Smaller Government: Shrinking the Quango State - Public Administration Committee Contents


Examination of Witnesses (Question Numbers 149-218)

Mr Jonathan Baume, Mr Dai Hudd, Mr Geoff Lewtas and Mr Charles Cochrane

9 November 2010

Q149   Chair: Would you like to introduce yourselves for the record? Mr Hudd?

Dai Hudd: I will kick off. Dai Hudd, Deputy General Secretary of Prospect.

Geoff Lewtas: I am Geoff Lewtas from PCS. I am the Director of Bargaining and Equality.

Jonathan Baume: Jonathan Baume, General Secretary of the FDA.

Charles Cochrane: I am Charles Cochrane. I am the Secretary of the Council of Civil Service Unions.

Chair: Well, thank you all very much for joining us. We are discussing quangos this morning. Mr Elphicke?

Q150   Charlie Elphicke: Good morning, gentlemen. I was wondering if you could tell us how far you were consulted about the review process on decisions to abolish, merge or make more efficient or more effective certain public bodies.

Charles Cochrane: I will start, if you like. I think the short answer is, both in the general and the specific, we weren't. Whilst we initiated some discussions with the Cabinet Office to ask both about the general process of reviews and abolition of public bodies and of the Bill, we certainly weren't subject to any formal consultation. Certainly, on organisations in which we have a close interest, whether that is the Audit Commission, Becta or the Civil Service Appeal Board, in all cases the announcements were made before there were any discussions with us and I think in at least one case we are still awaiting discussions with ministers about specifics. So it is very much a case of no.

Dai Hudd: Can I give an example of that? The Audit Commission announcement was made by the Minister, Eric Pickles, on Friday 13 August—it was a Friday the 13th; that is an irony, if ever there was one—and it is only tomorrow that we get face to face with the Minister to discuss the implications of that announcement, even though already there are 300 redundancy notices that have been issued as a consequence of that announcement on 13 August.

Q151   Chair: Anybody else?

Geoff Lewtas: I think similarly, you could refer to the announcement about the closure of the Regional Development Agencies, which we see as unbelievably difficult to justify, in the sense that there is a need for the type of co-ordination involving private sector interests and the concerns about economic regeneration in the regions. There has been no debate at all about the real reasons for that decision and no possibility since of any proper consultation that means you can have a dialogue about the reasoning behind it and the justification for it and start to examine those arguments and discuss them in a proper manner.

Jonathan Baume: I have nothing to add on the question of consultation, because the answer is no, we were not consulted beforehand. On one or two cases we might have had about an hour's advance notice of announcements being made, but certainly no advance consultation.

Q152   Charlie Elphicke: Just before we move on to quangos, looking at public bodies as a whole, including government, and looking at efficiency and effectiveness, this Committee has had a lot of concerns about conferences and things like that. Have any of you heard of a thing called Civil Service Live, which apparently is a three-day gathering in Olympia, and have any of you been to it?

Charles Cochrane: Yes, we have, as have ministers of the current Government and ministers of previous governments. It is generally seen as a very worthwhile event for all the participants. It's something which I believe is also done at little if any cost to government because it is subsidised by Dods. Can I just make another point, if I may? You use the word quangos, which, if I remember rightly, was something coined by Philip Holland MP many years ago—I have been around long enough to remember it—who wrote a book on the subject. What was it? Quasi­autonomous non­governmental organisations. But in fact the bodies we're talking about, their official title is non-departmental public bodies, and certainly I think that is the phrase that we think we should be using, rather than quangos, which I have to say has a slightly pejorative tone about it.

Q153   Charlie Elphicke: Do you think, though, that having three days of civil service time, which could be spent working for the nation, on a conference is a good idea?

Charles Cochrane: If you were to ask Francis Maude or the Prime Minister, both of whom were participants at Civil Service Live, I am sure they would give you a full answer to that point, but my impression is that every one of the major speakers there thought it was a very worthwhile event.

Q154   Chair: I think the burden of Mr Elphicke's question is: does Civil Service Live constitute consultation?

Jonathan Baume: No. Civil Service Live is an event where civil servants—people do not spent three days there, for the most part; they spend a day and different groups of people come on different days and there are presentations and seminars. As I say, ministers from both governing parties have taken an active part. I am one of the people on this platform who have taken part in seminars and presentations there, and there is a wide range of outside involvement in that. But it is not in any sense about consultation. It is about giving particularly sometimes junior staff—because members whom we represent are often party to these wider gatherings—the opportunity to take part in wider, cross­civil service or wider-than-the-civil-service events, because they do not often get it. But it is not in any sense a consultative forum; it is an area for debate, seminars and presentations, and as Charlie has said, Tony Blair, Gordon Brown and David Cameron as Prime Minister have addressed those bodies and been subject to question and answer sessions, which bring in far more civil servants than might otherwise have access to that kind of event. But it is nothing to do at all with consultation of any kind on these kinds of matters.

Q155   Nick de Bois: Just before I ask this question, can I declare an interest? For 25 years I've been running and working in live event management, and I think the answer is slightly disingenuous. Let me just ask it again. You may have three days with people coming in and out, but the time and cost of preparation for putting on a three day event far exceeds three days. What I haven't heard, and what any commercial customer would ask, is: what is my ROI? You have given us what it isn't, so what is it? Justify that one.

Chair: ROI?

Nick de Bois: Return on investment. You have told me what it isn't; I am looking for what it is this time.

Jonathan Baume: I think you would need to ask Francis Maude. You would need to ask ministers and you would need to ask the Cabinet Office. It was an imitative launched under the previous Labour Government. I cannot speak for Gus O'Donnell, but I know Gus was supportive of it, as a way of trying to reach out and partly present the Civil Service more publicly, but also to involve civil servants beyond the immediate Whitehall senior echelons in these wider events and participation. But the issues about the costings and the value for money I do not think we are the best people to answer.

Q156   Nick de Bois: No, you are not; I accept that, but if you are participants, you should have got something out of it and I am just not quite sure what it is, but I won't pursue that.

  Dai Hudd: Well, we got quite a few members.

Q157   Charlie Elphicke: So what were you gentlemen doing? Were you enjoying the junket or signing up members?

Charles Cochrane: I don't remember the junket bit. We are talking a little bit—

Charlie Elphicke: It was late at night.

Charles Cochrane: No, it was a serious discussion about serious issues and I think, bluntly, provided an opportunity for the Government in its very early days to set out its stall on a range of issues to an audience who were very interested in what they had to say.

Dai Hudd: At the last Civil Service Live, the issue of changes to the Civil Service redundancy arrangements was very, very high on the agenda, and the workshop session I did with fellow colleague trade unions was a drop-in session for people to ask us questions of the moment about where discussions were with government. So it certainly wasn't a junket and it wasn't overtly a recruiting exercise; it was an opportunity for civil servants from around the country simply to talk to the people who represent them directly with the Minister and the Cabinet Office about what issues were affecting them.

In terms of its value, I agree very much with my colleagues; I think those questions need to be put to someone else. Do I think the Civil Service anxiously waits for Civil Service Live to come around every year? No, I don't. Do civil servants say, "Oh, we can't wait for Gus O'Donnell to make an announcement at the next one and we'll know a bit more about what's happening"? No, I don't. What I do see there, though, is an enormous number of private sector contractors very much bidding for work in the Civil Service. I would argue that it is as much a showcase for that as it is an audience for particular civil servants as well. But I very much agree with my colleagues: in terms of its value, you are asking the wrong people.

Q158   Robert Halfon: Do you think it would make any difference—

Chair: Sorry, Mr Halfon; you need to declare your interest.

Robert Halfon: Oh yes, sorry. I am a member of Prospect, I should say. Do you think it would make any difference if Civil Service Live did not occur?

Dai Hudd: Well, this is one we have not rehearsed, so my colleagues will clearly disagree with me if they so choose, but my own view is that a London­based, centrally­driven event like Civil Service Live is going to have a limited opportunity to reach out to where a lot of the Civil Service work occurs, which is outside of the Whitehall family. I do think there is an argument about taking, as it were, Whitehall out to civil servants in the greater part of the country to have some degree of connection with the valuable work they do and how decisions are made on their behalf. I think that would be of value. I have doubts myself about how a big event, run in the way that it is, fulfils that function. But should something be done on that? I think it should.

Chair: I am going to close down the discussion about Civil Service Live.

Q159   Mr Walker: Well, can I just ask a question? Very briefly, since we are on conferences, the biggest waste of time looks like Davos, so I would not feel too chased.

Dai Hudd: I have never been invited.

Mr Walker: I wouldn't want to go.

Chair: We are not doing Davos.

Mr Walker: We are not doing Davos. Well, I don't want to attack these good men for going to some ghastly thing at Olympia for three days.

Q160   Chair: Have you finished on consultation, Mr Elphicke? Can I just ask about the Cabinet Office Business Plan, which was produced just yesterday, as you know? It says under 1.6.iii, "Review terms and conditions of … employees of public bodies which are to be removed—completed". That is an action that has been completed—to review the terms of employees of public bodies that are to be removed. Have you been consulted about that?

Geoff Lewtas: No, I do not think so.

Jonathan Baume: Not directly, no.

Q161   Chair: Do we know what it means?

Geoff Lewtas: I do not believe we have. What we are aware of is that Francis Maude did set up, along with Danny Alexander, the Chief Secretary, what is called the Efficiency and Reform Group within the Cabinet Office, which is looking at a variety of potential changes to civil servants' terms and conditions, one of which has been the question of redundancy compensation terms, quite a difficult and controversial matter.

Q162   Chair: Do you think that's what that is referring to?

Geoff Lewtas: It sounds more like it than something that is just relevant purely to the NDPBs, frankly. We think it is something wider; civil service­wide.

Chair: In the words of Jonathan Baume, we will have to ask Francis Maude.

Geoff Lewtas: Indeed.

Q163   Chair: And finally, do you think consultation should be in the Bill? Because it isn't at the moment. Is that a quick yes from all of you?

Dai Hudd: Very much so, yes.

Chair: Thank you very much. Moving on, Mr Halfon.

Q164   Robert Halfon: The Government's three tests of impartiality, technical expertise and independence regarding their decision to abolish some of these quangos or NDPBs: what do you think of these tests?

Charles Cochrane: I think we think there is nothing new in them. These tests in some shape or form have been around for a long time and I think it formed part of the thinking that has gone on in government over many, many years about when such bodies are set up. It is worth saying, isn't it, that some of the NDPBs have been around for a very long time and have always been subject to a process of government in setting them up. Even the British Museum, which is an NDPB, or a quango if you want to call it that; there was a process that the Government went through—admittedly a long time ago—to determine why it wanted to set up the British Museum, in the same way there would be a process that government went through when it set up the Civil Service Appeal Board or when it set up the Audit Commission. Similarly, there have been processes of reviews of NDPBs for many years. At one time—it may not continue at the moment—there was a formal process of quinquennial reviews of all NDPBs, and very searching they were, too. Certainly for some, that continues. I know I have mentioned it three times already, but the Civil Service Appeal Board, which it has been announced will be abolished, was subject to a quinquennial review in the early part of this year that it came through with flying colours.

Q165   Robert Halfon: And do you think that the Government has actually adhered to the three tests it has set itself in deciding which quangos are to stay and which are to go?

Geoff Lewtas: I do not think we know the answer to that question, because although they have said what the tests are, they have not explained in each case how those tests have been applied, what the thinking in relation to the specific functions of a particular body is or how those tests are relevant to that body. Clearly some of the tests are not relevant to all the bodies, because there is such a variety of them and a whole range of different functions are carried out. But I think that goes back to the question about consultation; that has not been sufficiently thorough from our point of view, because we are not clear how each of these tests has been applied in the way it has. You can use an example like the Gangmasters Licensing Authority, where it was said, "Yes, that carries on, because impartiality is required", but that has not been explained and it leaves you thinking, "Well, how has that test of impartiality been applied to some of the other examples where decisions to abolish or close have been made?"

Q166   Chair: So is this a general view, that there is not enough definition to these tests?

Dai Hudd: I do not think there are enough definitions. I think the other thing the Minister has not set out is what the process is for testing the definitions and who or what will be the organisations that will test those. One of the things we would want to consider is whether it is an appropriate mechanism through the Select Committee process to test not only the criteria but the organisations against each of those. I don't think it would be right if a minister has sole discretion as to how they are defined and how they are applied.

Jonathan Baume: The problem is—on the point that was just being made by Geoff—that this is such a diverse range of bodies, from very small committees to very long-standing national organisations like, say, the Land Registry, to things like the Civil Service Appeal Board that Charlie was just mentioning, et cetera. It is a complete hotchpotch of different types of organisations, which in itself I think is an illustration of part of the problem; that we have allowed, if you want, the accretion of arm's length bodies—whatever acronym you want to use—with all kinds of odd structures and accountability lines.

In one sense, this is a very long overdue exercise, and it was about time somebody sat down and went through this map of all kinds of bodies and said, "Do we need this? Has it gone past its point of adding any value?" and just stood back. Now, you can criticise the process by which individual institutions were judged, as Dai and my colleagues were just saying, but I don't think it takes away from the fact that somebody needed to go through this enormous wealth of bodies.

Actually, we can argue about aspects of the definitions of the three tests that were used, although the danger is you end up with so many different alternative tests that it is hard to take decisions. I think part of the point for me also comes back to our need to be using those tests to set bodies up in future, because I think part of the problem was both the Conservative Government in the 1990s and the subsequent Labour Government often set bodies up without a great deal of thought that then just continued with a life of their own; functions mutated, changed and expanded. So the exercise in itself was, I think, a very valid exercise, even if you might have criticisms about particular decisions that were taken. If I may say so, I think if the Select Committee can hone up what the tests ought to be for the future, that will help administrations decide whether bodies should continue or whether new bodies should be set up in the first place.

Q167   Chair: May I just pitch in? You are saying we should have a set of our own tests. What tests do you propose? It may be too long an answer—I don't want a very long answer at the moment—but I would invite you to submit what the tests should actually be.

Jonathan Baume: We will give that some thought. I have to say personally I think they are broadly the right kind of tests, because I think the danger is you end up with too long a checklist and try to make it too complex. But in the end it is going to be a judgment: do we think a particular function is better placed within the core of a department—then you get into the issues about accountability that I know the Select Committee has been looking at—or is it better that it is at arm's length from the minister and the department and fulfils an independent function? And what are the tests for making it independent of direct ministerial control?

Q168   Chair: Okay. But the particular test about technical capability and expertise; why is that a test? There are expert committees in departments; there are quangos that have been maintained because they have technical expertise. Why is this a test? How is it a test?

Dai Hudd: Well, part of the problem is that the Government does not have sufficient scientific engineering expertise within its own ranks and therefore has to refer itself to various advisory bodies to get that independent scientific advice. Coming back to the tests, I do not think it is the tests; it is the how and who does it. One of the criteria ought to be whether the Government has the right scientific and technical expertise at its disposal, either in an arm's length body or within the ranks of its own civil servants, to be able to make good policy. That is something I think could be well tested in the Select Committee structure, which is very much dealing with the policy issues as well.

Q169   Robert Halfon: The Government have denied that the primary consideration in getting rid of some of the quangos is cost-cutting. What is your view about that?

Charles Cochrane: The feedback we are getting from our members in some of those bodies that have already been announced as closing—the Audit Commission is one; Becta is another; the Commission for Rural Communities is another—where it is already clear there is going to be significant cost in relation to redundancies, is that there are ongoing costs in many cases and it is very difficult, certainly for the people working there, to see where savings are going to come anywhere in the short term, particularly when it also appears that some of the work is going to carry on in other places. So, picking up a point a number of colleagues made, in all this process there really seems to be a lack of transparency as to what the real reasons for closure were and what the costings are going to be. I have to say, the perception of our people is that in some cases, these are very arbitrary decisions that have been taken.

Q170   Robert Halfon: Mr Baume, you smiled when I asked that question.

Jonathan Baume: Well no, because I agree. I think it is very hard to define clearly what the cost savings are. In a sense, England—and many of these are English bodies—is somewhat behind the loop here, because both the Scottish Government and the Welsh Assembly Government went through a similar process; certainly, in Wales, I think it was about three years ago, and quite a number of arm's length bodies were brought back into the Welsh Assembly Government structure. That is fine, although you get people issues and anomalies if people were brought in on higher pay, and all those second-tier issues that departments have to struggle with. I think it might have made a simpler structure and at times it might be easier for the public to understand, but I have never seen an analysis, if one was done, of what the savings were in either Scotland or Wales; that would be an exercise on a smaller scale but with a similar objective.

Q171   Robert Halfon: And have you made any estimates of the number of jobs that you estimate to be lost under this?

Geoff Lewtas: We think, in terms of our own membership in PCS, there are probably something like 30,000 across what is actually a whole range of large and small bodies of this type. Of course, not all of them are being abolished or closed, but quite a number are. So our estimate is running probably into the thousands of potential or actual redundancies. This is happening at a time when, of course, the Spending Review announcement last month tells us that civil service main departments and agencies are also facing large staffing reductions in the course of the next few years.

Chair: Hang on just a minute. Can we deal with redundancies later, because it comes later in our questions? We need to deal with the Bill.

Q172   Charlie Elphicke: Yes. On clause 8 of the Bill, there are two other tests that have been proposed: achieving increased efficiency and effectiveness, and securing the appropriate accountability. Are these the right measures for taking a decision on the fate of quangos?

Geoff Lewtas: I certainly think there are some issues that cause us concern about the question of the minister having due regard, as the Bill suggests in clause 8, to efficiency and effectiveness. I will take one example; it is one I have touched on already—the closure of the Regional Development Agencies. A problem that looms very large and soon is the fact that European development money, which is channelled through the Regional Development Agencies at the moment, will presumably in future be handled through the local enterprise bodies that are envisaged. But they are not set up; they have to be set up, they are going to have to get accreditation and it is likely to take some time before they are recognised by the European Union as an acceptable organisation to deal with. There is a serious risk of hundreds of millions of euros in development money being held back and possibly not being made available in the eventual situation that we are currently facing. That seems to me to be a pretty dire consequence, and it is a very serious risk that does not seem to have been taken into account. There will be, if things do not improve, a really hard consequence financially as a result of these changes.

Chair: Okay. Unfortunately, we are very short of time, and we are going to have to have shorter answers. I am very grateful for the full answers you have been giving us, but we are going to have to speed up to get through all the material that we have. Your final question?

Q173   Robert Halfon: Yes. You proposed an independent analysis of the net economic costs and other costs of abolition itself. Would this be in addition to the efficiency, effectiveness and economy tests proposed by the Government in the Bill, or instead of them?

Dai Hudd: Well, in our submission, one of the areas we quote as being a problem for simply applying these criteria is the Forestry Commission. We find it very difficult to see how issues such as efficiency and effectiveness—which usually are code for costs and being able to cost things, but not necessarily the value—apply to areas like wildlife conservation and water management. Those are critical issues that the Forestry Commission has responsibility for right across a wide geographic and national area. How is that to be maintained if the Forestry Commission were to be broken up or in some way taken away from where it currently is? How would you use those measures to say overall whether that was a good decision or not?

Q174   Robert Halfon: And should accountability be part of this analysis or not?

Jonathan Baume: Yes, absolutely. A key issue has to be accountability. Accountability to whom is always an issue. I think there will be certain issues around which in the end, regardless of any legal status, the minister responsible will be held accountable and responsible, both by the public and by the media. That cannot be dissociated from where a function rests, and therefore that is an entirely appropriate test to have, as well as the accountability to any wider group to whom that body provides some kind of service. Sometimes that will be the general public; sometimes that might be a very specialist community. But I think part of the whole debate about arm's length bodies has always been about accountability.

Chair: Very briefly.

Q175   Robert Halfon: My very final question: some people have described the cull of the quangos as more of a barbecue on a damp Sunday afternoon than a bonfire. What is your view?

Charles Cochrane: Certainly, if does not look like a damp squib to those who work in one of these organisations, including some of those that may be continuing but will be very worried. There are very real issues, both about people's employment and about the services they provide. So I think from our perspective and the perspective of users, these are seen as very important issues indeed and certainly not a damp squib. Perhaps I would prefer it if it was a damp squib.

Chair: I think we take the impact this has on people's lives very, very seriously. Mr de Bois.

Q176   Nick de Bois: Yes, thank you Chairman. My questions focus entirely on that. We did start to touch on it, but could you very briefly tell me whether each of you has made a formal assessment of how many jobs may be lost?

Jonathan Baume: I haven't, but it is very, very difficult to get to grips with that, because some of the functions will be transferring into departments. People will follow them, but I think most people do not yet have clarity. In the regional bodies, for example, people have, if you want, a parent government department. They return to that department, and in a sense then become part of a wider pool in a department. The department itself may be losing jobs, but they won't know as individuals whether they are the people who will actually go. So this is quite a complex process.

Q177   Nick de Bois: Is that true of all of you?

Dai Hudd: My organisation, which tends to represent the more specialist grades within the Civil Service, estimate that as a consequence of what is planned for the quangos—as you describe them; we would prefer to call them arm's length bodies and NDPBs—the figure is between 3,000 and 4,000.

Charles Cochrane: To give you a specific example, if you take the Commission for Rural Communities, which I think is one that has already been announced for closure, it looks like about 80% to 90% of the staff will be redundant. A small group will probably transfer in some shape or form back into Defra, and that seems to be a similar pattern in Becta. The overwhelming majority of staff face redundancy; a small group are likely to transfer back into the main department.

Q178   Nick de Bois: Mr Baume, I take your point about the greyness of it, because we are talking more about introducing transparency and accountability, and are therefore shifting to some departments, et cetera. I understand why that is difficult. That effectively sounds like slightly more moderate language than was initially being used, when the phrase "bonfire of quangos" was being used. Would you say that it is a fair statement that now that we are looking closer—indeed, I accept that we need more clarity—perhaps some of those earlier statements were a little alarmist?

Dai Hudd: Can I answer that in a slightly different way? I think it is very regrettable that some very senior ministers decided to use some of the language they did in relation to organisations where people do valuable work and feel they are valuable public servants. For example, on the Government Offices, this is a quote from Bob Neill at the time: "It seems quite literally that the Government Offices for the Regions were taking the taxpayer for a ride. They were living it up at the taxpayers' expense while thousands of households were struggling to make ends meet." With the greatest will in the world, for many ordinary civil servants in the regions doing valuable work—go around the North West, for example, in particular, which I know quite well, where the Regional Development Agency have done a superb job in supporting the local economy—officials and ministers speaking in that way is highly offensive and I think unfortunately the language of this debate was very coloured by some of those unfortunate very early statements.

Q179   Mr Walker: You did say senior ministers, though. With the best will in the world, Bob Neill is not a senior minister. Can you give some examples of senior ministers?

Dai Hudd: Well, we can come back with even more quotes. I have only used that one as an example; I have written to Bob Neill specifically on that issue.

Q180   Chair: I know Eric Pickles referred to "form fillers and bean counters". Is that the sort of language you are talking about?

Dai Hudd: It is, very much so.

Chair: Moving on.

Q181   Nick de Bois: Yes, I will move it on. I think the point I am getting to is this: do you think, now, that we are past that stage where, I suggest, emotive language might have been used on both sides, and that we are getting to a more rational look at what may be happening in terms of future job losses? As you say, Mr Cochrane, we really are talking about people's lives here, so do you think you are heading towards that, and that you are getting more clarity?

Geoff Lewtas: Can I try to answer that very briefly? I think that what we have seen with the announcements about what is happening to a whole range of different bodies is that there are a variety of solutions. Quite a lot are a case of moving the work into a government department and there are consequences about costs in relation to that that are difficult to judge. But there are still, I would say, some really stark examples of bodies that are being closed down, effectively, with no real decisions yet as to how any of those functions are going to continue to be done in some other way, if at all. All of that is extremely unsatisfactory because of the lack of what I would regard as proper consultation and thinking through of consequences and impact.

Q182   Nick de Bois: One more area: have you been able to explore the impact outside of London and the South East on possible job losses? We have talked about areas where civil servants are working outside London and the South East; that is quite important. Have you been able to make any assessment in your opinion of what that might be like?

Charles Cochrane: Yes, certainly. The obvious one, of course, is the RDAs, which are based throughout England in the regions, but there are a number of others. Becta and—let me get the acronym right—QCDA—I think I have that in the right order—are both based in the Coventry area, so there is a significant impact there.

Jonathan Baume: The General Teaching Council is there as well.

Charles Cochrane: The General Teaching Council is there.

Q183   Nick de Bois: Would you make an assessment where you are looking at the split perhaps more accurately? Is that something you will do—or can, should I say, do at this stage?

Charles Cochrane: It is difficult to do it at this stage, but of course many of the organisations—if I could use the Audit Commission as an example—have their headquarters in London, of course, but their staff are based throughout the country. The Forestry Commission, which someone has mentioned, again has its headquarters in Edinburgh and is based around the country. Just as an aside, it is also worth saying that of course a number of the organisations we have mentioned today are not by any definition, even if I liked the word, quangos, because they are actually part of the Civil Service. The Government Office network is part of the Civil Service—

Jonathan Baume: The Land Registry is civil service.

Charles Cochrane: The Land Registry is civil service; the Forestry Commission, whilst it's one of those interesting organisations, is, again, a part of the Civil Service. So the questions about accountability are very strange in that context, because they have exactly the same accountability as any other department of state.

Chair: I think we will come back to that. Mr Flynn.

Q184   Paul Flynn: I think we all see this as a piece of the crowd-pleasing, headline-grabbing moves that new governments do, particularly the Tea Party wing of the present Government, or the Daily Mail­influenced wing. They know that civil servants are not popular—they have done so much to denigrate them over the years—and quangos are not popular, and the idea is that we get rid of them and we achieve paradise on earth. Can you see elements of political spite or malice in this? I am thinking of the Agricultural Wages Board that is to be abolished, which protects the very low wages of agricultural workers who are very poorly organised. At the same time, landowners and big farmers are having their income not only maintained at £3 billion a year in public hand-outs, but actually increased by about 3%. Do you think there is a political agenda there?

Charles Cochrane: Yes, there is always a particular agenda. Political agendas are not necessarily bad things, of course, and I think all of us would accept that any government has the right when it comes in to make changes. I think the point we are trying to make is that there should be a rational, transparent process to do it, and in making those decisions there needs to be an understanding of what the impact will be both upon the staff who work there and upon the services that are provided. On the Agricultural Wages Board, I am conscious that there are a whole series of wages boards that were established many years ago that were largely abolished by the previous Conservative Government, but there was a specific case made for retaining the Agricultural Wages Board, for reasons that most people understood at the time, and it seems odd that that has now been overturned. I am not an expert on the agricultural industry.

Chair: Well, it was before the national minimum wage, which is now part of the landscape.

Q185   Paul Flynn: Well, that does not seem much, if all they can rely on is a national minimum wage. These are skilled workers. Let me take another example. If any advisory group well deserves to be abolished, it is the Advisory Council on the Misuse of Drugs. The previous Government sacked the Chairman because he was caught in possession of an intelligent idea, and he has gone off and formed his own committee of independent people who are advising on drugs and not acting as poodles for the Government. Do you think the reason they have clung on to this discredited group, and possibly got rid of the Audit Commission, is that they saw the Audit Commission as being a thorn in their side and the Advisory Council on the Misuse of Drugs as being an obedient lapdog?

Geoff Lewtas: I think you really ought to put that question to ministers, frankly.

Paul Flynn: I think we should.

Geoff Lewtas: But I understand the point that you are making, and one of our big concerns is about the fact that in changing the nature of a lot of these bodies, in some cases—which I will not go into now—you see in them a future failure for ministers to get the kind of independent, impartial advice on a range of matters that ministers ought to be getting. Even if it is controversial, even if it is difficult to hear and deal with, they should still be getting that advice, or there should still be that service provided by bodies that are independent and impartial and have, as Dai says, the necessary scientific, technical engineering knowledge to be applied.

Q186   Paul Flynn: To give a real example of the damage done by taking jobs out of areas of high unemployment, say 250 jobs were going; it is a serious threat. It will save £2 million to the Government; it will cost £3.5 million in redundancy; it will probably cost another £3 million, which would be continuing, in welfare payments, dole and so on, for the foreseeable future because people are not likely to be reemployed in areas of high unemployment. Do you think that this process is being carried out with a disregard for what has been accepted by all governments of the past 50 years—that it is desirable to take jobs out of the South East of England and relocate them in areas of high unemployment? Has that been taken into account, do you think, when the quangos are being destroyed?

Geoff Lewtas: I would be astonished if that sort of wider balance sheet has been considered, and if there has been a longer-term look at the financial consequences. We have seen nothing of that as far as we are concerned.

Q187   Chair: So in terms of the cost-benefit analysis, you do not think there is any process by which, in submitting these plans to a department, the department has to assess the on­cost to the benefit system and the likelihood of those people being re-employed?

Dai Hudd: Well, the Audit Commission example—and we give you figures in our submission—would tend to suggest that has not happened, because the claimed savings from the Audit Commission closure by Eric Pickles were £50 million. The consequence of making people redundant and the retirement costs are probably going to exceed £200 million. That being said, we are not putting forward to you a proposition that arm's length bodies are in some way ways of keeping people employed, regardless of what they do. We are not saying that. What we are saying is that the first principle is issues of accountability, that should be addressed, of course. But when it is put forward as an argument that there are cost savings where there are not, that should be exposed and the accountability of ministers for their decisions should be explored.

Q188   Chair: But that is an argument about cost savings, rather than the review of NDPBs, because the minister himself says that this is not a cost saving measure; it is about accountability.

Charles Cochrane: If we were to be cynical, and of course we never are, the minister seems to have been saying that more in the last few days than at the start of this debate. When the early announcements were made initially—not by the same minister, but in education, shortly after the Government was formed—there was no evidence that the decision to shut down Becta, which I keep returning to, was anything to do with accountability. It just seemed to us to be a snap decision based on no evidence whatsoever.

Q189   Mr Walker: What is Becta?

Chair: For the record, tell us what Becta is.

Charles Cochrane: I thought someone was going to ask me that question and I am going to struggle.

Geoff Lewtas: British Educational Communications and Technology Agency. It handles, largely, the provision of IT for schools. That is one of its biggest functions. Just by way of a comment, we looked with interest at the report that had been commissioned from Sir Philip Green, and a lot of what he said in his report was about the need for central procurement for the whole range of government services. Here we have a decision with regard to Becta where you are just taking away that central support function, in terms of procuring IT for schools. Heaven knows, there are going to be 1,000 different contracts now, each school determining what it wants—what software, what equipment, et cetera. How much resource will that take up, in terms of educational costings?

Chair: Well, we are going to look at IT and government; it is a different story.

Geoff Lewtas: But it is a question we cannot answer.

Chair: There may be a different story. Mr Flynn, you were finished?

Q190   Paul Flynn: Just on the triennial review, do you think this is an adequate mechanism? I think we would all agree that there should be changes and savings where they can be made. Mr Cochrane, you have forecast pretty serious consequences of this action. Have you done a proper, rigorous analysis of how things will turn out in education and so on as a result of the disappearance of some of these bodies?

Charles Cochrane: I think it would probably be fair to say it is work in progress. It is obviously an area where we need to talk to our colleagues in the education unions and so forth to determine the impact, but certainly the preliminary analysis seems to suggest that there must be a risk that in years to come, someone is going to come along and say, "We really need to set up a new body to look at x and y," and that has happened before. Going back to Philip Green suggesting there ought to be coordination of government purchasing, some of us are old enough to remember that there used to be a body called the Crown Suppliers that did just that, which was abolished, and now we seem to be advocating setting it up again. But these things always go round in circles.

Chair: With respect, we are not discussing procurement, though I accept that was a procurement agency you were talking about. Moving on, Mr Roy.

Q191   Lindsay Roy: Good morning, gentlemen. Transitions, euphemistically, are times of challenge. What discussions have you had with departments about the transition period and how it will be managed? Have you had any discussions at all? Are there any plans to do so?

Charles Cochrane: Just to pick one example, if I may, the wind­up of the RDAs is particularly complicated because there are a very large number of them and we are pressing BIS to try to have some coordinated discussions with them about some of the consequences flowing from it, because to try to have 11 different discussions about the same issues with all different RDAs taking slightly different discussions about their wind­up periods does not strike us as a sensible way of proceeding at all. So very clearly, while none of us wants to be in this situation, where the department has got engaged in the process of wind-up and is participating in the discussions—and there are examples of that—it certainly helps the process. It is not something that departments can or should walk away from; they have a responsibility to be active participants in the process.

Q192   Chair: So when you say departments, who actually is responsible for the transition?

Charles Cochrane: I think it would depend on which department it was.

Q193   Chair: Take RDAs, for example. Is there somebody in the department who is responsible for the transition?

Charles Cochrane: Yes.

Q194   Chair: There is? So there is a mechanism?

Charles Cochrane: Yes. It is sometimes not as clear in some areas as others, but yes, there will always be someone at a policy level.

Q195   Chair: That would seem to be good practice, wouldn't it?

Charles Cochrane: Yes.

Dai Hudd: Particularly where they are geographically dispersed.

Charles Cochrane: Yes.

Q196   Lindsay Roy: Are there areas where there is a complete vacuum at the moment?

Dai Hudd: I think we could probably provide you with a list.

Chair: Well, if you could alert us to any case where you feel the transition is not being properly managed, that would be very helpful.

Dai Hudd: Yes, okay.

Chair: Mr Roy, any more?

Q197   Lindsay Roy: Yes. One of the key findings in the report, "Read Before Burning", states that "Good performance management is essential for effective arm's length government, yet Whitehall's capability in this area is particularly weak." Do you agree with that assertion? Have you any evidence to support that claim?

Jonathan Baume: The performance management of the organisation?

Lindsay Roy: Performance management within Whitehall.

Jonathan Baume: Are we talking about the performance management of staff or the performance management by the sponsor department of the quango?

Lindsay Roy: Performance management of staff. If it is weak, what can be done to enhance it?

Charles Cochrane: I do not think necessarily it is weak. The Civil Service and NDPBs all have staff performance appraisal systems, as do all big organisations. We have all at times, as unions, been critical of the detail of some of those systems, but I think we all sign up to the fact that performance appraisal is something that should exist. I do sometimes think the time and effort that goes into it does not necessarily match the outputs that come out of it, but that is a separate topic.

Jonathan Baume: I do not think there is something that is systemic to the Civil Service that is not there in most large organisations in the public or the private sector. I talk to people in the private sector and they will say, "Actually, we are not that good at performance management". I think it is one of those issues that threads right the way through people management across the whole economy, and it is something that some people are good at and some people are not good at, and organisations are constantly testing, trialling and amending their systems to do it. But I think it is just one of those very, very difficult issues about managing people; how do you do it in a way that gives good performance appraisal, gives good feedback and gives people a chance to understand where they might be going wrong and improve performance? There is bookshelf after bookshelf full of tomes about how to do this, and I do not think the Civil Service is any worse or any better than others; it is just an issue that is constant for larger organisations.

Dai Hudd: I think also it would be wrong to put all arm's length bodies into the same category as the Civil Service. Some of the reasons why they are arm's length is because they are much closer to the user groups and therefore, if you like, a critical analysis of what they do is more readily identified. Many of them have very rigorous financial regimes, which the core Civil Service doesn't have in the same way. Many have business planning processes, some of them independent boards, often appointed by the minister to oversee their work. So I would argue that for some NDPBs, there is a greater degree of scrutiny of performance and operational performance than you may see in the mainstream Civil Service, but it is very much a mixed bag.

Chair: I think we are moving off the subject of transition.

Q198   Lindsay Roy: Yes. But it is not a blanket approach, in essence?

Jonathan Baume: No.

Lindsay Roy: Thanks.

Q199   Chair: Moving on? Actually, before we leave the question of transition, do you think people tend to underestimate the legal complexity of moving around the deckchairs?

Jonathan Baume: Sometimes, without a doubt.

Dai Hudd: Absolutely. If I can use a specific one—I have used it about four times already—in the case of the Civil Service Appeal Board, there are potentially quite significant legal issues arising from that, because the right of appeal to the board may well be a contractual entitlement contained in civil service staff handbooks.

Q200   Chair: And there is the cost, even if people are not made redundant, of including people into different terms and conditions of employment and different career structures.

Jonathan Baume: Yes, that was very much the experience in Wales in particular.

Dai Hudd: Yes, it was.

Q201   Chair: So do you think the savings that this review promises are actually going to be delivered?

Charles Cochrane: I doubt it.

Geoff Lewtas: I think in a lot of cases the answer will be no. There could be additional costs in a range of cases.

Charles Cochrane: Unforeseen costs, yes.

Q202   Chair: Okay. Moving on, we are going back to the subject of accountability. Do you think there is a difference in the quality of accountability that a minister experiences for what goes on in his own department and for what happens in an arm's length body? Is there a different degree of accountability? There seems to be a very strong argument; the Minster is saying that if you include something in a government department, by definition it's more accountable. Do we accept that?

Jonathan Baume: I would personally accept that as a matter of principle, but that is about the whole structure of Parliamentary accountability, isn't it? It is this wider issue. If an issue arises in a department, there are very clear lines through the Permanent Secretary as accounting officer, through the minister answering on the Floor of the House and through Select Committees. With the best will in the world, that is not going to be there in the same way with an arm's length body, even though the chief executive or the chairman of an arm's length body might be summoned before a Select Committee. But the mechanism works differently, and I think one of the problems of the arm's length body structure has been the extent to which it is publicly accountable for performance, for delivery, et cetera. So I think there is a rational argument there, and if there are weaknesses in ministerial accountability, that is a whole other debate that I know this Committee has, in the past, at times turned its attention to.

Q203   Chair: But from the perspective of opposition, I personally have sometimes felt that the Government is fielding the chairman or chief executive of an NDPB to take some political flak for what is essentially a political choice of the Government's.

Jonathan Baume: Which was the point I was making earlier, that there are times when actually, if the minister is the person in the end who is going to be held accountable and should be held accountable, then the function should be clearly integrated within the department, so that in a sense, the minister can take the responsibility one way or the other if things go wrong: it is the part of the department and it is the responsibility of the minister in the end to be accountable for that. You cannot offshore the blame to an arm's length body, but at the same time, if the arm's length body fails spectacularly, as occasionally happens, and the minister is in the end going to be held to account for that, why should that function not actually be directly accountable through the minister?

Dai Hudd: I think it depends as well on what the issue is. Can I give you two examples where so­called arm's lengths bodies can be catapulted right to the centre of the political stage? The first is the Environment Agency in the flooding in Cumbria that happened just over 12 months ago. They were very much in the spotlight, in terms of the rapid response and what had happened previously to it. So there is an example of an arm's length body really becoming central to the political process. The second one is Defra and animal health. In the foot and mouth outbreak, Debby Reynolds, who was then Government Chief Vet, pretty much was the person put forward by the Government to respond to questions from the public. It was interesting in the polling there, because Debby Reynolds gave a greater degree of confidence to the public than did the minister at the time. Those are two instances where arm's length bodies can appear arm's length, but in reality, when something happens out there, they rapidly become central.

Q204   Chair: But scientists generally are much more trusted than politicians, aren't they?

Charles Cochrane: It would not be for us to comment on that.

Dai Hudd: You could have a whole range of a debate on that. I would naturally agree with you, given the background of my union.

Q205   Chair: I don't think one can draw any particular conclusions from that. But do you think Select Committees hold NDPBs accountable effectively?

Charles Cochrane: I don't think it is done in a terribly structured way. My sense is—and I think you will be more of an expert on this than perhaps I am—that while there are ad hoc occasions when NDPBs are invited to come and give evidence on a specific thing, it doesn't seem to be done in a systematic way as a process of holding them to account.

Q206   Chair: Well, when I was on the Defence Committee, we were under an injunction to do one or two agencies per year. Did we really want to do the Army Base Repair Organisation? Why should Select Committees be bogged down in scrutinising public bodies when they feel they have more important things to do?

Charles Cochrane: Of course—Dai will know this better than I—the Army Base Repair Organisation is actually part of the Civil Service and therefore is accountable through the minister.

Q207   Chair: So it is not an NDPB.

Charles Cochrane: It is not an NDPB. But if one were to take the Learning and Skills Council as an example—it is safe to take it, because it does not exist anymore—something that was dispersing £10 billion-worth of government money each year, it would seem to make some sense that it should be reporting and held to account on a fairly regular basis because of the scale of money. It is not an argument about whether they should be an NDPB or not; it is simply saying, "If you are spending that amount of money on education, then somebody ought to be holding you to account," and Select Committees seem a good way of doing it.

Q208   Chair: Could be done better.

Charles Cochrane: Yes.

Chair: We need more staff. Mr Flynn.

Q209   Paul Flynn: What is your understanding of the reason behind the decision to reconstitute some of the advisory committees as internal departmental committees of experts, while others retain their status? We're seeing a collapse in the Government's confidence in this Bill and they seem to be using accountability to sugar the pill. But do you think the idea of reorganising them is going to produce a real improvement?

Geoff Lewtas: I think that the issue here probably relates to questions about impartiality, technical competence and the degree of independence about that technical advice or other sorts of specialist advice that ministers need. These are judgments which, going back to one of the things we were saying before, have not been brought out into the open and allowed for some sort of public consultation about how—we are talking about a whole range of different types of issues here—each of the different areas of advice or concern should be properly handled. I can see that there will be cases where it's judged that it does need to be taken out of the department and handled in a more independent framework situation, as opposed to others where moving it into the department as an advisory group is something that could be more comfortable. But we need to have a debate.

Q210   Chair: It is about objectivity and impartiality, rather than technical expertise?

Geoff Lewtas: It is, looking at the painting behind you, horses for courses.

Paul Flynn: It's beyond embarrassment, that painting. We will have it taken down, I think.

Dai Hudd: I think part of the problem is that, by definition, if you bring together experts in particular topics of scientific or technical expertise, they all tend to be independent characters, although most of their work will have been peer-group reviewed anyway, so there is an accountability route in that sense. If such expert groups were made accountable to the minister, you would take away their raison d'être, because in reality, they are accountable to their expertise and advice, and they should only be accountable to that; otherwise you dilute the evidence and the information given not just to the minister, I would argue, but frankly to the public at large, on which ministers then base their judgments, as they rightly can, but that has to be done on the basis of sound expertise.

Q211   Paul Flynn: But you gave a striking example, supported by the Chairman, who said that the public trust a scientist more than they trust politicians. They trust almost everyone more than they trust politicians, but we are taking into the political arena a huge area of work for which the public have to have impartial, objective knowledge. That is going to be tainted because it won't be coming from an independent person in a white coat; it will be coming from a politician whose reputation might well be tainted. Is that a step backwards?

Jonathan Baume: But surely the challenge is for politicians to restore trust.

Paul Flynn: Indeed.

Jonathan Baume: Actually, what we seem to be going through—and this is a much wider issue—is a process by which Parliament, through one step or the other, is handing away authority, whether to judges, scientists or whoever, and who holds them to account? In the end, if we live in a democratic society, politicians have to earn and have the trust of the public through the way that they work individually in the system of the House and elsewhere. But the fact that there are trust issues is not an excuse for saying, "Okay, we will give up and just hand it over to somebody else". I think there is a time when you do put up the Chief Vet or the Chief Medical Officer because they are experts in a way that no politician could possibly claim to be, but in the end, the advice that they offer has to be taken forward through policy and government and that is what the politicians are there to do. So I think handing away the powers from Parliament and ministers is not the solution.

Q212   Paul Flynn: Would we be losing, do you think, the expertise of people who give their services usually on a voluntary basis because they want to contribute for the public good? Do you think there is any way this can be improved to make it a positive move, rather than there being the damage that looks likely to happen with the advisory bodies?

Dai Hudd: I think one of the things that would not just be very helpful but actually bring clarity to it is a proper definition, accepted by Parliament, as to what expert advisory committees do. I think that would be enormously helpful and beneficial to our whole democratic process. There is a role for independent scientific and technical advice, and I think that should be enshrined in some form of statutory protection.

Chair: That is a good challenge to the Committee and your advice on that will be particularly welcome. Briefly, before we close this session, Mr Halfon.

Q213   Robert Halfon: I just have three quick questions. Do you think that quangos should be allowed to employ lobbyists to lobby government?

Chair: Yes or no.

Jonathan Baume: Personally, no.

Dai Hudd: No.

Charles Cochrane: No.

Robert Halfon: No, okay.

Q214   Chair: Mr Lewtas, you were silent on that question. You agree?

Geoff Lewtas: I agree with my colleagues, yes.

Chair: Thank you.

Q215   Robert Halfon: You talked about the Regional Development Agencies, but would you not agree that some of the pay of senior quangocrats, if you don't mind me using that word, has spiralled out of control? To take the East of England Development Agency, the Chief Executive earns more than the Prime Minister. Do you think that is justified?

Charles Cochrane: I think there is a link between what you just asked and the point that you were making earlier about the Cabinet Office Business Plan and the work that had been signed off. I have a recollection that there was a piece of work that was commissioned by government looking at the pay of very senior staff in some NDPBs. I think what we would say is that the pay of the people who are our members in NDPBs is by no means excessive and follows very much the same pattern as what people get in the Civil Service.

Jonathan Baume: We represent some of the people in these bodies. There is the work done by the Senior Salaries Review Body earlier in the year on executive pay and there is Will Hutton's work going on at the moment, to which we have all given evidence, on pay in the round and differentials. I think there is a challenge to restore public confidence in how salary levels are set, and hopefully the Government and this Committee will be looking at the outcomes of that kind of deliberation to help ensure that we have fair structures that people understand. It doesn't mean that somebody should not be paid more than the Prime Minister, who also, of course, receives an MP's salary as well, but people should have confidence that there is transparency, et cetera. So I think there is an ongoing process there of perhaps restoring trust in some cases about how executive pay is set.

Chair: Final question.

Q216   Robert Halfon: My final question is: despite your differences with the Government on how they have done the cull of the quangos, do you accept that there needed to be some rationalisation of quangos and that some of them were not fit for purpose? Do you have any quangos in mind that you feel you do not need any more?

Charles Cochrane: No.

Jonathan Baume: I said earlier that I thought the exercise was a worthwhile one and was overdue, and I think the idea of the triennial review is a good one.

Q217   Robert Halfon: Sorry, can I just stop you? Are you saying there is not one quango that you think should have been culled?

Chair: NDPBs.

Robert Halfon: Or NDPBs, quangos and so on.

Charles Cochrane: I would be hard pressed to go through a list of executive NDPBs—I draw a distinction there with advisory NDPBs, of which there are far, far more, and I would not claim to know the full landscape there—and think of an example where the role of an executive NDPB is unnecessary. I think that is borne out by some of the present experience, where in many cases we are having to look to find someone else to do the work that has already been done by them.

Q218   Robert Halfon: Is that the view of the rest of you?

Chair: Very briefly, please.

Dai Hudd: There are several NDPBs, I think—and I include the Audit Commission in that one—that should be reformed. I agree with Charlie; I cannot think of one, other than one that advises you on how you buy your wines for the House of Commons, that could actually be abolished. But the argument about reform in some areas is quite powerful.

Jonathan Baume: I think the focus needs to be on function, not on the organisation.

Geoff Lewtas: I am quite sure, in looking at what is a very varied range of bodies here, that there are inevitably going to be questions raised about whether they need to be reformed, changed or merged, in some cases. There may be reasons for that. However, what we have found is that the whole process of putting this together has been extremely unsatisfactory in terms of the consultation and the implications.

Chair: Right, we've got that. I am sorry to cut you off, but thank you very much indeed, gentlemen; you have been very helpful witnesses. We will take a very brief adjournment before we bring in our new guests.




 
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