Civil Service Compensation Scheme/Work of the Cabinet Office - Public Administration Committee Contents

Examination of Witnesses (Question Numbers 60-79)


27 JULY 2010

  Q60  Charlie Elphicke: I read the diaries of Chris Mullin, who indicates that the most onerous duty of a junior minister seems to be to pour the water for the Cabinet minister to fill his glass, and it does strike me that there is a real issue here, that junior ministers are effectively pointless, except for making speeches in godforsaken places no one else wants to visit, and with decentralisation this problem is going to get worse. Should there not be a reduction in the number of junior ministers so that we can have a few less ministers in the future? Is there much point in having so many junior ministers?

  Mr Letwin: Can I respond to that by just giving you a little case history which I think illustrates the point I was trying to make in response to Mr Brennan's questions. One of the important topics which this Government is seeking to address, which I am sure you will deal with in the Committee, is the question of leading people out of drugs and other alcohol addictions and so on into the mainstream. One can hardly think of anything more important for the sake of our social progress, the reduction of crime and so forth. We have established two inter-ministerial groups, and these are not sort of grand rubber-stamping things, but two groups of ministers and officials working together to try to crack through this problem. One is specifically related to the rehabilitation of people who are caught in drugs, and I am chairing that and there is a group of colleagues, all of whom are junior ministers, involved in that task. That feeds into a second which is being chaired by the parliamentary under-secretary from the Home Office with a group of junior ministers with their officials. We have a relatively short timescale. This is an urgent, pressing necessity and we intend before Christmas, in fact before the end of November, to have a fully developed plan for changing the way in which we do these things to lift people out of drugs. I cannot, as I say, think of anything more important. Now, of course, at the tail end of those discussions, proposals will have to be approved by the Social Justice Committee, which is mainly composed of ministers attending Cabinet, and by the Home Affairs Committee likewise, but, to get there, it is actually the senior officials and the junior ministers that are working to get the proposals together and that is in itself an enormous labour, and it would be impossible to do that without political-level involvement. You cannot say to a group of officials, "Please go away and think about this", this is immensely complicated terrain with considerable political judgments required, but it could not possibly be done by secretaries of state because they are too occupied with too many things. So I think that, very far from pouring the water, we are talking about people who are really engaged in immensely important development of policy.

  Mr Maude: Can I also add just on the Chris Mullin point, and I have not read the whole of Chris Mullin's diaries, but I have read bits of it, and I have said to him that actually I think he rather tamely accepted limitations on what a minister can do. Ministers are there to drive the policy agenda, to be accountable to committees like this and to Parliament for what the Government does, so they are to take responsibility for things, and that means you have to step up and grip the agenda, often collectively, as Oliver has just been describing, but actually just in taking the agenda for which you have been given responsibility and driving it.

  Q61  Charlie Elphicke: But the essential point is that Mr Letwin sets out a very cogent thing which is touching in relation to alcohol and things like that, but is not the truth that it will be less driven by the junior ministers and probably more driven by the special adviser for the Cabinet minister? Also, the second question: why has this got to be done by a senior group of civil servants? Why does it need junior ministerial involvement when in fact does not the Cabinet minister direct the thrust of where he wants to go?

  Mr Letwin: Well, may we stick with my example for a moment and answer in those terms, and it may be Francis wants to amplify in general. I think my example illustrates perfectly where you could not do either of those things. There is not a single Cabinet minister involved; the Home Office, the Department of Health, the DWP, the Ministry of Justice, a whole range of departments have a very strong interest in this area. You would, therefore, require to occupy a group of secretaries of state for prolonged periods, and we are talking here about hours and hours and hours of sitting in rooms, crunching through things, so that certainly would not work. Special advisers cannot possibly be asked to do this task because decisions are required as this is a question of making policy and not of dreaming ideas up. A group of senior civil servants, whilst they certainly have an enormous amount to contribute and will be involved, could not possibly do it on their own because the Government has certain general principles which we are trying to apply to this. We are in favour of payment by results rather than payment for no particular result. We want this to tie up with a series of political priorities to do with the disadvantaged and social justice and the rehabilitation of prisoners and the work programme, so you need politicians there who understand the programme of the Government and make sure that the need gets driven through. I cannot think of anybody that could do that, except junior ministers, and that is why we are using them.

  Mr Maude: I could scarcely disagree more actually with Mr Elphicke's characterisation of the process. Special advisers have a very serious and good role, an additive role, but it is not to do what you suggest, and neither is it remotely appropriate for ministers simply to contract out to senior officials the delivery of fully formed policy. A good policy process is iterative with ministers setting directions, setting objectives and then going through a process week by week, sometimes day by day, of developing policy, looking at options, deciding which to exclude, looking at the delivery implications of what is emerging, and this idea somehow that you say, "I want to do this. Go off, oh senior officials, and devise a scheme which I will either say yes or no to", may have been a way some ministers have worked in the past, but it is completely inappropriate.

  Q62  Nick de Bois: Notwithstanding the high start-up and intensity of what ministers are going through at the moment, does not the actual agenda of smaller Government mean though, fundamentally, that we should be having fewer ministers, and also it is probably fair to ask if we can actually afford the full ministerial complement?

  Mr Maude: Well, we are very, very cheap to run, we are extremely low-maintenance and we have all taken a pay cut. I am actually, because of the size of the Cabinet, not a member of the Cabinet and I am costing very significantly less than my immediate predecessor. The actual cost of ministers is not huge and it is less than it was, and so it should be; we have to lead by example in these circumstances.

  Q63  Nick de Bois: And the smaller Government point?

  Mr Maude: Well, getting to a point where you have smaller Government and big society requires a hell of a lot of stuff to be done, and that has to be done, some of it, by legislation, some of it by driving change through. If we are talking about taking cost out of Government and protecting front-line services, which may be something you are going to come on to, as much as possible and protecting public service jobs to the greatest extent we can requires very intense work in taking those internal costs out of Government, things like renegotiating contracts with suppliers to Government; it does not just happen by itself, it requires intense activity.

  Q64  Chair: But I have to ask the question at least as a tease: is this not a classic example of what the Adam Smith Institute called `public choice theory', that, whatever cuts have to be made, they are not going to be us?

  Mr Letwin: Chairman, I do not think it is, partly for the reason that Francis advances, that both he and I are disbeneficiaries of the principle, the right principle, that there should be very limited numbers of ministers paid Cabinet salaries, and we accept that principle. We are also disbeneficiaries of the principle that we will take not a one-year pay freeze, but a five-year pay freeze after a five per cent pay cut. We have tried to lead, as Francis says, by example. I think we really must not underestimate the extent of the structural reforms we are trying to bring about, and those in the end are the reforms which will lead to a giving of the power to the people that we are seeking, and it may be, as Francis said right at the beginning, that in due course, some while away from now, the Prime Minister looks at the whole scene and says, "Now we have got to the point where those structural reforms are in place, the spending of Government has been constrained and we no longer need so many ministers carrying out the task". If he came to that conclusion, fine, but I do not think it applies today.

  Q65  Nick de Bois: I think in my question I said that there is the high start-up and the initial investment for ministers that I fully appreciate, but in many ways, if you are successful, my question is, by definition, we should need smaller Government.

  Mr Letwin: Well, I would certainly be happy if the Prime Minister got to the point where he felt that we had brought about enough change so that we were giving people enough power for themselves and giving—

  Q66  Kevin Brennan: How long do you think that will take?

  Mr Letwin: I do not know, and it is certainly not going to advance my or Francis's career if we try to presume on what is, as you very well know, entirely a prime ministerial decision.

  Q67  Nick de Bois: Just to explore this point, actually, if we are successful in many ways of devolving power, one could argue that some ministers were doing themselves out of a job. You could take housing as a very good example where we are devolving power down the line much more to local authorities, so what would a housing minister do after that, apart from presumably keep an eye on things? Is that the reality?

  Mr Letwin: It is certainly a very noble ambition, which I think Francis and I have shared for many years, to try to ensure that people are given so much power over their own lives that Government does not any longer need to exercise so much and it works better without Government exercising so much power.

  Q68  Chair: Shall we move on. Perhaps we could spend ten minutes each on the four remaining subjects and, first of all, quango reform. How does the Government identify a superfluous quango?

  Mr Maude: Well, we subject every quango, well, there is a first sort of existential test which is: is what this body does necessary at all? If it passes that initial existential test, we then subject it to three further tests, one of which it has to meet in order to be justified as a body independent of ministers and not accountable through ministers to Parliament. Those tests are: does it do something which is plainly technical; does it do something which is about the measurement of fact; or does it do something which again plainly requires it to be politically impartial? If it does not meet one of those three tests, then our collective conclusion, as a Government, is that it should be brought back within a department, so that what it does, to the extent that it needs to be done at all, is accountable to Parliament through a minister.

  Q69  Nick de Bois: Would you give PASC a role in approving new or reorganised arm's-length bodies as, I think it was, the Institute for Government recommended?

  Mr Maude: It is not a bad idea actually.

  Mr Letwin: That is a rather attractive idea.

  Mr Maude: So you can take that as a yes.

  Q70  Nick de Bois: Okay, we will work on that one! What about a similar role then in approving the abolition of excessive existing arm's-length bodies?

  Mr Maude: Well, there are two processes for abolishing arm's-length bodies. Many of them are not statutory and many of them had been established on an extra-statutory basis, and a lot of them are statutory and will require primary legislation to change their role or to abolish them. Our intention is to accomplish much of the latter part of the programme through a single Public Bodies Bill which we aim to introduce, all being well, in October or November of this year, which will obviously be subject to the usual legislative processes. As you will have seen, some departments have begun to announce some of their conclusions of the review which has been conducted, say, on a reasonably collective basis with me and my officials providing challenge to the reviews, and it has been a very productive and collaborative process, so the extent to which this Committee wishes to engage in that process is a matter we could discuss, but the timescales are somewhat compressed.

  Q71  Chair: When will you be producing this legislation? Is it still on track for November?

  Mr Maude: October or November, we hope, yes.

  Q72  Kevin Brennan: Can I just briefly ask you about the letter you sent to the Chair of the Committee about the appointment of, first of all, the Service Commissioner and the Commissioner of Public Appointments, the joining together of those two appointments. This Committee has done inquiries in the past into public appointments and the system. Would you broadly say that the system that we have now and that has been in place in recent years produces a fair system for making public appointments and one that is free of political bias?

  Mr Maude: Free of political bias? No, I would not say it has been completely successful in doing that.

  Q73  Kevin Brennan: Why is that? What is wrong with the system, if that is the case?

  Mr Maude: Well, it is very `processy' and quite bureaucratic at the moment. I think it has also led actually in the process of making appointments to public bodies to enormous amounts of public money being spent on hiring external head-hunters in a way that has been very good business for head-hunters.

  Q74  Kevin Brennan: So is it your intention, as well as merging these two posts, to bring forward proposals to change the procedures about how public appointments are made?

  Mr Maude: I would certainly like to look at how they are made and see whether there is not a way of making it a bit brisker, a bit less cluttered, but, just to be clear, the office of the Commissioner for Public Appointments, if that is the right title, these are about ministerial appointments, so at the end of it ministers will make these appointments.

  Q75  Kevin Brennan: Indeed, but from a shortlist usually of two that has been approved as being above the line and appointable by the Commission for Public Appointments or indeed the Commissioner, as appropriate. I do not want to pursue this too far, Chair, because I know this is not our business today, but, if there are thoughts about changing this, it would be very useful, I think, if you could keep the Committee informed of what your thinking is.

  Mr Maude: Absolutely.

  Q76  Chair: It is tangentially related to quangos, but thank you for that.

  Mr Maude: Tangentially, but closely related.

  Chair: Shall we move on to how the Government is making public spending reductions.

  Q77  Greg Mulholland: Obviously, this is something that the Committee, I think, will be particularly focused on, and rightly, during this Parliament. Could you clarify for us, first of all, just so that we are clear, the relationship between the Efficiency and Reform Group in the Cabinet Office and the `Star Chamber' of ministers and how those two bodies will work together?

  Mr Maude: Well, the Efficiency and Reform Group is a collection of the pre-existing parts of central Government. The only machinery of Government change we have made is to bring the Office of Government and Commerce, the OGC, and its agency, Buying Solutions, under the ambit of the Cabinet Office, so all of this is, as it were, under one roof, a virtual roof in this case, because there is a lot of interaction between, for example, the Office of Government and the CIO, the Chief Information Officer who deals with information technology, where the relationship with procurement in OGC is very clear, so bringing it altogether in one place has created the Efficiency and Reform Group. The relationship with the public spending process is this: that there is an Efficiency and Reform Board which sits over the Efficiency and Reform Group, which is co-chaired by the Chief Secretary and myself. We are looking essentially at cross-cutting changes that will drive efficiency. For example, the Efficiency and Reform Group support me in the work we are doing in renegotiating contracts with the Government's biggest suppliers in centralising procurement of commodities, goods and services across the Government so that the Government can use its scale and buying power to drive down costs to the taxpayer. The greater extent to which we succeed in driving down costs in those cross-cutting ways, the more assistance it gives to departments in the way they address the pressing demands of spending reductions and deficit reduction, so its relationship with PX is kind of through me and the Chief Secretary, equipping us to put pressure on departments through this spending process to take out unnecessary cost from their internal structure and processes rather than the pain being taken in the delivery of front-line services on which our citizens depend.

  Q78  Greg Mulholland: So that is more the work of the Star Chamber? Is that correct? Can I ask you on that, because you are both obviously key members of the Chancellor's Star Chamber, could you give us an insight into the process that is being followed and what criteria are used in terms of deciding what to cut and what not to cut?

  Mr Letwin: Yes, in fact that is exactly what I was about to offer as a complement to what Francis has been saying. The Public Expenditure Committee has been established in order to provide sufficient weight behind the Treasury in its discussions with departments, and those discussions are carrying on, and will carry on for a few weeks yet, before the Public Expenditure Committee, which has sat and discussed its process, but has not yet tackled any particular department, begins to intervene in the case of departments that have not been able to reach a settlement with the Treasury. That is a process which is intended to enable the Committee to make judgments under circumstances where the Treasury and a department cannot reach an accommodation.

  Q79  Chair: Is `Star Chamber' a good name for this body?

  Mr Letwin: This is not a name that we have ever given it, Chairman.

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