Examination of Witnesses (Questions 340
- 359)
WEDNESDAY 11 NOVEMBER 2009
SIR NICHOLAS
MACPHERSON AND
MS LOUISE
TULETT
Q340 Ms Keeble:
But you have the lead on child poverty.
Sir Nicholas Macpherson: Of course
we do and I do not seek to duck responsibility for that.
Q341 Ms Keeble:
You are responsible for the 21 measures dealing with material
deprivation. Have you costed them? Do you have any legislative
measures in place to enforce the standards in the material deprivation
indicators?
Sir Nicholas Macpherson: Our estimates
of material deprivation do not hinge on what is in the legislation
but on the real life experience of individuals.
Q342 Ms Keeble:
But do you have any measures to get families out of material deprivation?
Sir Nicholas Macpherson: Yes.
Clearly, the government seeks to intervene on quite a wide front.
Q343 Ms Keeble:
Can we take one of them: the bedroom standard? That is the only
indicator that deals specifically with housing. What bit of legislation
do you have in place, or what intervention has the government
made, to enforce a bedroom standard?
Sir Nicholas Macpherson: I do
not know the answer to that question. There will be people who
do; it is just that there are limits to how much the Treasury
can do in that regard.
Q344 Ms Keeble:
I am a former housing minister. The bedroom standard is that each
child over 10 can share a bedroom only with another child of the
same gender. The legal standard is quite different from that;
it is that all rooms over a certain size in the house count as
bedrooms and there is no issue about gender. For children under
10 there can be four to a room. Why have you not aligned your
indicators for material deprivation with the reality of what the
government is prepared to fund?
Sir Nicholas Macpherson: No doubt
that was an issue which your department would consider.
Q345 Ms Keeble:
The material deprivation indicators are the ones for which your
department is responsible; you have the lead responsibility for
it, not any other department.
Sir Nicholas Macpherson: We do
have the lead responsibility for reporting on this and we chair
the interdepartmental group which takes it forward and we take
responsibility for it. Equally, responsibility for individual
sub-components of what you acknowledge is an extremely complex
basket of indicators would be taken forward by relevant departments.
Q346 Ms Keeble:
Referring to child care, I think it is acknowledged that a key
way out of poverty is work. I do not believe we have yet had information
about the take-up of the child care element of working tax credit.
Can you say what is happening there?
Sir Nicholas Macpherson: I do
not have in front of me the current figures for take up. The trend
has been a rising one. I was responsible for this policy area
in the late 1990s. I believe that in those days about 15,000 families
took up the child care element within family credit and now the
figure is several hundred thousand, so there has been substantive
progress.
Q347 Ms Keeble:
Can we have the figures? The information we had at one stage was
that it had stalled. Since it is topical can you say how much
you will save by taking away the tax relief on child care vouchers?
Sir Nicholas Macpherson: I do
not know the answer to that question.
Q348 Ms Keeble:
What will the net saving be if they switch to the child care element
of the tax credit?
Sir Nicholas Macpherson: I will
have to add that to the ever-increasing list of additional information.
Q349 Ms Keeble:
How can you deliver on child poverty if you do not have the tools
to measure some of the key factors?
Sir Nicholas Macpherson: Having
information is critical. I believe we do have information in relation
to a number of these indicators. You have also drawn attention
to issues like relevant legal standards. This is a very complex
area. We have at our disposal quite a lot of instruments but there
is a whole series of other areas where progress is more difficult.
Q350 Chairman:
You are to examine Ms Keeble's questions in more detail and come
back to us with all the information you have that may enable you
to answer them?
Sir Nicholas Macpherson: Yes.[6]
Q351 John McFall:
What is the present shortfall in the government's target to halve
child poverty by 2010?
Sir Nicholas Macpherson: All I
can tell you is that in the past couple of years the child poverty
figures have remained unchanged.
Q352 John McFall:
It is still 3.4 billion?
Sir Nicholas Macpherson: It is
on page 79 of the document.
Q353 Mr Love:
In the context of the comment you made right at the beginning
that in your time at the Treasury this was the hardest year you
could remember are you still confident you can deliver the £35
million of efficiency savings outlined in your annual report?
Sir Nicholas Macpherson: Yes.
Q354 Mr Love:
Even in the context where it appears that very little of it will
be delivered by reductions in staff?
Sir Nicholas Macpherson: That
is correct. Louise may want to explain how we are to deliver it.
Q355 Mr Love:
Before she does so, I read through the Treasury document which
says that for the core Treasury you will deliver the savings by
"rationalising its organisational structure to exploit synergies
across business areas". I do not understand that, but can
you tell me how that can deliver the savings you outline?
Ms Tulett: Obviously, the efficiency
is not just about making the savings; it is also about either
maintaining outputs or improving outputs for the same inputs.
The reason we can achieve efficiency by redeploying staff is that
provided we can improve outputs by redistributing the same staff
to a higher level of productivity that is an efficiency gain,
even though the expenditure stays static, so it is important to
understand the relationship between them. The paragraph to which
you have just referred is part of the description we have given
in our VfM Delivery Agreement published on our website in July
about how we are to achieve savings. We have already rationalised
some areas. We are trying to maintain a very lean governance structure
and are currently going through a governance review to make sure
we are effective in not allowing overheads to creep up. We are
quite diligent when vacancies arise to assess whether we need
to replace somebody or remove that post. Having removed the post
we may wish to redeploy the resources to create another post somewhere
elsewhere. You will note that under financial services stability
we moved quite a lot of people into international finance.
Q356 Mr Love:
All of that sounds fine but you are talking about increasing productivity
at a time when according to all outside opinion your workload
has gone up substantially.
Ms Tulett: Yes.
Q357 Mr Love:
As I understand it, all of this must be a net cash saving. That
is a major task, is it not?
Ms Tulett: It is.
Q358 Mr Love:
To do it without the increased workload would be a major task.
I question whether you can gain that productivity improvement
against the backdrop of an enormous workload. Is it seriously
considered that you can deliver this?
Ms Tulett: It is a major task
and it is one that we are on track to deliver. The second half
of the programme to deliver will clearly be harder than the first
half because one picks the low-hanging fruit first. Our Autumn
Performance report should be published before recess in December
and the figure that we put into it will be audited to ensure we
deliver sustainable savings and efficiency gains. I do not belittle
the size of the task, but in another way in an organisation that
has quite a lot of innovation and new areas of work it makes us
examine what is lower priority and what one can stop doing. An
organisation that goes through the massive change that the Treasury
has experienced sometimes sets the right culture to be exploratory
in how it can do this.
Q359 Mr Love:
Sir Nicholas, have you had any conversations with the Chancellor
along the lines that this is a relatively small amount of money
in terms of the overall efficiency savings being demanded across
government and to continue this may impair the ability of Treasury
staff to respond to the many demands that the Chancellor places
upon them?
Sir Nicholas Macpherson: The Chancellor
and I have had a number of conversations about how we resource
ourselves through the crisis and the Committee was quite helpful
and supportive in suggesting that we needed more resources. We
have taken in more resources and on the financial stability side
in particular the Treasury is much bigger; it has grown in size
during this period. All I would say is that it has been helpful
to us to have the resources to deal with what we have had to do,
but it should not mean that we give up on the efficiency agenda.
Things like getting better use of our accommodation, rationalising
our estate and thinking through how our corporate services work
remain really important. In a crisis one needs to bring in more
resources. The Treasury has had to operate on a far wider front
and what it has done over the past year in that respect has been
very sensible.
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