is all right up to a point if you are talking about individual
members of staff, but do you not think that, either through freedom
of information or just generally, the documentation that passes
between you and local authorities should be available to Members
of Parliament and other interested people?
Christine Gilbert: I am not sure
exactly what you mean. The information linked to the annual performance
assessments is available. If people ask for more detailas
the Birmingham MPs did a couple of weeks agowe give it
to them. If you mean the serious case reviews, that is a different
issue but the information relating to annual performance assessments
Q324 Mr Slaughter: Any background
documentation that is referred to in your annual letter would
be available? That is not my experience.
Christine Gilbert: The issue with
the serious case reviews is different. That is not within our
gift. Government decide that the full serious case review should
not be released. A number of inspectors who deal with that and
I sympathise with that viewpoint. They are worried that if the
information were published it could compromise other family members
and so on. The executive summary is released, but none of that
is up to Ofstedwe merely work within the rules. We look
at the serious case reviews and make our evaluation, and a number
of authorities put the evaluation on the web. I do not know whether
there is something else that you are suggesting.
Q325 Mr Slaughter: I am thinking
of a specific instance of a college where I am chair of the governors.
It asked for information underlying the APA and got a longer letter
back explaining why none of it could it be released other than
the APA letter itself, which I did not find very helpful. This
may be something I need to pursue. I mean things such as evidence
notebooks, draft letters and discussions with the local authority
that go on before the final letter is produced.
Christine Gilbert: I think that
I may be missing something here. Chairman, could I ask Miriam
to come in, in case she knows something I am not sure about?
Miriam Rosen: With regard to APA,
the data that we use are publicly available. We do not normally
release the evidence notebooks in which the inspectors write their
contemporaneous notes when they are talking to people for any
of our inspections. They are not given out, because there is a
confidentiality element in the discussions. That evidence is all
synthesised and goes into the reports.
Q326 Mr Slaughter: This is an
important point. I have had exactly the same problem with the
Audit Commission on CPAs and things of that nature. What generally
comes out is the sanitised version of the discussion between the
auditing body and the local authority. What is of interest to
interested parties is what is discussed at an earlier stage. You
can anonymise who said what to you so that it is unattributable,
but I do not see why the data of those discussions should not
be in the public realm, certainly under the Freedom of Information
Christine Gilbert: Perhaps I can
pursue this outside the meeting. In the example I gave of the
meeting with Roger and the Birmingham MPs, the MPs had a copy
of the APA and wanted further detail about an aspect of it. We
went away; we found more details; and we wrote a letter with more
details. It might be something particular that we cannot give
you information about, in which case I will say so, but I am happy
to pursue this outside the meeting.
Chairman: Are you happy with that, Andy?
Q327 Mr Slaughter: I understand
that people may wish to tell you things in confidence or you may
not wish to reveal what individual officers have said to you.
That is a separate issue. But usually draft letters or reports
are produced, are they not, which are then the subject of discussion
and negotiation with a local authority or whoever, which leads
to a final letter? Normally I would have thought, certainly under
the Freedom of Information Act procedures, it would be possible
to obtain the background information, such as e-mails, letters,
drafts that have gone before that. That is the general rule. I
am not talking about specific cases here.
Christine Gilbert: We used to
send the draft APA letter to every local authority and give them
about a fortnight to comment on it, but most people would have
discussed that quite widely in the authority.
Q328 Mr Slaughter: You would be
surprised. Perhaps I need to write to you about that again. You
seem to be saying that you do not see that there is any barrier.
Provided that confidentiality in relation to individuals is protected,
you do not see any barrier to your negotiations, discussions,
correspondence with a local authority being made public.
Christine Gilbert: No, I do not.
Unless there is something that I am missing here, I would not.
I would be surprised if those letters were not FOI-able.
Mr Slaughter: So that is okay, according
Chairman: You were going to seek some
Mr Slaughter: I think I have exhausted
my time. What is said on paper by Ofsted contradicts what the
chief executive is now telling me. It is probably better that
I take it up separately.
Chairman: Douglas, did you want to come
Mr Carswell: I wanted to come in on finance.
Chairman: Andy, do you want one last
Q329 Mr Slaughter: I want to go
back to what Miriam was saying a moment ago about evidence notebooks.
This is the collection stage. This is the nitty-gritty of inspection.
I understand that there may be other things, but this seems to
form the background to any draft notices or draft report before
the final report. If people see references in the final letter
to these documents, they may wish to see them, if they have a
legitimate interest in the case. Why would they not be disclosable,
either voluntarily or under the Freedom of Information Act?
Miriam Rosen: One problem is that
we feel that if we were to disclose the records of conversations
with people, they would not necessarily be quite so frank with
us, so we have been reluctant to release those from the beginning.
It is the same for other types of inspections as well.
Q330 Mr Slaughter: That is a good
reason for not having a Freedom of Information Act. It does not
seem to agree with what the Chief Inspector has just said to me.
Miriam Rosen: It is important
that Ofsted can collect information that is then synthesised into
a report. It is important that nothing interferes with the free
giving of information to Ofsted.
Mr Slaughter: I am none the wiser, but
I think I will leave it there.
Chairman: We will hold that and wait
until we get some more information through a different channel.
Let us move on to expenditure.
Q331 Mr Chaytor: Chief Inspector,
in terms of the Ofsted budget, I just want to clarify that this
year you were required to reduce it by 30% compared with the 2003-04
budget. Will that target be met?
Christine Gilbert: Yes. What we
have been required to do through the Better Regulation Executive
is to reduce the budget from the base year of 2003-04 by £80
million. What we have done with the agreement of the Department
for Children, Schools and FamiliesI think we mentioned
it here two meetings agois reduce it by two thirds, to
just under £60 million. I think Vanessa will be happy to
talk about the detail of that if you would like, but we have done
what we said we would do and taken a substantial reduction through
the merger and our work in reducing back-office costs and so on.
Q332 Chairman: Vanessa, you are
a ruthless cost cutter.
Vanessa Howlison: Ofsted has been
on a downward trajectory in terms of its cost since 2005-06, well
before the target was in actual fact set for us. The target as
it is written will take Ofsted from its 2003-04 positionhad
it existed in this form at the timewhich was £266
million, down by 30% by 2008-09 to £186 million. That headline
date that was originally given as our target, but we have been
liaising and engaging with the Better Regulation Executive to
ensure that we bring our cost down by the amount to which we committed
in a way that is safe and can be done without endangering Ofsted's
business. An important date for us is September 2009, because
a number of things will happen then that will enable us to take
a sharp drop in our costs. Our outsourced inspection contracts
will come to an end at that date, and we are in the process of
retendering those and we expect to see a significant saving as
a result. Also, our inspection frameworks will come to an end
in September 2009, which is when we intend to bring in a number
of other changes that will reduce our costs. Finally, we are reducing
the size of our London office and our lease expires in September
2009, so again at that date we will be able to take a step-down
in our costs. That is why we have made sure that every step of
the way, we have engaged with the Better Regulation Executive
to ensure that it is clear on the trajectory of our cost reductions,
and I am very comfortable that we have achieved them.
Q333 Mr Chaytor: The Departmental
Report for 2007-08 clearly states that Ofsted will achieve the
target 30% reduction, so things have changed since the publication
of that report as the reality, or severity, of that reduction
has been recognised. Is that the case?
Vanessa Howlison: It is a severe
reduction, because the headline is to reduce by 30% from £266
million. But if you take inflation from 2003-04, and add that
to the size of our savingsChristine is right that the headline
is to reduce by £80 millionit is actually a £120
million saving that we are looking at, which is 42% in real terms.
It is a really significant saving, and I think we have made really
good progress to date in achieving it and we have a lot more planned
for 2009-10. We have just set our budget for 2009-10, and we have
pulled another £20 million out of our cost baseline for that
Q334 Mr Chaytor: What is the actual
percentage reduction on the 2003-04 baseline?
Vanessa Howlison: To date?
Mr Chaytor: By the end of the current
Vanessa Howlison: If you are adding
the impact of inflation, we have done two thirds of the savings.
By the end of the next financial year, we will have done 80% and
there is a small amount that we have yet to deliver.
Q335 Mr Chaytor: That is two thirds
of the savings you were required to make. The percentage cost
reduction on the 2003-04 baseline was originally going to be 30%.
You are £20 million short of that, so, in percentage terms,
what is the reduction on the 2003-04 baseline?
Vanessa Howlison: That depends
on which way you want to look at it. If you take inflation out
of the equation, we have an £80 million saving to make. By
2008-09, we will have achieved £40 million of that £80
million. In 2009-10, we will have achieved £60 million of
the £80 million, but if you factor in inflation, the saving
that we will have achieved is more significant than that in percentage
Q336 Mr Chaytor: I just want a
simple percentage figure, leaving inflation to one side. If you
have saved 60 as against 80, what is the percentage saving, if
it is not 30%? It is obviously less than 30%.
Vanessa Howlison: It is 15% in
2008-09. We have a savings plan to bring our costs down over the
next two financial years, but we have also invested some money
to help us to achieve that saving. That is one of the reasons
why the costs in the current financial year are a little bit higher
than you might expectnot just because of investment in
systems, but because we need to reduce our staff numbers, so we
are incurring some staff-related costs this year.
Q337 Mr Chaytor: Which areas of
the organisation have taken the biggest share of the reduction?
Vanessa Howlison: It has come
from a range of areas. If you remember, the base year is 2003-04
and wenot only the current Ofsted, but its predecessor
organisationshave been reducing our costs and trajectory
for several years beforehand. Since the new Ofsted was formed,
one of the biggest savings has come from the back office. Our
budget, set for 2009-10, includes a £7.2 million reduction
on back office costs, corporate services and finance. That is
a significant element. We have also made productivity savings,
and savings from introducing single inspection events and parallel
inspection events, thus delivering on the promise of the new Ofsted.
You can see that it has come from a range of areas. It has also
come from a careful use of proportionality.
Q338 Mr Chaytor: What does that
Vanessa Howlison: It means making
sure that our inspections are proportionate to risk, and making
sure that we put more resources into those areas where we think
they can have more effect.
Q339 Mr Chaytor: Can I ask about
back-office reductions? There are two sets of figures and I am
not sure how they can be reconciled. We have a chart from the
Departmental Report that suggests that, this year, the administrative
budget is 16% of the total budget, which will reduce to 14% in
2009-10, and it will be 14% in 2010-11. There is also a chart
that says that the overall corporate administrative functions
make up 18.3% of the costs. What is the difference between the
administration budget and the corporate administrative functions
Vanessa Howlison: It is difficult
to relate our administration budget directly to what we consider
to be the cost of our corporate and support services. For example,
some of the costs, which are included in our corporate services
cost, are the cost of our contact centre, our national business
unit and our research and analysis division. Those costs are more
related to the delivery of front-line service, so there is a mismatch
between what is charged to our administration budget, in Treasury
terms, and how we actually captureand account for internallythe
cost of our corporate services, which we believe in some respects