Defra departmental Annual Report and Estimates - Environment, Food and Rural Affairs Committee Contents


Examination of Witnesses (Question Numbers 60-79)

DAME HELEN GHOSH DCB, MR MIKE ANDERSON AND MS ANNE MARIE MILLAR

11 NOVEMBER 2009

  Q60  Paddy Tipping: So what signals are you getting? There are reports that you will be asked to make further savings.

  Dame Helen Ghosh: Well, under one of our most talented young colleagues, we have launched a programme within the Department both for the Public Value Programme, which is essentially looking at our spending programmes, the Operational Efficiency Programme, which is broadly described as `back office', but it is everything from procurement to shared services and so on, and the Arm's-Length Body Programme, which is what does our delivery landscape look like, are there too many people, too few people. In fact, with a department like ours, all those things line up very closely together, so, if you take how you deal with flood defence, that is a spending programme, but it is also an efficiency issue in terms of the Environment Agency and ourselves, and it is also something about the relationship with an arm's-length body. We were one of the first departments to get into action on that, and I imagine it is the case that the Chancellor will want to give sort of preliminary indications about what kinds of findings are coming out of that and some of the first kinds of savings that might be found. Again not to blow our own trumpet, but I think that is what I am here to do, I think we were probably the very first Department to send our return into the Treasury in response to an early exercise because we knew where we were and we had set it up. Clearly, in terms of our programmes, a lot of our big spending is what you would call `licence to operate', so flood defences, animal health, in particular, and our science programmes and so on, so we have constantly to hit that balance between getting more efficiency out of the money that we spend and to what extent you can reduce the budgets further. I think on the Operational Efficiency Programme there is a published target, which is what we are working to, that all departments should find between 20 and 25 per cent of their so-called `back office' based on 2007-08 by 2013-14, so that is what we are working to there, and again I imagine the Chancellor will want to say a bit about how people might do that.

  Q61  Paddy Tipping: But you can only make efficiency savings for so long. Ultimately, it gets harder and harder and you have got to look at spending programmes. What reassurance can you give to us about spending programmes, that they will be cut?

  Dame Helen Ghosh: I do not think I can give you any more assurance than the Government has given, which is that, clearly, the first thing to do is to look at how you can get more for the money you have got, but the Prime Minister himself, in his well-covered speech about cuts, made the point that you might have to stop doing lower-value programmes, which ultimately of course is a question of judgment and support both publicly and politically, so clearly, as part of our work, we will be looking at whether we can identify those things that are lower-value programmes. Again, as I think I have discussed with the Committee before, we have difficulty doing that in the sense that, sadly, we do not have programmes which spend a lot of money which do not relate very closely to our strategic outcomes or have `licence to operate' implications, so there are not easy pickings, which is why efficiency and getting more for our money is where we need to look to first.

  Mr Anderson: It is also the value question, with all these acronyms that are going around, but actually the real issue is the value of the programmes that we produce. We do have a real understanding of how our programmes and our money track together now, and that has happened in the last period since the Permanent Secretary has reorganised, and what we really want to merge in the next few months is that full list of prioritisation and understanding of the value, that, if you put more money in here, you will get more result out here and, if you take it away, you are going to damage to a degree so that, when we go to ministers, we have that full list of options, depending on whatever the Treasury say to us at the time they say to us, "Right guys, this is what we have. This is what you're going to get", and that, I think, will ultimately answer your question. There will come a moment though when we will have to stop something and we need to be in a clear position to explain why we are saying that that is the least value.

  Q62  Chairman: Just to be absolutely clear, on page 138 of the Report you have identified towards the £75 million about £35½ million worth of savings already, but is the next stage of finding the other £35 million the process you have just described, in other words, some programmes are going to go, or are they focused on better value for money in other aspects of the way that your Department is run?

  Dame Helen Ghosh: The narrative on this is extremely complicated because things come out sequentially.

  Q63  Chairman: Well, make it simple for our readers please.

  Dame Helen Ghosh: The £75 million that you are quoting was an amount quoted by the Chancellor in the Budget this year where he said—

  Q64  Chairman: Well, I am only quoting from page 137 of your Report. You have written it down. It says here, "Looking ahead, Defra and its delivery bodies will be working together to identify and deliver the additional £75 million of efficiencies required by 2010-11, confirmed in the Budget".

  Dame Helen Ghosh: Sorry, the narrative is what I am trying to tell you. That is money we have simply taken out of our budget for 2010-11, it is done, we have taken it out of the budget. The process I have just described, and we know something across the Department and the agencies of what the impact of that is, but we do not yet know, because actually we are however many months we are away from 2010-11, exactly how—

  Q65  Chairman: Not long.

  Dame Helen Ghosh: Not long, but all of our bodies, back to the list we gave in the additional information, are working out how to deliver as many of their outcomes for that money. The exercise that Mike describes, the Public Value Programme, is looking at programmes to 2013-14. It is not a CSR, but effectively it is saying, "If you look beyond at 2011-12, 2012-13 and 2013-14, how can you reduce your spending?" All departments have been asked to look at the 50 per cent by value of their programmes for that period and to show how they can reduce or make more efficient, or whatever the outcome is, their spending for those three years, not 2010-11, so £75 million is 2010-11 and PVP is beyond 2010-11.

  Q66  Chairman: Let me ask a question about how you monitor it because at the end of the day you are a service department and you deliver services to a broad range of customers.

  Dame Helen Ghosh: Yes.

  Q67  Chairman: When you reduce the expenditure, for example, you talk here about £17 million being saved on TSE[23] surveillance, okay, fine, but who is tasked to monitor that you are not actually underachieving in terms of appropriate practices to provide the protection at the same level as it is today, but costing less to deliver? Who is tasked with the quality control of the reduced expenditure, but holding delivery quality constant?

  Dame Helen Ghosh: Well, in that case, there is a demand-side issue as well as an affordability issue. It has been clear, as with TSE and all the research we have paid for at VLA[24] and elsewhere and the incidence in livestock, that, if the incidence of TSE is declining, then you need to do less surveillance. We will take those judgments on the basis of the best possible scientific advice that we get and, as you will know, I think, from your previous lives, we have very distinguished scientific groups on things like spongiform encephalopathy to tell us what surveillance they think we should do, so we reduce the surveillance in line with the best scientific evidence that we can get and that is how we test that.

  Q68 Chairman: Did it not occur to you, when you see that you can make savings of this order, how, relatively speaking, inefficiently the Department was run before?

  Dame Helen Ghosh: That is not a saving that is anything to do with efficiency or inefficiency, it is what we choose to do.

  Q69  Chairman: But there are other things where you are doing things in a different way. How radically are you starting to limber up? For example, over the debacle of the RPA, I heard somebody irreverently suggest that, for example, Natural England paid money out of environmental schemes, so, if they do it, why can they not take over the RPA? Why do you not bang it all together? How revolutionary are you going to be? You have got lots of outposts doing similar things.

  Dame Helen Ghosh: The exercise that I described, the arm's-length body exercise, will look at precisely those sorts of issues. We do constantly look at our delivery landscape, and Hampton made us do that in terms of where our inspectorates are. It is easy to be quite simplistic though, that X pays money out, so it is obvious that they should pay money out. Actually, if you look at the staff in Natural England and the expertise in Natural England, it is predominantly people who understand biodiversity, can give farmers face-to-face and excellent advice on environmental stewardship schemes, but actually a lot of what the RPA does is a payment operation, having done complex calculations within a complex scheme, so, in that sense, it is probably closer to complex social security benefit administration than it is to Natural England, but we will be looking at precisely those sorts of issues. If I can come back, the fundamental issue, I suspect, that all departments need to face if times are tough is what are the things that only Government can do, and that is the criterion, what are the things that only Government can do, and should we think about doing only those things; I think that is the criterion.

  Q70  Mr Williams: One of the targets that you were set was the Lyons relocation target and I think you hit that fairly early on?

  Dame Helen Ghosh: We have exceeded it.

  Q71  Mr Williams: You were going to exceed it because of the relocation of the MMO[25] to Tyneside, but, when the review of the shortlisted locations was done, the staff were not very keen on either Tyneside or Newcastle, which I think was the other one, but you said that the relocation and transition was going to take place without redundancies.

  Dame Helen Ghosh: Indeed.

  Q72  Mr Williams: But, if the staff are not very keen on it, what procedures are you putting in place to make sure that you can achieve your target of no redundancies?

  Dame Helen Ghosh: The Marine Fisheries Agency is an executive agency which is of course part of the Department, so all the current staff in MFA are civil servants, so what we have done, which is what we would do if we were reducing the work in any area of the Department, is say to the staff in the MFA who do not wish to go to Tyneside, "You will, therefore, be able to apply for roles and you become, as it were, moved back into the heart of the Department, or indeed you can apply for jobs in other executive agencies", and that is the commitment we have made to them, so they will now, but I think we are phasing it in such a way so that we make sure that we maintain the skills that we have in the places that we need them. That is the process that the staff who do not want to go are following, so they are just like any other civil servant in the Department.

  Q73  Mr Williams: How successful has that process been? Have you some idea of the outcome?

  Dame Helen Ghosh: Of course, as I say, we are not doing it as a big bang, because we need to make sure we can maintain the service until the April vesting date. I am very happy to establish how many people have already moved out and back into the normal department, but they are, I know, already exploring, applying for jobs, as it were, back in the Department, though they are in the Department already, in fact. I should also say that I think we are being very successful in recruiting very highly qualified staff to work up in Tyneside. I was recently looking at a list, I think in response to a parliamentary question about the qualifications of people we were recruiting, and they were dazzlingly well-qualified. Existing staff are well-qualified, but we do not seem at the moment to be having trouble in recruiting good people.

  Q74  Mr Williams: I understand that Tyneside were very late in showing an interest to view the location for the MMO. Could you tell us a little bit, very briefly, about how the process of selection took place and who, in the end, was responsible for the decision?

  Dame Helen Ghosh: It was a ministerial decision. Again, I would be happy to give you details of the process, but we clearly wanted to go through a fact-based, an evidence-based analysis, and so we looked at a variety of issues: whether it was staff preferences, whether it was the local labour market, whether it was the issue about access to clusters of scientific excellence. Of course, any choice was bound to be controversial. I know the staff very much hoped that we would remain in London, but the then Minister, Jonathan Shaw, and Hilary, took the view that to have a Marine Management Organisation that was not more obviously near a coast would not send the right kind of signals.

  Q75  Mr Williams: I think some interested parties thought it was going to go to the South West. I understand there were ten locations on the shortlist. How many of those locations were put to the Minister?

  Dame Helen Ghosh: I do not know.

  Q76  Mr Williams: Could you let us know?

  Dame Helen Ghosh: I could let you know. I should say, it is a management decision rather than a statutory decision, and, therefore, although I think we went through a very open and transparent process, it is not the same as making a statutory decision under a piece of legislation; it is actually a choice which would be based on a number of factors.

  Q77  Chairman: Just help me to understand. One of your relocations has seen 223 agriculture and horticulture development board posts relocated to Stoneleigh in Warwickshire from what are described as "various locations in the South East". If those people transferred to their new place of work and they are earning the same level as they were, which I presume they are, it is quite hard to understand where the cost savings are going to come. There is no real detail about what the pre and post property costs were, which must, by definition, be the only other place you are going to save the money. Are these real savings? If you could write to me (because you may not know the answer) I would be interested in a break-down to know where the savings come.

  Dame Helen Ghosh: Yes, I would be happy to do that. There was a business case and, as you say, the business case will have analysed the opportunity costs and, indeed, the actual savings you could make moving out of place A and moving to Stoneleigh, and, indeed, there will have been some, I suspect, voluntary redundancy payments made to staff, so that would have been factored into the business case. The argument for moving to Stoneleigh, which I imagine you are familiar with from your previous roles, is that it is very much a cluster now of agricultural and food-based business and science. The NFU[26] is there, we have now brought together the old levy boards into a single place, and so you will get the synergy advantages of all being in the same place but I am sure that we have got financial savings, and I am happy to send you details of the business case.

  Q78 Chairman: I would just like to be convinced that the savings really are real. Let us move on then to the subject of the Customer Focus and Insight Project, a matter that is dealt with on page 131 of your report. In practical terms, what real differences will this exercise make to the quality of the services which you provide? Give me an example.

  Dame Helen Ghosh: I will give you an example. I will give you the example of fishermen. I will just go back a stage. Customer insight is useful for a number of reasons in a department like ours. It is useful in order to give customers the service they want and, therefore, serve the public, which is one of the key things we are there to do, and make them feel happy with our service. It is also about getting them to do the things we want them to do and feel happy about that thing. In persuading citizens, for example, to recycle, persuading businesses to be more resourceful, actually you need to understand how they think about things. You might do customer insight for a variety of reasons. A good example is the work we have done with fishermen, where there are, as you will know, a range of issues about delivery, about change, about government strategy. What we did there was we did research about what their attitudes were to the relationship with government and, indeed, to their business, to how they would like to interrelate to government and, particularly, the Marine and Fisheries Agency staff, who were the people they meet most of the time. We did that analysis. We met groups of fishermen in their places of work around the country and, for example, they said, "Actually, we do not want to look at the Internet all the time. We do not read stuff. What we like is information and guidance direct from people who we know and trust." So what we are now doing is training our marine fisheries officers to be able to give a wide range of advice and information to fishermen on the quayside, and that is a much better way of communicating.

  Q79  Chairman: Why the heck could you not put that in so that we have got some idea, instead of having to read this kind of gobble-speak: "Improved service, better defined systems and nurturing of a cultural shift which is based on understanding and responding to behaviours and motivators will ensure Defra better delivers policies and services that meet customers' needs and achieve our strategic objective"? It sounds like something from a travel book!

  Dame Helen Ghosh: I think we have a tendency to feel that telling stories is a bit infra dig. I have to say, if you listen to any Management Board member or, indeed, to Hilary, we say, "So, what is it we actually do? Tell me a story." We will have more stories in next year, I promise.



23   Transmissible Spongiform Encephalopathy Back

24   Veterinary Laboratories Agency Back

25   Marine Management Organisation Back

26   National Farmers' Union Back


 
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