Session 2010-11
Publications on the internet

To be published as HC 693-i

House of COMMONS



Public Administration Select Committee

Departmental Business Plans

Wednesday 12 January 2011


Evidence heard in Public Questions 1 - 35



This is a corrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee, and copies have been made available by the Vote Office for the use of Members and others.


The transcript is an approved formal record of these proceedings. It will be printed in due course.

Oral Evidence

Taken before the Public Administration Select Committee

on Wednesday 12 January 2011

Members present:

Mr Bernard Jenkin (Chair)

Nick de Bois

Charlie Elphicke

Paul Flynn

Robert Halfon

Greg Mulholland

Lindsay Roy

Mr Charles Walker


Examination of Witness

Witness: Rt Hon Oliver Letwin MP, Minister of State, Cabinet Office, gave evidence.

Q1 Chair: Welcome, Minister, to our meeting. I wonder if you could identify yourself for the record.

Rt Hon Oliver Letwin MP: Oliver Letwin, Minister for Government Policy.

Q2 Chair: This session is about Business Plans in general and the Cabinet Office Business Plan in particular. I wondered if you could say a few words of introduction as to why the Government’s introduced this system of Business Plans, what they replace and how they will be effective, in your view.

Rt Hon Oliver Letwin MP: Thank you very much. Perhaps I could preface what I’m about to say, as you mentioned the Cabinet Office Business Plan, by saying that although I’m obviously happy to talk about that, if you want to talk in detail about the Cabinet Office Business Plan itself, the Committee might want to talk both to Francis Maude, who’s responsible for part of it, and to Nick Clegg, who’s responsible for another part of it, and I’ll come on to that point about the responsibility for the details of each Business Plan at a later stage in my remarks.

I think the starting point for understanding what we are trying to achieve, whether the Committee agrees with it or not, in the Business Plan process is the distinction between the things the Government can control, the things that are under the Government’s own control, and the things that the Government, or any Government, hopes to achieve in the wider world which are not directly under its control. The fundamental difference between the public service agreement or target driven approach to the management of the Government machine, which characterised our predecessors’ efforts in this direction, and the Business Plan approach is that the public service agreement target regime sought to establish a set of things in the external world that it was hoped Government would achieve and then sought to pull levers that somehow or other would achieve these effects. I don’t expect that every member of the Committee will agree with this assessment, but our assessment is that the defect of that approach was and remains that the levers very often have nothing at the other end; that it’s very difficult to find ways of determining within Whitehall how to make a very definitely identified thing happen in this vastly complicated and exuberantly active country of ours.

The problem that then arises is that it’s Wednesday and that somebody in Number 10 Downing Street discovers, in the previous or any other regime that tried to run that system, that something that is in their targets hasn’t happened. And so a posse of people are sent out to try to make it happen, perfectly well intentioned, of course, but you end up with, we diagnose, an array of initiatives and sudden kneejerk responses to try to create levers or transmission mechanisms where levers have been pulled and it turned out there was nothing on the other end and nothing happened.

A long while back now, four years ago or so, Francis and I first sat down to think about all this. We came to the conclusion that it would be better to try to organise things so that the Government machine had as its immediate objectives the fulfilment of certain actions that are actually within the control of Government to fulfil. I hope the Committee will accept that I am not claiming that it’s easy for Governments even to do those things that are within its control, but at least it should be possible. So we tried to think about achieving things in the external world: making schools, hospitals, police forces better, enabling our fellow citizens to conduct themselves better in local government and have more power in their lives, the other kinds of objectives we have. We thought of ways of achieving that that involved structural change-modernisation as we call it-and not micromanagement and pulling levers from Whitehall, and we then tried to work out what it is that the Government machine has within its control to do to bring about structural changes that will create frameworks within which other people in the country at large will have the right incentives to do the right things. We didn’t at all imagine, of course, that everyone would then do everything perfectly for ever after; we did think we could improve things in that way in general.

That led us back to the question of: "How can we make sure that the structural changes that we seek to achieve in any given domain-in schools, the Health Service, welfare, in local government, whatever it may be-are carried out by the Government machine if we find ourselves in the position of trying to govern?" That led us to develop a Business Plan for each Department, in draft, an idea of a Business Plan, in conjunction with the then Shadow Secretaries of State, which set out a series of actions that could be taken of an administrative kind that would create new structures and which were, in principle, within the control of Departments to bring about.

Obviously then there was the election, the formation of the Coalition and a new programme for government, which was not in every respect the same as the manifesto that we had developed as a Conservative Party. And there were, therefore, different objectives in some cases, different structures that we were trying to create, and so the Business Plans that had been produced in draft had to be redrafted and modified in the light of the programme for government that we had developed with our Coalition partners. The other thing that happened when we arrived in Government was that we had access to much more information than we had had in opposition about the steps that would need to be taken in order to change a particular structure in a particular way, and that also needed to be built into redrafted Business Plans. There were also, of course, in many cases, new people involved, because not everyone who had been a Shadow Secretary of State for x ended up as the Secretary of State for x. In some cases, of course, there were Liberal Democrat colleagues who took over positions. In others, other changes had occurred.

So the process of creating the Business Plans that we now have was one that involved the new Secretaries of State, in the light of a new programme for government, taking the earlier, draft Business Plans, modifying them, enlarging and adjusting them in the light of better information-and I think it is a thing I want to try to bring out in my remarks this morning so that it’s properly understood by the Committee, because I think it’s not widely understood outside at the moment-and what you end up with is a Business Plan that is in the ownership of, has been produced by, the particular Department. This is not an exercise of the centre, the Treasury, the Cabinet Office, Number 10 Downing Street, imposing a Business Plan on Departments. It’s a matter of the Departments themselves, the Permanent Secretary and the Secretary of State working together, producing a Business Plan that is the way in which that Department will set about achieving what the programme for government has allocated that Department as its task. But this is the product.

What is the point of laying all that out? It is to ensure that the Department in each case itself can plot a course of action and can know by what time it is to achieve what thing. It’s not rocket science. I don’t know how many other members of the Committee present do what I do each morning, which is to make a little list of all the things I’m to do that day and cross them off as I go through the day. Maybe members of the Committee are much better organised mentally than I am, but I find I have to do this in order to keep track. And this is, if you like, just such a list produced by each Department, only across a much wider terrain than any of us individually have to deal with and across a much longer timeline than we have to deal with. Many of these stretch over really quite a long period.

Chair: I didn’t set a time limit, but will you-

Rt Hon Oliver Letwin MP: I’ll bring my remarks immediately to a close by saying that that is what these Business Plans are, and I hope that they will have the effect of enabling Departments to do what one hopes to do when one sets off in the morning with one’s little list, namely to complete the list on time.

Q3 Chair: And I can’t imagine anyone would disagree with that sentiment, but would it be unfair to say that you’ve replaced topdown targets with topdown Business Plans?

Rt Hon Oliver Letwin MP: It would be not only unfair, it would be completely wrong. These are not topdown; these are in the ownership of, produced by and for the aid of Secretaries of State and their Permanent Secretaries, not the centre.

Q4 Chair: And you say you haven’t prescribed the terms of these plans for each Department, each Department writes its own plans, so how do the Business Plans help the Government work cohesively?

Rt Hon Oliver Letwin MP: Because the programme for government was devised centrally and we believe is coherent-obviously I’m more than happy to have that discussion if the Committee wants to have it-and the only rule, so to speak, about the Business Plan for Department x is that it has to be a plan that enables that Department to fulfil the commitments of the programme for government.

Q5 Chair: And does the Treasury still fulfil its more traditional role? They used to set the PSA targets. Does the Treasury still set targets of that nature?

Rt Hon Oliver Letwin MP: No, it does not. I should say three things other than just the bald "no". The first is that Danny Alexander and I work together continuously to review and discuss what’s here with Secretaries of State and their Permanent Secretaries on a quarterly basis. And we do that partly as a matter of joining together the Cabinet Office, Number 10 and, on the other side, Treasury apparatus, because it’s one of the hallmarks of this Government that we do everything together rather than in opposition to one another, which has sometimes been the case, and also because, of course, we represent the two sides of the Coalition, and indeed are the co-chairs of a dispute resolution Cabinet subcommittee of the Coalition.

The second thing I should say is that instead of setting targets, there is not only what I have been describing, which is the checklist of actions, but also the measurement of the effects. There’s a transparency machine in here, not totally developed-in the spring you will be able to see it in its full glory on the website-but basically what we’re doing is to make sure, and you can see the rough outline of this already on the website, that each Department establishes for itself the measures by which it thinks it’s fair to judge itself, both for internal and external purposes. And you will be able to see how many schools are achieving what, how many hospitals are curing people of this or that, and also what money has gone in to achieving those results, and indeed in due course, not too long I hope, you’ll be able to drill all the way down and actually find out right down to the level of the individual entity-school, hospital, police force, whatever it may be-how it’s performing in detail. So we’re trying to create a regime of extraordinary transparency, much greater than there is, I think, in any other country in the world today, where instead of setting people targets for actions in the external world, you instead make sure everybody can see exactly what’s happening, and therefore there’s a very strong incentive for those managing a particular Department to make sure that what people can see is as good as you can possibly get it to be.

Q6 Chair: So these Business Plans really are part of this what you call a power shift?

Rt Hon Oliver Letwin MP: Yes, definitely.

Q7 Chair: And you hope that these Business Plans have a public audience as well as being a tool for Government?

Rt Hon Oliver Letwin MP: Absolutely. I don’t delude myself that very large numbers of our fellow citizens get up in the morning and do nothing else than read the Business Plans. But yes, I suspect that there will be a lot of people who gradually become more and more interested in not just the Business Plans but the data about what has been achieved by each Department.

Chair: I promise you, they’re turning off the football to watch this session.

Q8 Nick de Bois: Just picking up on that interesting point about the role of transparency and public engagement with it, thinking about any Business Plan that will inevitably lead to some form of accountability, do you see Select Committees holding Departments to account? Is there a role for Select Committees in examining their success/failure criteria on the Business Plans?

Rt Hon Oliver Letwin MP: I very much hope so. Of course, it would be grossly impertinent for me or anybody in the Government to tell any given Select Committee how to do its job; that’s up to the Select Committee. But I very much hope that Departmental Select Committees will follow the lead of your Committee in taking interest in these plans and that they will take a very detailed interest in what’s in the plans, in whether the plans themselves have been fulfilled, are Departments doing what they said they would do, how well are they doing it-because, of course, the Plan only tells you whether something’s been done; it doesn’t tell you whether it’s been well done-and in due course, whether the things that are meant to have changed on the ground have changed on the ground; and then a little later than that, in some cases quite a lot later than that, whether the effect of the changes on the ground have been what was desired.

So has the Department for Education, to take an example, introduced a bill that it promised to introduce? Was it a good bill? If it was for the purpose of establishing, shall we say, Free Schools, how many Free Schools have been established-which is something you’ll be able to find out as a matter of transparency-and then, in due course, how well have those schools performed? At each level I hope Select Committees will interrogate.

Q9 Chair: I appreciate you won’t want to answer questions about a particular plan, but the Cabinet Office Business Plan, section 5.1, states: "drive action across Government to promote social mobility. i) establish a Ministerial Group chaired by the Deputy Prime Minister to drive forward action on social mobility across government-completed. ii) appoint an independent, expert reviewer to hold the Government and other institutions to account on progress in promoting social mobility-completed." These are slightly banal points, aren’t they? This is a bit like, do you remember the former Prime Minister, Mr Blair, produced an annual report to Parliament and the first time he presented it he was so easily ridiculed, "integrated transport policy-done", that they disappeared quite quickly, didn’t they?

Rt Hon Oliver Letwin MP: But there’s a difference here, which is you need to keep reading. If you’re looking at 5.1, those things have been completed, but they’re only the beginning, and it is actually there, if you’re looking at what really matters, "5.1. iv) a crossgovernment social mobility strategy," a very important thing, and then implementing that, 5.1 v, is a very important thing, and it’s in fact the Deputy Prime Minister who takes responsibility for these particular things here, and I can tell you that-not just because he’s a business man but because he’s passionate about it-he is at work on a regular basis, I have frequent conversations with him about it, trying to get social mobility. Now, social mobility’s something which, as a matter of fact, joins us all across the House; we all desire to see more social mobility, but it’s also something which governments have repeatedly found very difficult to bring about, and we are making a tremendous drive on it. It’s very helpful to have a checklist of what you’re doing.

I do hope-if there’s nothing else that I manage to convey today-that you will take away from this that we do not regard the fact that a particular administrative action has been completed as a matter of boastfulness. It is not a success to have completed an administrative act; it is a necessity as part of a process, but the success at the end of the day, coming back to my previous remarks, is, five years from now, is there more social mobility than there was originally? And that comes back to the transparency issue. This is a very carefully thought through method of trying to help Government to achieve its goals, but in the end it will be judged by whether it achieves its goals, not by whether it has done things on a checklist.

Q10 Paul Flynn: Could I congratulate you on your approach to this and voice my enthusiasm for evidence that an intelligent brain has produced this policy? Sadly, history teaches us that people caught in possession of intelligent ideas don’t survive long in ministerial office. I wish you well. I gave a whoop of enthusiasm to your answer to one of the questions in the House when you presented your report, and what you said in your speech to the Institute for Government where you talk about the abject, hopeless failure of Government’s policies on recidivism, which was the subject, but also on drugs, where every Government since 1971 have been putting in policies, none of them work and so they put similar policies in. I’m just wondering, you made the point about playing by results. Is there another policy by a Government to stop the cost of half a billion pounds jailing drug addicts when we don’t jail people who are alcoholics, for instance? Is there another side to this? What are we going to see in practical terms from your policies on crime and punishment?

Rt Hon Oliver Letwin MP: Well, I’m of course extremely conscious of your long and passionate position on this, which we’ve discussed over a long period, and you will discern that collective responsibility obtains, and I have to tell you, that the Government’s approach does not involve legalising certain substances. But there is, I think, a point of intersection between us, a point that we would very much agree upon, that the announcement that underlies what’s in here, in the Ministry of Justice Business Plan, is that one of the most important things we can do to reduce crime in this country is to take seriously the question of how, as someone comes up to leaving and leaves the prison gates, we do something to try to prevent them going back in, and, indeed, where possible, before they have got into that state, to get them out of the state that leads them in to it. And the trials that are gradually enlarging of payment-by-results based rehabilitation programmes and drug recovery programmes, and the moulding together of the work programme with the rehabilitation regime, and the creation of an alcohol recovery payment-by-results based programme, which I am currently involved with, are amongst the most important things that this Government can possibly do.

And I just want to say two other things, if I may, about it. One is the point about a payment-by-results regime is that we don’t claim any kind of monopoly of wisdom about what will work, and what we’re saying is we will pay when people don’t commit crimes, so when a recidivism rate is reduced by a provider. We’ll pay when people get back into work and stay there. We’ll pay when people are no longer addicts and dependent, and how that’s achieved will be up to each particular provider, and there will be, I think, a wide range of things tried-and actually I don’t personally attach any importance to my view of this because we’ll find out-but my personal guess is there will not be one technique that works for everybody, there will be a range. This is symptomatic of our entire approach: that we’re trying to set up frameworks, as I say, within which people get incentives to do the right thing that we all want, and then are left to get on with the job. I really hope that five years from now, even though we will probably still be disagreeing about the question of legalisation, I’ll be able to come back to you and say we really have completely changed the extent of drug and alcohol dependency and the extent of recidivism, not because we’ve pulled some levers but because people who know how to do these things at a human level have engaged with other human beings and rescued them.

Q11 Paul Flynn: A respected independent think tank has described your policies on the Health Service as like trying to resuscitate a corpse, something that hasn’t been done successfully since the time of Lazarus. If you go ahead with your polices, when you’ve failed to persuade 15% of the Health Service to go voluntarily into the funding range that you had in the previous government but you are hoping to compel 80% of the Health Service to do it on a compulsory basis, isn’t it what most independent people in the Health Service are saying, a privatisation of the Health Service, which means selling great chunks of it into the hands of American commercial interests?

Rt Hon Oliver Letwin MP: In a word, no. Clearly if the Committee wants to discuss that in depth it’s the Health Secretary that you need to have here.

Chair: In respect to Business Plans.

Rt Hon Oliver Letwin MP: But the Business Plans do set out a very substantial programme for modernising the way we do business in the Health Service, and indeed making it very much more like most of the other health services in Western Europe, where we don’t, any longer, try to run it and micromanage it from a desk in Whitehall, which is again consistent with the general theme of these Business Plans: trying to set frameworks, create incentives and then let people get on with the job. The Health Service will continue to be a Health Service that’s free at the point of care. It will continue to be a Health Service that’s universal in its scope, and we very strongly believe that the only way that we can enable the Health Service to meet the increasing demands year by year that are being placed upon it, against the background of what is a very special settlement, namely one which keeps its funding constant in real terms, but which nevertheless is much less large in its increases each year than it had been in the last few years. The only way we think we can put those two things together is by creating a set of incentives and relationships that give people very strong incentives to get the best possible value for money, and that’s what we think we are going to achieve. I think all those are common goals. I don’t say that everybody agrees about the mechanism, but I don’t think that there is a deep ideological rift here about how to manage the Health Service.

Q12 Paul Flynn: We were reminded last night that Stanley Baldwin referred to LloydGeorge as a "dynamic force", which he regarded as an offensive remark to make against him. You’ve been accused of Maoism, because of your revolutionary zeal to throw all the pieces up in the air, and hopefully they come down in the right way. There seems to be a naïve belief in these Business Plans that you will bring out the best in people. Isn’t there a likelihood this greater freedom you suggest is likely to bring out the worst in people, the greed and the selfishness? Speaking as a Maoist, of course.

Rt Hon Oliver Letwin MP: I suppose I do believe, on the whole, that my fellow human beings are well-intentioned. I think it’s a question of liberating their ability to display those good intentions. But I think it is very important both that they have the right incentives. So we’re not relying on, to go back to the earlier discussion, a provider of drug recovery services to get up in the morning and passionately try to help people recover-though I think many of them actually do that-on their own, because we are saying, if you want to get paid you have to produce a result. So there’s a very strong pull there.

But also, a great part of what’s in these Business Plans is about handing over power to communities, neighbourhoods, community groups and voluntary bodies. I think you’d be hardpressed, from whatever political tradition within the House, to deny that people in communities and in voluntary bodies and so on do tend to try to achieve for their community and for their charities, and so on, through their charities the best possible results. So liberating that energy I think is really something that almost everybody ought to welcome.

Q13 Robert Halfon: Good morning. Whilst I welcome what we would call a transformation in open governance in what you are doing, is it not more internet 1.0 than internet 2.0 or 3.0, in that the information is being put out there for the first time for the public to have a look at, but that is all they can do. There is no ability to comment, even, or have a real input into the decisionmaking process.

Rt Hon Oliver Letwin MP: Well, the first thing I’d say is that this is not the only product of Government, and each of the White Papers, the Command Papers, the Bills are going through a process of quite considerable consultation. To revert to the penultimate discussion about the Health Service, a very large number of specific documents listed in the Business Plan are being and have been produced by the Department of Health. If you read the latest command paper produced just a very little while ago by the Department of Health you will see how it goes through, very carefully and honestly, a series of things that have been said-some favourable and some unfavourable; it relays the unfavourable ones too-about particular aspects of the proposed modernisation programme, and then answers those points, and in some cases answers them by saying we have changed this or that, and in some cases answers them by explaining why we haven’t changed them. So that is an example of how things that are in the Business Plan lead to processes that lead in turn to people who are experts in an area being able to influence the direction in which Government moves precisely.

Q14 Robert Halfon: But if ordinary Mr Smith reads the Business Plan on the web, which he was never able to do before, which is a great advancement, and he feels that it’s not being kept, or that something is wrong or that he feels that he wants to know that his comments are being taken seriously, what mechanism is there under the new system?

Rt Hon Oliver Letwin MP: Well, there’s really quite a lot in the sense that the first thing is, I don’t think it is just going to be Mr Smith. Firstly, Mr Smith has rights now to write to his MP, to the party and to cause a fuss. But the problem has been that he hasn’t had much information on which to base his fuss. However, I accept it’s going to be difficult for Mr Smith to do all the work involved in looking at the data that is produced and identifying whether it’s a good pattern from his point of view or not, or he thinks it’s a job well done. And he isn’t going to have to do that, because once this stuff is out there on the web-this is the great advantage of the age we live in-all sorts of people who are nothing to do with government and may not be in any way commercial, but amateurs, but highly professional amateurs, start mashing up the data and producing comparisons and websites where you can go to, and if you’re interested in the question, "Are we doing well on schools, or police or whatever," I don’t think it will be at all long before Mr Smith will be able to go to a website and find out whether what’s happening on his street in policing, say, is good by comparison with other places, and if it isn’t, well, have we provided him with any means of dealing with it? Yes, because what’s in the Business Plan is not just that we will publish crime data street by street, crime maps, something you’re all very familiar with, but also that we will have the beat meetings so they can go along and interrogate the police, and that we take forward a series of steps to create direct election of police commissioners. So Mr Smith is now in a very different position. First of all, he knows what’s going on his street, which he’s never known before; secondly he can complain about it directly to the person, the copper who’s dealing with the street; and third, if, when he looks at the mashing up on the website, he discovers that the whole force is doing a rotten job compared with some other force, he can go and elect a new commissioner.

Q15 Robert Halfon: In essence, what I’m saying is the open government that you’re doing should be more Wikipedia than encyclopaedia.

Rt Hon Oliver Letwin MP: Well, that is the whole direction of our thought, and any suggestions the Committee wants to make about how we can maximise the interactiveness of this process, give people the greatest possible chance to take part, is something we would look at extremely seriously and welcome. What we found when we did something very unusual, which was to ask public servants what it was that they thought should be changed in order to save money in their areas, I don’t think it’s telling tales out of school to say that quite a lot of the senior figures in Whitehall were somewhat sceptical about whether this would produce any useful results, and indeed whether anybody much would bother to answer, and we got thousands of results and many hundreds of them were extremely useful, and are now being used. So we are very open to those sorts of things. Now, I want to stress that the Government is elected to govern: it’s elected on the basis of the electorate’s views of who should govern. We set out a programme for government. We are carrying that out, so the direction is something that is our responsibility, for which we will be accountable at the election.

Q16 Robert Halfon: Are you open to internet referenda, in which people would be able to judge whether Business Plans had been completed or not, or some such things?

Rt Hon Oliver Letwin MP: It’s a very interesting idea, and if the Committee wants to make recommendations of that kind we will sit down and study them very seriously and earnestly. The more openness and transparency there is, the more it will ensure that ministers and senior officials seek to make a reality of all this. In the end the paper or the website is just a piece of paper or a website. What matters is the action underneath.

Q17 Robert Halfon: Linking to my previous questions, I’m trying to really tease out, when one knocks on the doorstep, what the PostBureaucratic Age really means.

Rt Hon Oliver Letwin MP: I think it means all the things we’ve been describing. It means Mr Smith being able to find things out that he couldn’t find out before about what’s going on in his own street. It means being able to influence that, because he can be helped by a huge number of people across the net to find out whether what’s going on in his street is actually what ought to be going on in his street by comparison with other places, and other countries, and so on. It also means what you’re describing, the interactive process where Mr Smith and others make their feelings felt, and where at all levels Government and public services respond to those signals.

Q18 Robert Halfon: The theory you’ve constructed around the PostBureaucratic Age, the transparency and accountability, decentralisation and devolution and so on: what is the empirical evidence that you have that this will work?

Rt Hon Oliver Letwin MP: I think I’d say three things in response to that. First is that I think the whole history of the world, which is quite a large, rich evidence base, suggests that very highly structured command economies and very highly micromanaged societies have fared very badly, have not done well for their citizens and not lasted terribly long. I suppose as an article of faith, those of us who believe in liberal democracy rather than totalitarian dictatorship, and those of us who believe in free markets instead of command economies believe these things because we think that’s what the history of the world shows, and this is just, if you like, an extension of those principles, of open networks.

Second, I suppose the evidence has to do with an intuition about-to come back to Mr Flynn’s point-how people best come to realise their potential, and our intuition is that people are more likely to do great things, to innovate, to make things better, if they have a great deal of scope for creativity and a great deal of ability to make things happen on the ground, as long as those who do it well succeed and those who don’t fail and so you get an increasing drift towards success and therefore you have to have a framework within which that applies. Now again, I can’t point you to a study by some management consultant that proves that. It is my deepest instinct about how the world works, but I doubt it’s one that’s very controversial.

The third piece of evidence is just the degree to which people are themselves dissatisfied in not having real power over their own circumstances. I think there is a great deal of dissatisfaction registered in a great many empirical surveys that people have with the fact that they just don’t feel that they can change the shape of their own community. It comes right down to things like planning. People don’t feel they can control the shape, character, appearance and the feel of the place they live in, and part of the evidence for what we’re doing is that people are dissatisfied with command and control systems that disempower them, and we’re trying to move towards empowering them.

Q19 Lindsay Roy: Minister, I find that this is a very refreshing approach, one which I’ve used as a Head Teacher of a large school where you’re empowering people, and I think we’re well aware that we need to tap the human resource, because that’s the greatest potential we have for change. I’m interested in a couple of things that may be semantics. I still think there are targets there, whether it’s in terms of targets or outcomes, but the difference is it is targets set with people and not targets imposed upon people. Would that be an accurate reflection? The second point to pick up, in terms of the Plans I’ve seen, it seems to be more quantitative than qualitative, for example, "completed". How do we gauge that kind of information?

Rt Hon Oliver Letwin MP: The first point, I think it is certainly true that the Secretaries of State and Permanent Secretaries who have a responsibility for one of these particular Business Plans will have set for themselves, in many cases, their ambition for what the outcomes that are measured look like. I suppose in a sense I’m saying what you were saying, but the difference is that we haven’t told them what those should be, and indeed, they don’t need to disclose to us what they will be. They know that not just we, and in the end much more importantly, you, the media and the British public will judge whether the outcome is acceptable under the circumstances. After all, in the case of someone who’s running an organic entity like a school or a ship, typically the Head Teacher or the captain of the ship will have a kind of internalised set of, if you like, targets-of things that they aim at-but they know that they’re going to be judged not by that but whether the parent thinks that their child has been brought up right. I think the point is to strip away the topdown thing that says, "This is what you’ve got to aim it." That’s all we’re trying to get out of.

On the qualitative versus enumerated point: yes, you’re absolutely right, the sheer fact that some set of administrative actions are a bit late or have been done on time, while important in the sense that you can’t conduct a government unless you do things that you set out to do, is not in itself an indicator of whether they’ve been well or badly done. The indicator comes underneath the timetables where you start getting the indicators and you see what has happened as a result, and then what effect has what’s happened had.

Q20 Chair: By indicators do you mean milestones?

Rt Hon Oliver Letwin MP: No, if you look, for example, at the Cabinet Office tables, what you’ll find is that the Business Plan in the sense of the sort of timetable of actions, including the milestones at the bottom of each sheet, is one thing, but then you have a table of spending, that’s the inputs, and then you have how that measures up against other people in common areas of spending, how many employees per somethingorother have they got compared with other Departments, and then the transparency regime, which sets out an information strategy, and then a set of input indicators, the overhead costs for people participating in the National Citizen Service, for example, to see whether the thing looks like it’s value for money, and then impact indicators-this is where we start getting really interesting-how many new established mutuals are there in the public service, line one, and once you then start looking at schools or hospitals or whatever, much more interesting yet is what you see in the indicator section: how many children are prospering, how many children are getting jobs, how many children are getting five GCSEs at grade A to C and so on. So in the end what we or each individual Secretary of State hopes to be judged by is not whether they’ve taken certain administrative actions but whether they’ve achieved certain results for the country.

Q21 Lindsay Roy: But this whole approach depends on robust selfevaluation.

Rt Hon Oliver Letwin MP: Yes, that is exactly what it depends on, enforced, however, by transparency, so there’s nowhere to escape to.

Q22 Greg Mulholland: The principles that the whole Government’s approach is based on-decentralisation, accountability, transparency-are music to the ears of any liberal, and the Liberal Democrats as coalition partners clearly are very much behind these reforms also. But talking about the power shift, it’s clearly very much at the heart of Government thinking and very welcome.

Some of the ways that the Government is envisioning that being delivered I think potentially is being more prescriptive than the Government realises. For example, introducing more choice and competition over schools and hospitals; well, actually in some communities they don’t want choice. They just want their local hospital to be good, funded and very clearly in the public sector. Similarly, as I think everyone’s well aware, there are areas where there’s real concern about locally elected police commissioners, and there may well be areas that don’t want that and actually want to continue having those decisions made through police authorities and the current police structures. So is there not a danger that there is a little bit, perhaps even without realising, of being still philosophical centralisation, and wouldn’t a real power shift to communities have implications, accepting that communities may do and structure things in a way that a government of any colour might fundamentally disagree with?

Rt Hon Oliver Letwin MP: Well this is a very deep and interesting and continuing discussion within Government, as you might imagine. How far do you shift power away from the centre and create a structure within which the accountability is much more local? In a particular pattern that you set out from the centre, how far to the contrary do you say that a particular pattern that you want to establish is something which people locally can design? There isn’t a single pattern here because each case differs. So, for example we think that major cities would do better to have directly elected mayors. But we don’t feel sufficiently confident that’s a view shared in each major city to impose it, so our proposition in the Business Plan is to legislate for a referendum in those cities, which will determine whether the local population wishes to move in that direction or not. So that’s a case where, in your terms, there’s a philosophical decentralisation as well as a practical decentralisation on offer.

In other cases it’s our view that by setting up a new structure people will make the decisions as they go along. So, for example, you were saying it might be the view of a particular village or town that it didn’t want to have lots of schools; it just wanted to have one school and it thought it was a jolly good school. Well, if that’s the case under the structures that are in these Business Plans, the pupils and parents will stay at the local school and there’ll be no demand for another one and there won’t be another one. So what we’ve tried to do is to think through case by case how far is there a requirement for people locally to make a choice about whether to do something or not before they get the power, if they want to take it, to do it and how far should we on the contrary create a framework within which they decide as they go along.

Perhaps the most interesting case of all is that of neighbourhood planning, which I think is one of the most fundamental power shifts in this whole array of Business Plans. We are doing, I think, what your question would suggest we should do, which is that we’re not saying to each neighbourhood, town, village, parish and city, "You have to establish a neighbourhood plan for yourself and become, effectively, the determinants of what gets built or is allowed to be built in your area." Rather we’re saying, "If you wish to do so, you can. Here is a mechanism in the Localism Bill for you to take on that power if you wish." We had quite a lot of debate about that, because you could argue that until you tilt people into doing it they won’t discover how much they want to do it, but in the end we came to the conclusion it’s better to say that you have the right but not the duty to take this power into your own hands.

Q23 Greg Mulholland: That’s reassuring on the planning side; I don’t think there’s any single member of the House who wouldn’t want to see a significant shift in the whole planning system, but that’s obviously another issue. I think the one Government policy that jars with this whole thinking is what can only realistically be described as the imposition of elected police commissioners. Would it not be sensible, therefore, to do exactly what is proposed with elected mayors and say, "Do you want to go down that route, or do you want to continue having your local councillors on the police authority working with your local police chief?"

Rt Hon Oliver Letwin MP: Well, we decided that we should mandate elected police commissioners because we couldn’t see how we could remove the micromanagement control of the Home Office over the police forces, which is currently what happens, unless there was somebody in charge who is very meticulously and directly accountable. Now, we could have made the choice that if people wanted locally to retain a police authority they’ve never heard of, which is what people currently have, then the Home Office would continue to micromanage that police force, but in another case where people had decided to have an elected police commissioner the Home Office would cease to micromanage it, but we came to the conclusion-as I say, this has to be case by case-that that would just be too messy a solution, and that we needed to know whether the Home Office was in the business of micromanaging police forces or not. If not, we had to be sure there was someone in each place who people locally knew was in charge and came out to vote for. So that’s why we made that decision in this case.

Now look, if what you wanted to do was debate the specific merits of each choice in each particular case I would very much recommend that the Committee ask the Home Secretary to come and defend that policy, which I’m sure she would be more than willing to do. I’m just pointing out that our approach in general contained in the Business Plans was not to do one thing or another heedlessly in any given case, but to think through each particular case and ask ourselves, "Is this a case in which it will work not only to create a framework but also create a framework in which people will decide whether to have that framework or not?" In some cases we thought we could and in other cases not.

Q24 Greg Mulholland: But there will inevitably be times when a Government-and I’m not saying this is wrong at all, in fact sometimes it would be the right thing to do-will have a philosophical view and will impose it nationally across the country. Is it not better to be slightly more honest about that and say in some cases the Government does think it knows best?

Rt Hon Oliver Letwin MP: Yes, that is what we have done in this case; in the case you’re referring to we have said every area will have elected police commissioners, for the reasons I described.

Chair: Thank you very much. Unfortunately we have to finish at 11:30.

Q25 Charlie Elphicke: It’s a real pleasure to have before us a Minister who has such a grasp of the detail of his portfolio, a grasp of the money and a real sense of vision and purpose, and I congratulate you on your evidence so far and your work on Business Plans.

Rt Hon Oliver Letwin MP: That sounds like a very dangerous preamble.

Q26 Charlie Elphicke: My one slight concern and question mark in my mind is if I went onto the doorsteps of Dover and said, "Look, we are replacing PSAs with Business Plans, we are replacing targets with milestones, this is a great cultural revolution," most likely they’d say, "Come again?" If not, they might say, "Well, isn’t that deckchair shuffling?" What would I say in response?

Rt Hon Oliver Letwin MP: Well if you were to say any such thing on the doorsteps of Dover you would be a much less canny local politician than I think you to be. I think that actually the person opening the door would more likely to call for the men in white coats, and I very much doubt any member of the House of Commons of whatever political persuasion would spend their time doing that.

Look, this is not about what I have described as running a magazine. This is about running a Government, and most of the business of running a Government is, for most of our fellow citizens, very dull. It’s very important because it produces results that are not dull from their point of view. If they have a job and the economy is growing, grandma can get her hip replaced, the children are getting a decent school, police are preventing crime on the streets: that matters to people.

Q27 Charlie Elphicke: What then is the real difference between a target and a milestone, in practical terms?

Rt Hon Oliver Letwin MP: I wouldn’t worry too much about milestones. There are a few milestones at the bottom of pages, which are simply a way of describing particular actions to which we’re drawing attention. The difference between a target regime and the Business Plans is that a target regime starts with the assumption that there are things out there in the world, the things I’ve described, policing streets, improving schools and so on, that you can specify in terms of a number. By next year the number of x’s that will do y in Britain will be suchandsuch, and then that you can drive the machine, somehow or other, and make this happen, and we think that produces a mess. We think what happens is you end up with lots of people going and trying to make things happen and discovering that there are all sorts of unintended consequences. We’re saying on the contrary, no. Let’s think about the structures within which people will get on with the job and do it well. Let’s try to work out how to put those structures in place where they aren’t. Generally they will involve transferring power to people to do things for themselves. Generally they will involve making them accountable to the people who they’re serving. Let’s put that in place.

Now let’s work out how to put that in place. Well, it involves legislating and administering these things. Let’s set those out on a checklist, that’s what these things do. And then let’s measure the results, let’s see whether, as a matter of fact, it does make things better. Now that is a very different approach. It isn’t an approach I expect to be of any interest to our fellow citizens except for the people who are sitting there late at night who happen to be fascinated by it. But for most of our fellow citizens the issue will be whether it results in better results, not how we get there. Nevertheless, for the Government, of course, and for Parliament, it’s terribly important how we get there; it’s terribly important to know how we try to get there, because the job of Government is to make it happen right and the job of Parliament is to hold us to account, to criticise and to question and see whether we are doing it right, and this enables people who are engaged in that process, both inside and outside Government, to be held to account properly.

Q28 Charlie Elphicke: The other thing is you have spoken very movingly about the increasing ability of people to shape the world around them, and I agree, that really is a great leap forward, because the whole planning system does need to be made more local. But the whole Localism Bill framework applies only really to local government. Should there not be a parallel legislative regime to enable a similar level of empowerment for people in relation to central Government? Because if I go on the doorstep in Dover the one thing they’re sure as eggs to raise is, "We want to take over our port, why can’t we? We’ve got the money together." That’s a constituency issue, but I’m sure many colleagues have similar issues in their constituencies. Should there be a community right to buy, a community right to bid, a community right to contest in relation to central Government in the same way that there is to local government, or will be under the Localism Bill?

Chair: Port of Dover comes to mind.

Rt Hon Oliver Letwin MP: I had a feeling maybe that was the answer. We are at work on an open public services White Paper, which very much looks at the question of how, in relation to central Government services, we can open up the right to challenge. How can we provide enough information so that people can see what’s being done, how effective it is and at what cost by central Government services, of whatever kind? And where we aren’t having a payment by results contract, or we aren’t giving people personal budgets to use themselves, but where we’re still running it as a central Government service provided from the top, we want people to be able to say, either because they’re employees, that they’d like to form a mutual because they can see how much it’s cost and they think they can do it better for less, or because they’re a voluntary sector provider who thinks the same, and you’ll find that we’re instituting a whole series of rights to challenge and a whole series of transparency regimes to enable those rights to challenge to be real. Actually, the Committee might want to talk to Francis about the mutualisation programme because I think that’s one of the most important and exciting things we’re doing. But it goes, as I say, beyond that into the voluntary sector, small businesses and entrepreneurs. We’re very much moving in the sorts of direction that you’re describing in relation to central Government services as well as local.

There are, of course, limits. I don’t want to mislead the Committee into supposing that we’re going to have transparency in every respect and a right to challenge for voluntary groups to take over the work of the Secret Intelligence Service. It is not so. But where there are, as in many, many cases, services where it’s perfectly possible to be totally transparent and perfectly possible to allow mutuals or voluntary community groups to take over, there we shall facilitate that.

Q29 Chair: Very briefly in the few minutes remaining, what happens when a Department misses milestones? Is there some form of compliance? You say it’s not a target, it’s just a milestone, but if a Department or a programme keeps missing its milestones, what are the consequences?

Rt Hon Oliver Letwin MP: The first thing to say is we have been at pains not to disguise where Departments are failing to meet a particular timetable required. And so each month there are quite a number of reports of Departments that haven’t done something on time. We are being terribly careful not to suggest that that’s the most terrible thing in the world. It has to be made public; we’re making it public.

Q30 Chair: So these Business Plans are issued monthly?

Rt Hon Oliver Letwin MP: It’s not that the Business Plan is issued monthly; it’s that the report against the Business Plan of whether they have achieved what they’re meant to achieve that month is issued monthly, and things that they haven’t achieved show up in red. So that’s made public, but we don’t spend time getting on the blower and shouting at Departments that have decided to spend three weeks longer doing something than they would have done because they couldn’t get it into the parliamentary timetable or they wanted to improve it and so on; we allow for that. If Departments persistently miss by a long way then we do ring them up and ask them to come and have conversations with us about why this is happening. Ultimately if a Department missed by a lot by a long way all the long time, then I’m sure the Prime Minister would want to have conversations with the Secretary of State to find out what’s going on. So there’s a kind of escalating series of investigations.

Q31 Chair: But it’s not a target?

Rt Hon Oliver Letwin MP: No, we are not fetishistic about absolutely on the nail meeting-

Q32 Chair: I shall be interested to see whether the reflexes of elected office allows you to be as open as you suggest you’re going to be about missing your milestones.

Rt Hon Oliver Letwin MP: We have been for several months now. And we intend to continue.

Q33 Chair: Well, I’m very interested in that. Where you’ve delegated power, where you’ve decentralised and there is a reduction in the quality of a service, I imagine there’s a Life of Brian moment: you’re telling everybody to be individual, but of course they will still look to Whitehall for approval, and when they fail to deliver, of course Whitehall will intervene on the failing school, the hospital that’s got the high death rates, the police constabulary that is failing to reduce crime. Whitehall will still intervene, won’t it?

Rt Hon Oliver Letwin MP: No, you’re very much underestimating the amount of thought that’s gone into how these structures work, and if you wanted to ask either of the relevant Secretaries of State to come and talk to you, either of those two, they will take you through in detail, which I would be happy to do if I had the time but I don’t, how the continuity and failure regimes are working in those two cases of hospitals and schools, and how precisely they avoid Whitehall intervening. In either case, there are regimes being put in place that will mean that people who aren’t ministers and aren’t central controls come in and dispossess the management of the hospital that isn’t working right in the extreme case but keep the hospital running as a special administration regime, and then there are things that happen before special administration so precisely we don’t end up recontrolling things when they don’t work out perfectly.

Q34 Chair: And can you also explain this new concept of right to data? How does that differ from Freedom of Information?

Rt Hon Oliver Letwin MP: Freedom of Information is principally about getting papers and documents-

Chair: And statistics, and data.

Rt Hon Oliver Letwin MP: If you know what question to ask you can put in a request for a particular set of data. The difference here is that whole data sets are being made available, so if somebody specifies a kind of data set that they’d like to see open, not as an answer once, one year, to a particular request but they’d like to see something openly available, we will respond.

Q35 Chair: When I attended the government statisticians’ annual conference and I suggested that unexpurgated, unfiltered, unprocessed data should all be published, they were pretty horrorstruck that statistics capable of misinterpretation and putting untrammelled statistics into the public domain would be potentially extremely difficult and problematic.

Rt Hon Oliver Letwin MP: I understand entirely. The culture change we are seeking to achieve here is one that may require some considerable readjustment of people’s views of the intelligence of the electorate.

Chair: Unfortunately we have only this short time for this session, but I speak for all members of the Committee: I think we are genuinely enthused by this development. I personally would like for the Committee to scrutinise the Cabinet Office Business Plan as you’ve suggested, and though very little of this will be readily accessible to ordinary members of the public I should imagine specialists amongst the public will be able to access individual parts of these Business Plans and find them very useful, and I think Select Committees, as a starting point for any inquiry into any topic, will start looking at Business Plans to see what the Government is doing and how they’re measuring up against your own milestones and targets, if I may use those words. So thank you very much indeed and I think you’ll be hearing more from us on this subject.