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7 Dec 2009 : Column 34

Dr. Vincent Cable (Twickenham) (LD): Much of the statement is uncontroversial and, indeed, blindingly obvious. Let me start with the efficiency savings. Is not there a basic problem with announced efficiency savings in Government? If they knew that there was inefficiency, why had not they dealt with it already? To what extent is this new?

Let me pick up on a particular item to clarify what the Government are doing. They say that they are cutting the consultancy budget by 50 per cent., but 50 per cent. of how much? What is their consultancy budget? There are estimates that it could be in the order of £20 billion. We discovered on Friday that they are paying more than £100 million a year for consultants who are advising on the bail-out of the banks alone, so what is the consultancy budget that is now being cut by half?

The Chief Secretary said that he is personally going to vet pay of more than £150,000 a year. He is going to be a very busy man. How many people in the public sector are paid more than £150,000 a year, whose salary he will vet personally? Are we talking about GPs and dentists, heads of quangos and the dozens of people in the BBC who are paid more than the Prime Minister? Whom does he mean and how many of them are there? Are we talking about hundreds or thousands of people?

The Chief Secretary also suggested that he will save lots of money by reducing the number of targets for, and the amount of, monitoring of local government. That is admirable, but I understand that the Government currently spend £1 billion to £1.5 billion on various audit bodies, notably the Audit Commission, in overseeing local government. How much of that budget will be saved and how many officials who are employed in overseeing local government will no longer be required? If he is genuine about restoring autonomy to local government, why does not he consider ideas such as giving them significantly greater freedom over the business rate system?

Let me make a specific point. The Chief Secretary says that the Government are to give away, free of charge, data from the Met Office and the Ordnance Survey. That sounds straightforward, but those organisations survive by selling data, so if they have to give their data away for free, how will they function as organisations, especially now that the Government plan to privatise them? How can the Government privatise organisations that do not have any income?

Mr. Byrne: I am grateful for the hon. Gentleman's welcome for at least some of these measures. I think that there is a direction of travel in some of the reforms that Liberal Democrat Members will welcome, not least the move towards greater freedom and flexibility for local authorities. When he has had time to study the report in some depth, I think that he will welcome some of the flexibilities that we have talked about. On Wednesday, my right hon. Friend the Chancellor will announce further measures, which attempt to bring a degree more freedom from the regime of inspection and performance setting that has helped to drive up service standards over the past 10 years. We will be able to retire some of that regime in the years to come, and there will be significant savings as a result. It is right that many of the relevant reductions in targets should wait until the next comprehensive spending review, so that the plans that are drawn up reflect the resources that are provided.

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The hon. Gentleman asked some specific questions that I will try to answer. First, he asked about consultancy bills. My goal is to save about £512 million from the consultancy bill by 2011-12, by reducing it by 50 per cent. He asked about pay, and I reiterate that we have asked Bill Cockburn, the chair of the Senior Salaries Review Body, to draw up proposals on how to bring greater transparency to the system of setting senior sector pay and how to make sure that value-for-money bodies such as the Audit Commission and others are given a greater role in scrutinising those offers. The simple answer is that I believe that too many people are paid more than £150,000, and my goal is to exert downward pressure. That is partly why I say that we should cut the costs of, for example, the senior civil service by 20 per cent. in the next couple of years.

On data, we must get the balance right. Organisations such as Ordnance Survey can make a great deal of money by supporting specialist engineering and mapping companies with high-quality data. Ordnance Survey runs one of the best-if not the best-mapping services in the world. When there are opportunities to make available information such as low-resolution maps or boundary data, the public should be able to get hold of it free of charge.

Mr. Graham Allen (Nottingham, North) (Lab): Does the Chief Secretary agree that some of the biggest public expenditure is on late intervention and is the cost of failure-of prisons, magistrates courts, welfare benefits and so on? Does he therefore accept my welcome to the green shoots in the Green Paper, including the social investment wholesale bank-perhaps we can tidy up the names-and the social impact bonds? Those constitute early intervention and are cheaper and much more efficient because they ensure that society benefits from the consequences of success, rather than suffering those of failure.

Mr. Byrne: May I put on the record my personal thanks to my hon. Friend for his work in not only championing new approaches to early intervention, but bringing pressure to bear on finding innovative forms of social finance? Social impact bonds appear in today's Command Paper partly because of his work in lobbying for such change. In my authority of Birmingham, we have found that investment in early years can produce savings later in life. I think that Birmingham city council found that for every pound invested in early years, something like £4 could be saved in the criminal justice system later. Sometimes, different agencies from those responsible for early intervention reap the rewards of such intervention. Social impact bonds are a new way of bringing some of the incentives back into line. It is therefore right to test them out.

Mr. Michael Fallon (Sevenoaks) (Con): The Prime Minister said this morning that in health, schools, policing and social services, there had been

Why were they allowed?

Mr. Byrne: The hon. Gentleman knows that in the British administration a great deal of flexibility is given to, for example, local authorities. That is why it is right
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to look hard now at not only what constitutes the right level of pay for senior executives in different parts of the public sector, but the legislative changes that may be required to enable Ministers, when necessary, to exert downward pressure. I do not think that such legislative power is currently available in some parts of our public life, such as universities, further education colleges or local councils, but we have asked Bill Cockburn and his advisers to tell us a little more about that.

Geraldine Smith (Morecambe and Lunesdale) (Lab): I am delighted that my right hon. Friend is looking to scrap or rationalise 123 quangos for starters-not before time. One chief executive of a quango told me that he was on £1,000 a day. That is disgraceful when there are public sector workers at the bottom who are paid £10,000 a year. We need to protect them and keep them in work to keep the economy going, and we need to ensure that we get rid of some of the fat cats.

Mr. Byrne: There are obviously some complicated parts of public administration in this country. For example, the health service is a big and important organisation, which spends somewhere north of £90 billion a year. We want first-class people running such organisations. However, in such times, it is incumbent on senior leaders in public life to show leadership on pay. The Government have therefore said to the pay review bodies that we expect a pay freeze for the senior civil service, and pay awards of no more than zero to 1 per cent. for civil servants more generally.

Justine Greening (Putney) (Con): The Chief Secretary has talked about reducing senior civil service costs by 20 per cent. by 2012-13. What has he planned for redundancy costs? Will redundancy be voluntary or involuntary?

Mr. Byrne: Obviously, we hope to achieve most of our cost savings through voluntary redundancy, natural wastage and so on, but I certainly cannot stand here today and rule out the possibility of compulsory redundancy. The hon. Lady will know that we introduced reforms last week to the compensation arrangements available to civil servants, which are projected to save something like half a billion pounds over the next couple of years.

Andrew Mackinlay (Thurrock) (Lab): The Chief Secretary will remember-and you will, too, Mr. Speaker-that about six weeks ago, I asked him about this crackpot proposal to privatise the Thurrock-Dartford crossing. I asked how it was going to be done and what his brief said, and he held up a blank sheet of paper. He will understand why I am irritated. What is the answer to my question of six weeks ago, and how is he going to do it, bearing in mind that tolling is only allowed under the European directive as a mechanism against congestion? It is not a cash register for the Treasury. How does he propose to sell this and offer the purchaser some return? I just do not understand it; it is crackpot-daft.

Mr. Byrne: I am grateful to my hon. Friend for that question.

Andrew Mackinlay: What is the answer?

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Mr. Byrne: The answer is that there is no European or other legal impediment to the proposal that we have introduced for the future of the Dartford crossing. My hon. Friend will know that it remains within the Government's power to regulate tolls on the crossing.

Sir Patrick Cormack (South Staffordshire) (Con): Will the Chief Secretary do me a very great favour? Will he read an account of Britain after 12 years of Labour rule written in plain, simple English, shorn of the jargon with which his statement was laden? It is "Bog-Standard Britain" by Mr. Quentin Letts.

Mr. Byrne: Sometimes I am forced to read the words of Quentin Letts, but I tend to avoid it when I can.

Andrew Miller (Ellesmere Port and Neston) (Lab): Will my right hon. Friend reflect on the exchange that took place earlier today about disability living allowance, and look at this as an opportunity to re-examine business processes and why we do things in a particular way? There are lots of areas in which we can make significant productivity gains by making delivery more customer-focused. DLA is a classic example, but the relationship between, for example the Department for Work and Pensions and housing benefit is another, and there are many others in which a more customer-focused approach would benefit not only the customer but the Treasury, too.

Mr. Byrne: My hon. Friend is right and, as I said, I am particularly grateful to Sir Michael Bichard and public servants across 65 local authorities and a number of constabularies and primary care trusts who are looking at how we can bring together the administrative services run by central and local government to eradicate exactly the kind of inefficiency to which my hon. Friend points. We will have more to say about how we take those findings forward in the Budget next year.

Stewart Hosie (Dundee, East) (SNP): I thank the Minister, both for the statement and for giving us early sight of it. Some of the measures are sensible, not least the ending of ring-fencing for council budgets. The Scottish Government have already done that. At its heart, though, this is £12 billion of additional cuts, some beginning next year, over and above the 10 years of austerity promised by Lord Mandelson. Given that even the CBI has argued that additional fiscal tightening should not take place until 2011-12, lest it risk a fragile recovery, what steps has the Minister taken to ensure that the cuts in the document do not lead to the weakening of recovery from recession?

Mr. Byrne: If we want to grow our economy in the years to come, we have to make sure that we have strong public services in this country that stand behind families who want to get on in life. The hon. Gentleman knows that if we want to raise standards in public services at the same time as halving our deficit, we must make sure that our economy grows and that we make the right decisions on public spending and on tax. That is a presentation that my right hon. Friend the Chancellor will make to the House on Wednesday, but the hon. Gentleman will surely admit that if we want to raise standards and investment in front-line services, it is right to look for inefficiencies that we can cut at the centre of government, and today's plan sets out a way to do that.

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Mr. Brian Jenkins (Tamworth) (Lab): I am very pleased that my right hon. Friend has decided to keep standards at the top of his agenda and to axe many of the targets and inspectorates that maintain those standards, but can he elaborate on how he expects consumers of monopoly suppliers who know no other standards to raise those standards? What role does he see for professional external scrutinisers in maintaining or raising standards?

Mr. Byrne: There are two ways in which we can exert greater popular pressure to push up standards in front-line services. The first thing that we can do is set out a range of guarantees to high-quality public services. That means, for example, the right to see a cancer specialist within two weeks if a specialist is worried that a patient has cancer, the right to a good local police team and the right to one-to-one tuition for a child who is falling behind at school. With those rights in place, it is much easier to judge whether public services are delivering for consumers. That is why, in today's Command Paper, we have set out steps to free up the kind of comparative information that allows people to see how services in their area are doing compared with others, and whether they are performing in a more efficient way than others.

Mr. Rob Wilson (Reading, East) (Con): Neither in the statement nor in the earlier urgent question has the Minister made it clear how much he will save on the NHS supercomputer. The NAO says that the Government have spent £3.6 billion already. Can he confirm that that figure from the NAO is accurate?

Mr. Byrne: I would need to check the date of the figure that was published by the NAO. The basic point is that, at a time when we are trying to drive standards up and the deficit down, in some parts of Government we will have to make difficult decisions about whether programmes that are in place are contributing enough to front-line care or whether they can be put off. There will often be difficult decisions. The decisions that we have set out in the Command Paper are difficult but doable.

Mr. Gordon Prentice (Pendle) (Lab): Will not the smarter state end up looking very stupid if we outsource, sell off or transfer to the private sector and then are ripped off down the line? Are there any functions from which the Government intend to withdraw entirely? Does my right hon. Friend worry, as I do, about the morale of those working in a public sector that is constantly denigrated and told that it is useless?

Mr. Byrne: I do not have quite the same apoplectic vision of public service reform as my hon. Friend. Sometimes there are efficiencies to be had through outsourcing certain services, particularly in finance, IT and so on. I make no apology for that. The prospectus that we set out this afternoon will be enthusiastically received by front-line public servants, not least because of its promise of greater freedom to innovate and do things in a different way locally.

Mr. Peter Bone (Wellingborough) (Con): I do not know whether the Chief Secretary has been watching too much of "Bargain Hunt", but it is clear that the Government are keen on selling off the family silver.
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His listed a raft of things that would be sold off, but he did not mention Urenco. Will that still be sold off?

Mr. Byrne: We will certainly explore options for commercialising our stakeholding in Urenco, yes.

Rob Marris (Wolverhampton, South-West) (Lab): I welcome my right hon. Friend's statement, but I urge him to go a little further in respect of quangos. He suggests saving only £500 million by abolishing or rationalising 123 of them. May I ask him to give me an early Christmas present-less quango for Marris?

Mr. Byrne: I think I can promise that. The final report from the review of arm's length bodies will be published at the Budget next year. The 123 arm's length bodies that I set out this afternoon are merely an interim step.

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Point of Order

4.29 pm

Mr. Philip Hammond (Runnymede and Weybridge) (Con): On a point of order, Mr. Speaker. During his remarks in response to me earlier, the Chief Secretary referred to the Opposition hiring certain former Government advisers to advise them. Would the right hon. Gentleman like to take this opportunity to make it clear that he understands that no money is changing hands in any of these transactions, and that anyone who has made the decision to advise the Opposition has done so because he believes that that is in the best interests of this country?

Mr. Speaker: The Chief Secretary may offer a brief reply if he wishes, but he is not under any obligation.

The Chief Secretary to the Treasury (Mr. Liam Byrne): I am happy to offer the clarification that that is my understanding. I spoke to Dr. Read last night and he made that point to me very clearly.

Mr. Speaker: I am grateful.

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Energy Bill

Second Reading

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