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

Examination of Witnesses (Question Numbers 80-99)


27 JULY 2010

  Q80  Chair: Henry VIII's Star Chamber Court was a sort of pet court. It had no legal standing and was designed to do his hatchet work!

  Mr Letwin: It does not sit in Star Chamber Court and it is not called the `Star Chamber', it is called the `Public Expenditure Committee'.

  Mr Maude: It is far less exciting though!

  Mr Letwin: It has none of the tools that were available to the original Star Chamber available to it. In the end, the Government as a whole very fully recognises that we all share responsibility for achieving the deficit reduction and this is simply a method for trying to make difficult judgments where departments have not been able to reach an accommodation with the Treasury.

  Q81  Michael Dugher: You mentioned in your previous evidence to us the importance of protecting front-line services, and that is something that ministers also stated repeatedly during the election campaign. Now, notwithstanding the fact that, I think, politicians of all parties tend to be afflicted with a bout of optimism prior to polling day, you must understand that the sheer scale and timing of the cuts that you are introducing will have a massive impact on front-line public services. What impact assessment and other mechanisms are you putting in place to actually try and assess that prior to these cuts going ahead?

  Mr Letwin: Well, a huge amount of work is being done in many dimensions to try to end up getting more for less. It is not our ambition simply to maintain the quality of public services, but to improve them.

  Q82  Michael Dugher: But, if you are making—excuse me for interrupting—25 per cent or maybe 30 per cent when people are looking at 40 per cent cuts, again, notwithstanding your admirable optimism, you must surely appreciate that you do not get more for less. Do you not get less for less?

  Mr Letwin: No. I understand that that is a view that some people take, but it is not one we share. The ability to improve the outcomes depends on having a sufficiently imaginative and radical view about how we accommodate having less input in such a way as to deliver a better output, and I really believe we can do that. Let us take, for example, because it is entirely in the public domain, the question of how we improve policing, a classic front-line service in Britain. I think all our parliamentary colleagues would agree that it is not perfect at present and many people feel that they are not adequately policed at the moment, and the Home Secretary has made it perfectly clear that the effect of the public spending round will be to put some pressure on police numbers.

  Q83  Michael Dugher: You mean having less police? That is what `putting pressure on police numbers' means, does it not? That is what is planned.

  Mr Letwin: That is exactly what it means, as she has said, but we are taking a series of steps which we believe will mean that the outcome is not the same level of policing, but better policing, even given those constraints, and that is by removing a huge pile of bureaucracy and paperwork, which is occupying police time which, therefore, does not end up by delivering service to people, and by changing completely the relationship between the police and those they are policing through crime maps, through `beat' meetings and through the election of police commissioners. We think we can completely change the relationships there in such a way that the police actually deliver what it is that local populations wish to have delivered because, instead of occupying their time looking upwards towards the Home Office and dealing with the bureaucracy deluging them from above, they are focused remorselessly on delivering what the locals want. Now, that is just one example among many. Whether we are right or not, time will tell, but we really passionately believe that we will end up with the best of policing in this country, notwithstanding spending less on it.

  Mr Maude: Can I just add a point on Mr Dugher's question about more for less or whether it is just less for less. The whole area of the online delivery of public services is one in whose progress we are in the infancy still, but I would just quote an example from your own Party's time in office when the DVLA produced a system for renewing your car tax online. This massively improved the quality of the public service in terms of convenience to the citizen and the transaction now gets done for literally a tenth of the cost. The transaction costs £1 and the unit cost was about £1 before when it was paper-based and online it is 10p; much more for hugely less.

  Q84  Michael Dugher: So are you going to have online police officers or virtual policing? I take your point, but that line of argument does not actually work with all public services.

  Mr Letwin: I think it is very important that you are listening to both what Francis is saying and what I am saying and that they are actually two parts of the same story. In part, we hope to get more for less by being more efficient in the way we deliver things that are delivered, in many cases, by old-fashioned systems and, in part, by making structural reforms that alter incentives and relationships: and we are not in any way confusing those, neither am I trying to get Francis to share a vision of online policing which we do not believe, nor is he trying to get me to believe that we do not need structural reforms, which we do need. What we are saying is that you need both efficiency of the back office massively and structural reform to get the services' structure right. If you do those two things together, you really can deliver more for less.

  Mr Maude: And the two meet and overlap. In exactly what Oliver has been talking about, police reform and the whole thing about crime-mapping, it absolutely depends on the effective use of new technology, not massive, grand, new IT schemes, but relatively accessible technology to which people have ready access.

  Chair: Moving on, the big society.

  Q85  Robert Halfon: How would you explain the basic idea of the big society because, whilst many of us know what it is, if you still ask people outside, they are confused? Also, would you agree with what the adviser said, that there is some kind of coral reef?

  Mr Maude: Yes, Lord Wei has this very engaging analogy of the ecosystem. What is the big society? Well, we are at the end of the era of big Government. Big Government has been unsuccessful in addressing many of the acute social problems our country faces and, in any event, as the outgoing Chief Secretary said, there is no money. The thinking behind the big society is that you cannot simply allow the State to retrench and just assume that spontaneously and organically the social capital, the myriad organisations on which a successful, strong, cohesive society depends, will automatically spring into effect, so the State has to play a proactive, interventionist role in stimulating the creation of that social capital. This is not by having a grand, national plan, but this is by a whole lot of different approaches. We see the big society as being the other side of the coin of decentralisation and localism, if you like, in terms of taking power away from the centre and giving it to communities as it should all be the other way round and it should be about communities, families, neighbourhoods, people taking power, not being graciously given it by the centre. That is the demand side of the equation, the big society groups who both are able, and want, to take power, take more control over their lives and the lives of their communities. Decentralisation is the supply side, that is the push, and the big society is the pull. In every part of our country, is there enough social capital to make this happen automatically? No, which is why the State has to have some kind of interventionist role which is why we have laid stress on the desirability of training up a cadre of community organisers whose job it is to stimulate and support the neighbourhood groups, the rich network of neighbourhood groups, which is essentially what much of what social capital is, and a small-scale scheme of grants and endowments to support them.

  Q86  Chair: Is there not an oxymoron at the heart of this programme? I believe in Burke's platoons, which we might call the same as the big society, and the Government is going to do something to try and repair the broken society, but it is rather like in The Life of Brian, Brian saying to the crowd, "Be individual" and they are all saying, "Yes, be individual"! If you are going to put 5,000 community activists into society, is that not Government doing something which is itself going to displace what initiative might have been there before that government action was taken?

  Mr Maude: Well, if it did do that, then it would be wrong and it is not what our intention is, and we will be at pains to ensure that that is not what happens. One of the criticisms that gets made of our approach to the big society is that it is fine in the leafy suburbs where there are residents' associations and lots of stuff going on, but what about the really deprived areas where there is not so much going on, there is not so much social capital? Well, there are two points to make. One is that there is always more than you think, there is always some kind of often completely informal and not remotely formally organised activity, some kind of social capital often operating without any public money support at all, so it is very rarely that there is a complete desert in terms of social capital. Secondly, where there is not enough to allow that part of our society to be fully engaged with society, then some help is needed to support it, and that is our intention.

  Mr Letwin: Can I just offer a general observation in response to your question which comes back to Mr Halfon's question as well. Government has not been neutral in creating the circumstances we currently face. In many cases, it is government action that has suffocated what would otherwise be natural activity, not intentionally mostly, but by mistake. What Francis rightly describes as the `supply side', the structural reforms we are putting in place so that there is much more opportunity for people to run things at the local level, schools, community groups, whatever it may be, opens up an opportunity. If there had not been previous government action that had suffocated natural activity, we would not then need to stimulate the demand side of the equation, but in fact there has been, so all we are trying to do is to counteract what has been done unwittingly by previous administrations over very many decades. Ten years ago Mr Halfon will very much remember his own part in this when I set out a vision for enabling societies to do essentially the same sort of thing that we are talking about now. I do not think I then sufficiently recognised, and we have come gradually to recognise, that it is not enough just to open up the opportunity, but we actually have to take practical steps. Once they are working, we will no longer need to take them, there will be the social capital and, on the basis of that, the dividends will be continuous action at the local level. The last thing I would like to say is that I am fantastically encouraged and really quite surprised by the extent to which, as Francis says, despite the suffocation over many decades, there is so much there. When Greg Clark, whom you may want to interview about this as Minister for Decentralisation, just put up in lights the opportunity to come forward and be vanguard areas, we little expected that we would receive a deluge of people around the country, saying, "We'd like to do this. We want to get on with this". I think there is a huge will across the country to take power into people's hands and to achieve things locally now, we are allowing it, so yes, we will encourage it, stimulate it and facilitate it where it does not exist, but actually a lot of it is going to happen naturally.

  Q87  Robert Halfon: Iain Duncan Smith has talked about the tessellation of the bigger charities. How will you make sure that the big society really does go down—and I am not talking about the schools or the police which are all part of that, I understand that, but literally goes down—to the neighbourhood level where the residents' group wants to transform their neighbourhood and so on and not just to be hijacked by some of the bigger charities that are very astute at political lobbying?

  Mr Letwin: Well, Francis may want to talk about the charity end of that, but can I just dwell on the community group end, in many cases not even charities. I think it is little-recognised that one of the most important and radical steps we are proposing to take is to give back to neighbourhoods the ability to plan physically the neighbourhood, which is fantastically important to people. What happens when neighbourhoods start all over Britain down the road, as they will under our plans, of getting together and trying to work out what the neighbourhood should feel like and look like with the power to determine that? What will happen is that people will forge new relationships, nothing to do with organised charity, but just people getting together. Similarly, we have an immensely radical set of proposals about enabling community groups to take over failing both public sector and, under some circumstances, private sector assets locally, pubs and community centres. Again, it is not a question of the big battalions, but the Chairman's little platoons. These open up the possibility of people getting together in housing estates and villages alike, and indeed the suburban areas between the two, and working together to change their communities which will interact of course with charities small and large and organised voluntary groups nationally and regionally, but actually it is at the local level that it will be built.

  Q88  Robert Halfon: Philip Johnston's critique that you are not doing enough for the big society to involve local Government, what is your view about that?

  Mr Letwin: He really needs to have a prolonged tutorial with Eric Pickles. Eric has an absolutely marvellous presentation in which he explains his three crucial and complex priorities for local Government and the relationship between local Government and central Government, and he then shows a slide: one, localism; two, localism; three, localism. Eric is taking steps to recreate the ability of traditional local Government alongside this double devolution to communities to give them universal powers of competence, to enable them to take charge of their own lives and the lives of their communities properly, for example, through not having ring-fenced grants, but being able to decide how to spend their own money. It is actually something which the Chairman, in another guise many years back, argued for and we are now making progress in this direction at last.

  Q89  Chair: Would you be attempting this with such urgency if it were not for the constraints on public spending?

  Mr Letwin: The answer to that, Chairman, is yes. Even if we had all the money in the world, this is the most centralised country in Western Europe that needs to be one of the most decentralised.

  Mr Maude: Oliver and I have been making speeches about this for ten years, at the very least.

  Q90  Chair: I have made one or two myself.

  Mr Maude: Indeed, very good ones, if I may say.

  Q91  Chair: I think you have answered this question really, but in the modern world people are very busy and we have all been brought up to feel, "Oh, other people do that. The Government does that". Are these people available to take on these roles, typically, some would say, to run parks and schools and things that Government has been doing for a long time?

  Mr Maude: Well, (a) there is the old rule that, if you want something done, find a busy person to do it, and (b) I would just talk about something which is related, which is our plan to allow groups of public sector workers to form mutuals and co-ops and then bid to take over, run and deliver public services. On that front, we are finding a lot of enthusiasm among frustrated public servants who see ways of their services being delivered better and want to do it. One of the things we did at the very early stage of the Comprehensive Spending Review was to issue the spending challenge to public sector workers. It was slightly kind of ridiculed when we announced it and cynical people, there are some, believed this was some kind of gimmick just to enable us to say that we consulted. To our surprise, delight and slight consternation because it had given us a big logistical issue in dealing with them, there were well over 60,000 responses of mostly really serious, hard-edged ideas of how to deliver public services better while cutting the cost. What that told me is that there is in our public services huge pent-up frustration of people at the front end of delivering public services who see how it can be done better, but who do not have the power to do it. The first stage is that they have submitted their ideas to us, which we will deal with in the best way that we can and hope to action as many of them as possible, but the second thing is that out there is a huge number of people, among whom will be some people who are public sector entrepreneurs, people who are deeply imbued with the public service ethos and want to devote their career to delivering public services, but who are nonetheless entrepreneurs who, if we can find the means of enabling them to take charge of the delivery of those public services, leading a mutual or a co-op to do that, then I think, to go back to Mr Dugher's point, there is a lot more that can be done and for less.

  Q92  Chair: Shall we move on finally to the work of the Cabinet Office. You have brought a lot of private sector people into Government in the short time you have been going, such as Lord Browne and Lucy Neville-Rolfe. Is running a government department really like running Tesco or BP?

  Mr Maude: Government is not like a business. I sometimes reflect that business is difficult, but simple in that there is a very simple imperative which is to make a profit, which you can only do by efficiently serving your customers and giving your customers what they want. Government is difficult, but complex because you are attempting all the time to achieve different, and often conflicting, objectives which often have tension between them. The fact that Government is different from business does not mean that it does not have a huge amount to learn from business, and some of the things that we are doing at the moment, trying to centralise procurement, the way Government procures, massive disparities in how different bits of Government buy kind of basic, boring stuff, like photocopier paper, huge disparities in the price, we are not using the scale of Government to drive down those costs and we should be. We have not up until now been attempting to manage the relationships with the major suppliers to Government on a cross-Government basis, so actually it is the big suppliers who may be earning, in some cases, billions from Government across the piece who have been able to pick off different bits of Government, and we are saying that you need to do that differently. I am leading that process and I am very, very glad indeed to have the support and advice of very serious people from the business world, who have done this themselves. In a big, complex business, there are some things you expect to run from the centre and they are strategy, strategic communications, cash, you want to control cash from the centre, headcount, broad HR operating standards, property, big projects that carry reputational, financial and operational risk, you must control those from the centre. Commodity procurement, commodity goods and services, you would expect to use the scale to procure those from the centre, but everything else actually you should push as far away from the centre as you can. If I can venture a mildly partisan comment, under the last Government it sometimes seemed to me that those things were the wrong way round. There was not control over those few things that should be tightly controlled from the centre and yet, on the other side of it, there seemed a constant attempt to micromanage delivery from the centre, so on exactly that which should be loose and pushed away from the centre, there was a completely vain and doomed attempt to control and micromanage from the centre, but the things which the centre must have a mandate to control they were not, which is one of the reasons why spending has been out of control.

  Q93  Nick de Bois: Just turning back to the welcome idea of non-executive directors, can you clarify their reporting line? Do they report to the Minister or will they actually report to Lord Browne?

  Mr Maude: Well, they will be appointed by the Minister, these are ministerial appointments, and there is a general view that you feel accountable to whomever appoints you, in my view, and they will not be accountable to Lord Browne. He will, as it were, lead the community of non-executive board members and I would expect him to convene them periodically as a group to share experience, to learn from each other what works, what has not worked, are there common patterns, all of those kinds of things, but they will not be accountable to him.

  Q94  Nick de Bois: Just pursuing the same line, if we want to take advantage of the skill set of the non-executive director, they may end up in a position where they disagree, for example, with the Minister about the performance of a permanent secretary. Is it clear that, given that non-execs will have, if you like, the power to suggest a permanent secretary's removal, if I understand it right—

  Mr Maude: Yes.

  Q95  Nick de Bois:— will there be a conflict there, and are they simply making a recommendation or will it be, "No, this must happen, Minister"?

  Mr Maude: This is a kind of nuclear last resort—

  Q96  Nick de Bois: Sure, I understand that.

  Mr Maude:— and the judgment we made was that, for very serious people from the outside world to feel that this role is not window-dressing, then you have to have a last resort power to recommend, and it is no more than recommend, to the Prime Minister and the Head of the Civil Service that a permanent secretary, whom they judge to be an obstacle to effective delivery, should be removed. You have to have a way of—

  Q97  Nick de Bois: It is a pretty strong recommendation, as I understand it.

  Mr Maude: Yes, it would be very extreme, but the concern that gets raised about these sorts of roles is that they are fine, but how are you going to get purchase and how are you going to capture the attention of the official system? Well, this seemed to us to be a way of capturing the attention.

  Q98  Greg Mulholland: You will be aware that there has been some concern, particularly from the FDA, about the politicisation of departmental boards and that ministers do chair them. How do you respond to that, and can I also ask why you actually are proposing that ministers be able to chair them rather than necessarily permanent secretaries, but how do you respond to the charge of this being politicisation and how will you guard against that?

  Mr Maude: Well, the first point to make is that it is not a universal pattern that permanent secretaries have chaired these boards. In the last Government, there were several departments where ministers themselves chaired the boards. The second point is that ministers are, at the end of it, responsible for what their departments do and I do not think it is enough for ministers simply to remove themselves from any involvement with the operational implementation of policy. They should be involved with it, not to micromanage it, but to be in a position where they can be held to account. Ministers should be held to account obviously to Parliament, but also by the Prime Minister, for the way in which they discharge their responsibilities, and I do not see how you can do that unless you are chairing the board.

  Mr Letwin: If I can just amplify that, what we have been negotiating with each Secretary of State and Permanent Secretary jointly is the Structural Reform Plan for the Department in question. Coming out of the Public Spending Review, they will have been negotiating with the Treasury, and ultimately with the Public Expenditure Committee and Cabinet, a plan for getting more from reduced inputs. Those together will form a business plan for the Department. In each case, the Secretary of State and ministerial colleagues are bound in to deliver what it is that they have participated in negotiating, and I think that is an extraordinarily important part of the architecture of this Government. We are not saying, "Here are ministers and we will make some generalised statements about what we want in the coalition Programme for Government or otherwise, and there is some set of officials to implement it". We recognise that, in order to achieve the goals we have set out in the Programme for Government through the medium of the structural reform plans and the Spending Review, ministers, including secretaries of state, need to be absolutely bound into the delivery, as Francis said, and the continuous monthly and weekly monitoring of the delivery of those plans is not aimed at officials, but aimed at ministers. It is for them to work out the ways in which, through their officials, they make these things happen.

  Q99  Greg Mulholland: That was a very helpful explanation, but it did not really deal with the politicisation point, so how would you take that head-on?

  Mr Maude: Well, I genuinely do not understand it. Ministers are political, but the idea that somehow, because you are a minister and, therefore, political and you should not chair the board of a department for which you take responsibility seems bizarre. No one pays greater obeisance than I do to the idea of political impartiality of the Civil Service. I take this really seriously and I strongly supported the Civil Service provisions in the Constitutional Reform and Governance, now, Act which we were at pains to ensure got on to the statute book before the election in the wash-up period, which gave a statutory basis to the Civil Service Code which entrenches the Civil Service. I take this really seriously, and I worship at the shrine of Northcote Trevelyan in my more unguarded moments, but the idea that somehow it is politicising for ministers to, in a very clear way, take responsibility for what their departments do just seems bizarre and I genuinely do not understand it.

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