Examination of Witnesses (Question Numbers
154-193)
Ian Watmore, Sir Suma Chakrabarti KCB and Dame Helen
Ghosh DCB
1 February 2011
Q154 Chair: Forgive
us for keeping you waiting, but perhaps you were more in awe of
our previous witnesses than we will ever be. Thank you for joining
us. Could I ask you to identify each of yourselves for the record?
Dame Helen Ghosh:
I am Helen Ghosh. I am the Permanent Secretary at the Home Office,
where I started my role on 1 January. For five years before
that, I was the Permanent Secretary at DEFRA.
Ian Watmore: I
am Ian Watmore, Permanent Secretary at the Cabinet Office, currently
leading on the efficiency and reform agenda across Government.
Sir Suma Chakrabarti:
I am Suma Chakrabarti, Permanent Secretary at the Ministry of
Justice, where I have been for three years. Before that I was
for six years Permanent Secretary at the Department for International
Development.
Q155 Robert Halfon:
What impact would you say the Big Society has had on the vision
of the Government for the Civil Service?
Ian Watmore: The
Big Society is one of several things that's changing the way the
Civil Service operates. The Government has set a number of objectives
for public service reform and delivery; the Big Society is one.
They are currently producing a White Paper to put all that into
one document, which will hopefully be published before the Budget,
and it does put a profound change on the Civil Service, because
it is requiring the Civil Service, as indeed you were alluding
to in the last session, to work with communities at a very local
level in different ways.
Q156 Robert Halfon:
Can you tell us what the Big Society means as far as you understand
it, each of you?
Dame Helen Ghosh:
From my point of view, and I will use some DEFRA examples in particular,
it means that we in government need to focus on doing the things
that only government can do, and only do those things. As a Civil
Service, what we need to facilitate is that, at the most local,
most individual level, people both identify and solve problems
in the way that they wish to solve them. For example, in DEFRA
we did a great deal of work with, for example, the farming community,
not from the centre instructing them in a paternalistic way on
how to deal, for example, with animal diseases like bluetongue,
but working with them in partnership and asking them to take the
decisions. We did the things that only Government could do, in
terms of rules and regulations, and they were the people identifying
and dealing with the solutions to the problems.
Sir Suma Chakrabarti:
Similar examples, I think: in a nutshell for us, it is about devolution
of power and accountability, and local empowerment. What I think
that leads up to though, with increased transparency as well,
is much more local design of solutions to problems on the ground,
which will mean quite interesting changes in public service.
You will be able to see different performance, for example in
Ministry of Justice areas, between different local criminal justice
areas. It will be up to the public then to ask questions of why
there is a differentiation in performance, whereas, at the moment,
it is very much up to the ministry to ask those questions, so
that will push power out much more.
Q157 Robert Halfon: I
notice that you say it is about the devolution of power, but you
do not say it is about renewing civil society, which is a core
part of that. Why is that?
Sir Suma Chakrabarti:
I think you are right; it is about renewing civil society. One
of the things that Lord Turnbull said is absolutely fundamental
to this--and it is a new task for the Civil Service, or maybe
a renewed task--is to ensure civil society does have the tools
to ask the questions that it needs to. That is quite a tricky
balance, because the Civil Service obviously wants to help skills
being developed at a local level, so they can challenge the way
things are done. At the same time, it should not be suggesting
the solutions, because then that is a takeover again. Getting
that balance right is going to be quite important.
Q158 Robert Halfon:
In a previous article, Lord Wilson wrote that part of the problem
with the Civil Service was too much centralisation by governments,
making it very difficult to run the Civil Service. Do you think
that the Big Society will actually help that and that power will
be going outwards and downwards, which will make it easier for
the Civil Service itself?
Dame Helen Ghosh:
Today's crime maps are an excellent example of how we will transfer
power through transparency, as Suma said. Once we have our local
police and crime commissioners with an elected local mandate,
the power and indeed the accountability will be transferred to
them to work with local people to solve those problems. In terms
of the challenge to us as civil servants—and I was very
interested in what Lord Turnbull said in terms of this being part
of a longerterm development—the issue for us is both
learning to let go, in terms of the levers of power, moving into
those different kinds of world, and learning how to facilitate
and, as Suma says, helping support the capacity of local people
to make decisions and form their own future.
Q159 Robert Halfon:
What limits are there to the Big Society or to how power could
be transferred from Whitehall to the grass roots, to communities
and neighbourhoods?
Ian Watmore: I
think my Minister, Francis Maude, would say that what he would
like to see happening, as well as the transfer to the Big Society
and localism, is a degree of centralisation of some of the core
business aspects of government. I think we may have discussed
in the previous session the ideas of bringing more procurement
to the centre to get bigger value for the taxpayer pound that
is spent. There are two things going on in parallel here: there
is a lot of policy devolution to the local front line, through
the ways I have just described and that were illustrated by my
colleagues here, but there is a degree of getting a grip of some
of the business aspects of government, on property, procurement,
IT and those sorts of things, which requires a more centralist
approach. He refers to that as his tightloose framework,
and I think that is probably the best description of what's going
on at the moment.
Q160 Robert Halfon:
If local communities do not agree with how you give them localism
as such and how you are going to give them more of the powers
that they are supposed to be having, what is your response to
that?
Ian Watmore: In
the generic case, politicians believe that people do want that
ability to take control of their own lives, their family's lives
and their communities around them, and that they will have the
opportunity so to do. They do not expect it equally across all
localities. It will move at different paces and there will be
different social issues and local issues that are particularly
relevant. Helen talked about the police maps today. I'm sure
that's very topical. We were all Googling this morning putting
our postcodes in just to see how many crimes there were round
the corner this week. Crime in certain parts of the country has
much more relevance than it does in others; poverty in certain
parts of the country has more relevance than in others. I think
it is about allowing the local communities to take control of
the agendas that affect them the most, and fill any vacuums that
the Government may have created.
Q161 Robert Halfon:
Dame Helen, you made a very important point, I thought, just now
about transparency equalling empowerment. Perhaps you are right,
but isn't empowerment more than just having access to information?
Dame Helen Ghosh:
Yes.
Robert Halfon: Because
having access to information is what websites were doing five
years ago. People want to be able to interact and have real ability
to deal with that information. Just telling them about crime
maps is good, but it is not enough.
Dame Helen Ghosh:
It is not enough. I think this comes back to my earlier point
that there are some things that government still needs to do and
only government can do, which is to set a legislative framework
within which that kind of local empowerment can happen. Specifically
in that case, in a sense we have now handed out the information
about crime mapping but we have not completed the picture. The
completed picture is, and it is a Bill currently going through
this House, to set up to allow the election of these police and
crime commissioners, because that then completes the loop for
local accountability to that one person.
Equally, another area where you can use data but
then empower is the number of projects on community budgeting
that the Department for Communities and Local Government is leading,
where we are saying to local people, "Here is a set of, up
until now, pretty intractable problems, whether it is reoffending
or child protection. We will take away the constraints of siloed
budgets and centrally set targets. You can have a budget; you
can decide. Local public sector bodies will support you and give
you data and then you, as a community group, can use all those
tools to solve those problems in an endtoend way."
We still need to do things, whether it is positively or negatively,
around regulation and legislation, and we still need to offer
support, but that is part of the Civil Service role in facilitating
this happening at a local level.
Q162 Charlie Elphicke:
May I give you an example in terms of the impediments to building
a Big Society? Let's say central Government is going to sell
off an asset, be it a port in my constituency, woodland or anything
like that—URENCO. The Secretary of State receives two bids:
one for £25 million from a local community group; one
for £30 million from a private operator, maybe from
overseas. As accounting officers, would you have to advise the
Secretary of State, under current guidance, to take the higher
offer in money terms, or could you value in social and community
value?
Ian Watmore: The
specific we would have to look at, but generically you can always
take a range of criteria into account when you make a recommendation.
The price or, in this case, the bid cost is always an important
factor, because that is where the real money is, but you take
a number of other characteristics into account in making the decision.
It is perfectly reasonable for people to take a broaderbased
decision than purely on price.
Sir Suma Chakrabarti:
Just to give you a reallife example from last year: the
whole question of what size of prisons should we build: 2,500
or smaller. The larger the prison, almost certainly the unit
cost would be lower. There comes a point where you actually have
to ask yourself: is this managerially wise? Could we actually
manage the prison well? What are the benefits as well? The benefit
side of the equation also matters, not just the cost. Would reoffending
rates be lower actually with a smaller prison? That's what the
data shows. You take all that into account, so it is not just
a cost thing that you take into account. There is an interesting
point you make about the Manual, that is called the green book,
which looks at costbenefit analysis and how we do it. Whether
it is still too economistic a drive in the main, and whether it
should take account of some other factors too, I think is a good
question.
Q163 Paul Flynn:
Every government comes in with an idea. It is bigideaitis
we're suffering from. We have got the Big Society now. We had
the third way under Tony Blair, whatever that was, and the cones
hotline under Major. It doesn't mean anything, does it, any of
this? You were saying about DEFRA giving powers to farmers on
the question of bluetongue. Wouldn't it have been far better
if farmers were rescued from the dependency culture by taking
away their subsidies, as they did in New Zealand, and given full
responsibility, so giving a great deal of dynamism to the industry,
which it lacks now, where it still expects handouts from national
government, local government and Europe, for virtually every problem?
Isn't this very unhealthy? Isn't this a very productive way
of extending devolution?
Dame Helen Ghosh:
On the specific issue about the common agricultural policy, the
Government's policy is indeed to withdraw direct subsidies over
time, and only pay farmers for producing public goods like skylarks,
hedgerows, birds and those sorts of things. In terms of the issue
about how one moves away from a position of dependency, in relation
to any public group, I think it will change over time. Lord Turnbull
was talking earlier about the revolutionary differences in terms
of lots of public services, the choice that individuals have and
the personal budgets that people have, which are unrecognisable
from perhaps 20 years ago. A number of the initiatives that
this Government is taking are just driving that same agenda faster.
Q164 Paul Flynn: What
changes have you made in order of reducing costs, and what changes
do you envisage being made? Do you imagine that you can keep
up with the Government's expectations of cutting costs by very
large amounts?
Dame Helen Ghosh:
Absolutely, not least because the money has simply disappeared
from our budgets. This is not a theoretical exercise, compared
with what might otherwise have been; we simply do not have the
money in our budgets. For example, we in the Home Office are
working very closely with police services on how they can be more
efficient, both in how they procure—doing central procurement—and
in processes. We have been helping people like West Yorkshire,
which has reduced the cost of dealing with small crimes by something
like 85%. Again, we have worked to take burdens off police, in
terms of reporting requirements, bureaucracy and the targets we
set. We are confident, if we do all those things, we will be
able to live within our budgets.
Q165 Paul Flynn:
One of the ways of reducing costs suggested in the document, is
that jobs should be moved out of London, where the work can be
done for less. What was the thinking behind making the biggest
cut in Passport Office jobs from an area of high unemployment
in Newport, which might well swell jobs in London later on? What
happened to the Government saying one thing and doing another?
Dame Helen Ghosh:
As you will probably be aware, the Passport Service has a very
dispersed office network, so we have a number of bases. We currently
have too much capacity in the Passport Service overall, thanks
to efficiency and the introduction of new technologies. We simply
do not need the same amount of processing capacity. Damian Green
is currently looking at the impact assessments for all the options
around where we take that capacity out and has not yet reached
a decision.
Q166 Paul Flynn:
It just so happens that the proposal is a cut in the area that
could least—it is not made evenly across the country.
Dame Helen Ghosh:
We are looking at the options as to where the greatest impact
and best choice are.
Q167 Paul Flynn:
I hope you come around with a suitable decision and the right
decision eventually. The Prime Minister told the Civil Service
that he intended to stand government on its head. The only merit
in this posture is money falls out of people's pockets when they
are in that position. Do you really think that the savings that
you have, which you say you have to make, can be done at a time
when there are reforms required? Are not the aim and the cut
too deep in order to preserve the quality of the service provided?
Dame Helen Ghosh:
The principle on which we are all operating, and I think have
to credit Suma with the first use of this phrase, is what we are
aiming at is better with less. We know we will have fewer staff
and less financial resource at the centre, and what we need to
focus on is doing the things that really make a difference—not,
as our distinguished predecessors were saying, initiativitis,
but on the evidencebased activity that really makes a difference.
That is what we are building into our programmes.
Q168 Paul Flynn:
On initiativitis, the worst part of crime is the perception.
The fear of crime is a greater cause of anxiety than the crime
itself. When people go on to their websites this morning and
find out their neighbours have been burgled and there are acts
of vandalism in their street, isn't this going to, without any
real purpose, increase their fear of crime and their perception
of crime? If they ring up the police, they're going to know that,
in every other street in their area, everyone is ringing up the
police saying, "Do something more in my area." Isn't
this an example of initiativitis, of using a gimmick, a pretty
vacuous gimmick, which is likely to have harmful effects?
Dame Helen Ghosh:
Absolutely not. What it will do is give people accurate information,
which I think we owe the public in the public sector. It will
then enable them. They can click, as I am sure you have done
this morning. I have clicked my postcode; I got the map of my
local street crime. I was then instantaneously able to click
my local police team and the earliest beat meeting, should I wish
to go to it. We are even proposing beat meetings online, so you
don't have to leave the comfort of your home. The reverse may
also be true: that there is a lot of fear of crime where there
is actually no crime. I am hoping today there are a number of
your constituents who are flicking into the website and discovering
that, despite their fears, actually crime is very low. That is
what we're aiming at.
Paul Flynn: People are
being told there are no police to cover their area, when they
click in. That is not helping. It remains to be seen. This
sounds just about as productive as the cones hotline was. I think
in future we'll see this as being a mere gimmick.
Chair: I don't think that
last point was a question.
Q169 Kelvin Hopkins:
Two very key points: you are obviously an enthusiast for devolving
to community groups. First of all, I am not quite sure who these
community groups are. They seem a very vague concept. In my
own local area, I would be very dubious about devolving anything
to some of them, because of capability and so on. The other point
is that they are not accountable. The obvious group to whom to
devolve things would be local authorities, because they are democratically
accountable; somebody can be held to account if things go wrong.
You know that there will be standards of financial management
and that sort of thing. The other point is even more worrying:
you seem to marginalise the concept of equity. Most of my electors
want fairness; they want to feel they're being treated the same
as other people. Yet one of your comments suggests we are not
about equity. Is that not really fundamental in democratic society?
Dame Helen Ghosh:
I believe that the Prime Minister himself has said, recognising
this point about difference in the capacity of local groups to
respond to the Big Society agenda, that we still need a significant
amount of support. The Office for Civil Society, which Ian knows
more about than I do, will be offering that kind of support, both
in terms of financial support and capacity building support.
I very much recognise Lord Turnbull's comments, because I was
one of the people, probably when he was my permanent secretary,
working with local community groups out in east London, and indeed
had to learn the set of skills that he described. I absolutely
agree with your point that the problem is making sure that you
know who really represents the community, as opposed to the people
who claim that they represent the community. There is a lot of
experience. Working with local authorities, tenants associations
and genuinely representative groups, I think it is possible to
identify and listen to the voices of the invisible people. I
know the Office for Civil Society is focusing on this.
Ian Watmore: Yes,
indeed. Two thoughts: one is that the Office for Civil Society
is trying to help the charitable sector through what are difficult
times, and we had a meeting last week with several leaders of
the big charities talking about the capacity of the system and
how we can grow that more broadly to take up the challenge that
has been laid out. The second thing is the promotion of other
forms of enterprise to take out roles locally—social enterprise,
mutuals, spinouts from government, that kind of thing, because
the Big Society in a local setting is not just charities; it is
a combination of bodies that we want to promote, and that's what
the office is pushing as we speak.
Sir Suma Chakrabarti:
This question of equity and accountability is an important one
to have a good discussion about. The PAC is also on the same
issue at the moment. Take youth justice, which is a very localised
approach with partnerships at the local level. Already you have
quite a bit of variation in terms of performance and in terms
of the tools that different youth offending teams use. At the
moment, what happens is the centre—we are the centre, the
Youth Justice Board—essentially tries to get equalised approaches.
With this new approach, we would be looking much more to the
local authorities, which provide 51% of the money for youth justice,
to take much more of the leadership in this, and that would have
to be right. You have to think about what is the right unit for
accountability and, in some cases, it will be local authorities.
In some cases it will be below that. It depends on the issue,
I think, and how many things you have to join up. In the case
of youth justice, you are having to join up a whole range of services
and local authorities, which makes a lot of sense.
Q170 Kelvin Hopkins:
Community groups give voice to concerns, but their ability to
manage large budgets, employ people and all of that, is something
that must be questioned, especially if they are not democratically
accountable.
Sir Suma Chakrabarti:
Helen has more direct ontheground experience of this
but, in the old regeneration programmes, this was a standard issue—the
capability of many groups to manage not just budgets, but express
what they wanted in a way that joined up all the various elements.
There was a lot of capacity building at the time, and some of
that we have to return to.
Dame Helen Ghosh:
Indeed and, in those sorts of cases, what government did do, or
what the public sector did do, was put the money in to employ
someone who was capable, in terms of just organising the project,
managing the project, doing all the things that Suma described.
In the Big Society model, government at some level will continue
to do that and it is important that it should.
Q171 Chair: Could
we briefly talk about what you are each doing in your Departments,
first of all about the Transforming Justice programme. This is
primarily about getting £2 billion of savings, isn't
it?
Sir Suma Chakrabarti:
Actually, it started before we knew what the target was for savings.
Chair: But you guessed.
Sir Suma Chakrabarti:
No, we started this in February 2009. There was a different Government
in place at the time. We were lucky enough to have, in Jack Straw,
someone who did think, whether he was in power or the Opposition
came to power, that there should be a programme of reform that
should be worked through.
Q172 Chair: You
have 197 initiatives, but there does not appear to be an overarching
strategy.
Sir Suma Chakrabarti:
If that is how you read it. It is not how the Institute for Government,
which is formally evaluating this programme, reads it. They have
given us a very positive evaluation. There are seven programmes,
essentially. It is a mixture of things. There is some policy reform,
quite clearly, which we have been working on for 18 months.
Those have been announced: sentencing, rehabilitation but also
legal aid. Then there is a mix of change management reforms.
When the Ministry of Justice was created, we had all these different
arm's length bodies, all with their own back office functions,
very much replicating each other. One of the things we are trying
to do is have a shared service across all the ministry's bodies.
In fact, Newport is a major winner out of all this for us, because
we already have a shared service centre there and it will grow
because of this. The Home Office already purchases its services
from it. There is quite a lot of change management as well as
policy reform, as part of this.
Q173 Chair: Is
this incremental reform?
Sir Suma Chakrabarti:
I am afraid it is not. Given the profile of the cuts, it cannot
be. It is £500 million a year from our budget. The
policy reforms have to go through Parliament of course. They
will not really give us the savings until years 3 and 4. The
first half of the reforms are actually very big changes in processes,
structures and so on, which I described.
Q174 Chair: Forgive
me, but I am reliably informed that the IfG evaluation highlights
the concern that no overarching strategy for Transforming Justice
has yet been produced, but you would dispute that.
Sir Suma Chakrabarti:
I would dispute that because this was the review they did, I think,
back in May last year. Then they invited me and Ken Clarke to
come and give a seminar for other civil servants to hear about
our experience. It is somewhat odd because they are actually
highlighting it. I do believe Mr Julian McCrae was in front of
you highlighting MoJ. I seem to have read the transcript, I think.
Q175 Chair: I
am glad you put that on the record. Thank you. Do you think
there's a tradeoff? What we are concerned about here is
the capacity of the Civil Service to implement change and to change
itself at the same time. Do you think there's a tradeoff
between doing things quickly and decisively, and incrementally?
Sir Suma Chakrabarti:
There is a risk, which I think we all need to be honest about,
which is that you are running massive organisations that have
to still keep performing while you are trying to change them as
well. In our case, prisons, probations and courts still have
to be run effectively. At the same time, we are trying to change
the way they are run. There is always the risk that the business
as usual will suffer as part of this, and you have got to make
sure you keep the right skills to keep the business going, as
well as getting enough change management into your top teams.
That is the sort of management objective that all of us are facing
at the moment.
Q176 Greg Mulholland:
I would like to ask Dame Helen Ghosh about Renew DEFRA.
Do you think it is fair to say that it was a success, or largely
a success? How actually has the impact of the programme been
measured and what are the lasting effects for the Department?
Dame Helen Ghosh:
The Renew programme in DEFRA was one that I introduced in 2006,
coincidently with a capability review, which fortunately pointed
in the same direction. It was essentially doing two things: trying
to get our basic systems better, sorting out our financial management
systems and our HR processes, but more importantly, making us
more flexible to changing priorities and requirements of Ministers.
What we introduced was a system for the headquarters department,
about 2,500 of us, to organise ourselves around projects and programmes.
Rather than having a business plan with lots of teams and tasks
under teams, we had a set of 10 highlevel programmes for
the Department, each of which were organised with subprojects
with a beginning, middle and end, and with project managers and
senior responsible officers. We moved staff around using a flexible
staff resourcing tool that is very similar to what you see in
professional services organisations.
All of this meant that, by the time we had our 2008
capability review, we were one of the next most improved Departments—after
the Home Office, which was the most improved, thanks to my predecessor's
work—and we got plaudits and continue to get from the Treasury,
in terms of good financial management and moving our money and
our people around in response to changed needs. That meant for
us that, when it came to things like the SR10, we were in a very
good place, we knew where our money went and we could respond
quickly to the needs of the new Government coming in. I know
that the team there will be using the model even more to deliver
these kinds of efficiencies. I think it worked for us, and other
bits of Government are imitating some of that, organising themselves
around projects and programmes. Indeed, Ian is.
Ian Watmore: We
are doing that in the Cabinet Office. In a rare piece of joinedupness,
I have borrowed Helen's change manager to come and do the job
for me, so that is taking the lessons that she has learned through
to the Cabinet Office. I think a lot of the Cabinet Office's
work lends itself to that sort of project/programme style of working.
We are learning a lot from what Helen's already gone through.
Q177 Greg Mulholland: Considering
the Home Office was described not so very long ago as not being
fit for purpose by a senior Minister, how do you think the scale
of the challenge is at the Home Office, compared to those that
you faced back in 2006 with DEFRA?
Dame Helen Ghosh:
I have been very lucky in that David Normington had been doing
a lot of work since. In terms of things like the financial management
of the Department, the basic HR systems and the quality of the
top team, he has absolutely transformed it, and we now rate among
the very highest in Government, from people like the NAO and the
Treasury, on things like financial management and risk management.
Equally in places like the UK Border Agency, which Lin Homer
led until recently, there are still significant challenges in
such a complex operation, but looking at things like the handling
of asylum cases, dealing with backlogs and the general efficiency
with which they deal with cases, they have come on a million miles.
I am very lucky that I can take that on and forwards now.
Q178 Greg Mulholland:
Are there specific policy or organisational issues that you could
identify that are going to be a particular problem for the efficiency
changes and reforms that I think everyone acknowledges need to
happen?
Dame Helen Ghosh:
The Home Office is an interesting Department. This comes back
to some of the discussion we were having earlier. It is easy
to focus entirely on the new agenda—the localism, the Big
Society, post-bureaucratic age agenda. There are still a lot
of things that a Department like the Home Office will do centrally:
it will still have a major responsibility for things like serious
organised crime, counterterrorism, a lot of the immigration
and nationality stuff. They will be central Government activities,
and we need to make sure those are carried out as efficiently
and effectively as they possibly can be. Some of that will require
pretty traditional Civil Service skills. I think I have four
Bills going through the House in the course of this year, which
require a lot of those traditional skills about policy making,
evidencebased and dealing with Parliament, all of that kind
of stuff. I need to make sure I retain those skills. Equally,
I need really good change managers, both to support and facilitate
people like the police with their efficiency, but equally the
big change programmes in places like UKBA to introduce eborders
systems and new IT for casework. I have a complicated mix of
change management skills that I need and facilitation skills,
and then some of these very traditional skills that the Civil
Service has always had.
Q179 Greg Mulholland:
What about a specific question? Do you think locally elected
police commissioners make it harder to achieve the efficiency
savings, because they will need to be supported at a local level,
or will there be savings to compensate?
Dame Helen Ghosh:
Going back to the discussion we were having earlier, there is
no new money beyond the budgets I already have for local police
and crime commissioners. We will be living within our budgets
while delivering local police and crime commissioners. The only
additional cost around police and crime commissioners is effectively
the cost of the elections.
Q180 Greg Mulholland:
What about the cost of supporting them?
Dame Helen Ghosh:
That would be expected to be found from within the existing cost,
for example, of supporting the existing police authorities.
Q181 Chair: On
this question of cost reductions, obviously they are very brutal
reductions in both your Departments and, indeed, in the Cabinet
Office. One of our witnesses, Professor Kakabadse, says in a
supplementary memorandum to us, "More worrying is the current
debate on cutting of costs without deliberately focusing on where
fat lies, and what is lean and should be protected." Is
that a concern you share as you implement these cuts?
Ian Watmore: I
would perhaps challenge the assertion with the professor, whom
I have not spoken to. If that is what he said, I would challenge
that, because the whole point of setting up the efficiency and
reform group in the Cabinet Office and the Treasury was to tackle
the areas that people regard as waste or fat or any other words.
For example, we have property that we do not need around the
country. If we can get hold of all the leases of all the properties
that we have and gradually release them as they become due, and
do different deals with landlords and so on, that is a way of
reducing cost that has no direct impact on the frontline services.
Similarly on the procurement agenda, if we can purchase goods
and services more cheaply than we were previously, that is a saving
that does not impact the front line. There is a lot of work going
on to try to find those savings. We have already this year—these
are unaudited figures, but they are what we count—achieved
£2 billion of savings just from that alone in the last
few months. We expect to achieve over £3 billion this
year, and that is even before the CSR started. These are savings
that are designed to protect frontline services or protect the
critical budgets that might go into critical national infrastructure
and defence budgets.
Q182 Chair: Do
you all share that view?
Sir Suma Chakrabarti:
I do. We have the same agenda as Ian on estates and everything
else. The one additional point I would make is it is also very
important to match demand to supply. That does reshape some front-line
services. Why are we closing 141 courts? It is because they're
very underutilised. There is not enough demand for them,
so there will be some reshaping of services accordingly. The
prison population is not rising as fast as it used to and that
is allowing us to decommission some prison places as well, some
of the more expensive parts of the estate. That is also sensible
at the same time.
Q183 Chair: On
this question of decentralisation and depending far more on the
ability of officials right down the food chain to take decisions
and act autonomously, do you agree that this is going to require
quite a substantial retraining and reeducation of parts
of the Civil Service in order to do this?
Ian Watmore: I
think we do, very much so. To give you a very good example of
that, in order to bring about the local, Big Society type options
we have talked about, we need people at the front line who are
very good commissioners of those services.
Chair: The fourth capability?
Ian Watmore: Yes,
exactly. I thought that was a great point that came out of the
earlier discussion. Commissioning is not procurement. What we
will always be in danger of is saying, "Yes, we need commissioning,"
and then at the local level recreating a sort of procurement process
that might have been designed for an aircraft carrier, whereas
what we really want to be able to do is get people to commission
services and outcomes from people, in a quick, short, sharp way
with minimal bureaucracy and minimal overhead from the local community
providers. That is a change of skill that we have to lead.
Q184 Chair: Are you able
to protect training budgets and, indeed, enhance training budgets?
If this is, say, a threeyear change programme, it is been
remarked to us that an organisation the size of the Civil Service
would need to spend millions and millions of pounds on training
in order to effect this change programme. Do you have that money
in you budgets?
Ian Watmore: We
have. I think the important point that we are all wrestling with
in Departments is not just preserving a budget but spending it
wisely. There is a lot of focus going into developing both the
training and the culture change that goes with all of this in
ways that are futuresfocused and not the way it was in the
past, which means creating different training programmes. As
a group of permanent secretaries, we have launched a new approach
to HR across the Civil Service from April, one theme of which
is to get a new approach to Civil Service learning that is targeted
on all these sorts of skills.
Q185 Chair: This
is such a central part of the programme, I wonder if you could
do us a note on behalf of all Departments about what is being
spent on training and how that is being spent in order to effect
this delegation and decentralisation. That would be extremely
useful.
Ian Watmore: Absolutely,
that would be fine.
Q186 Paul Flynn:
Are the roles of your Departmental boards supervisory or advisory?
Ian Watmore: They
are both.
Dame Helen Ghosh:
They are both.
Ian Watmore: Lord
Browne has been very clear on that in all his answers.
Q187 Paul Flynn:
Where does the supervisory part come in?
Ian Watmore: In
terms of the board as a whole, which is a mixture of Ministers,
nonexec directors and civil servants, we are supervising
the work of the Department which, if it is a small Department,
might be very direct but, if it is a very large Department, could
be very devolved and very diffuse. That is definitely part of
the supervisory function. The advisory, which is where people
focus on the nonexecutive director community, one of the
things we are looking to them for is advice from their backgrounds
that we can take advantage of. It will be balanced with an awareness
that it is not always like that in the public sector compared
to the private sector. We have that discussion a lot.
Q188 Paul Flynn:
Many of these non-executive directors are GOATS--Herd 2--coming
on to provide their wisdom. There is an interesting suggestion
from the Institute of Directors, that the leading nonexecutive
director should have responsibility for doing assessments for
other members of the board and presumably on yourselves and the
political people involved. Is this an idea you have enthusiasm
for?
Ian Watmore: Not
as you have described it, I have to say. The idea that we do
have enthusiasm for is for the board to be selfcritical
in terms of the way it operates and the way the Department operates.
Lord Browne and the lead nonexec directors will play a
pivotal role in that, but the fundamental accountabilities do
not really change between the permanent secretary accounting officer
role and the Secretary of State role for looking after the Department.
That is the bit that is not changing, so this is supplementing
those roles, not changing them.
Q189 Paul Flynn:
You say that you are futurefocused. I cannot recall any
politician coming along and saying they were focused on the past.
Is it just a question of new government, new jargon?
Ian Watmore: Apart
from back to basics, maybe. What I mean by that is that the training
programmes that are set up in a government, or any organisation,
often reflect the skills you did want to have. When you need
new skills, such as we were talking about with the commissioning,
then obviously you need to devise different programmes to make
sure of that. Just sending people on training courses is not
enough. They've got to be relevant to the work they are going
to do and they have to be part of a broader change. That was
the only point I was making.
Paul Flynn: That is not
exactly a staggering new idea, I don't think, but I am grateful
for it.
Q190 Chair: Is
there a tension between accountability to a board and accountability
to Parliament?
Ian Watmore: The
interesting difference from business, which I have experienced,
is the accountability to Parliament is different. It is not something
that business people are used to. They are used to being accountable
to their shareholders, their partnership structures or whatever
their legal ownership is. Parliament and Ministers introduce
a different dynamic to it. Certainly for those of us who cross
the boundary from private sector to public sector, it is new and
it is different. Having been here six or seven years now, I think
what we ought to be able to do is use the boards to focus on areas
that we perhaps have not been focusing on, but I do not see it
changing the relationship between the primary officers, whether
they be elected or unelected, and Committees such as this one,
which I think play a vital role.
Sir Suma Chakrabarti:
Can I give you an example that goes to the heart of it? As accounting
officers, we are obviously accountable to Parliament for financial
management and so on. I had to take a direction from Jack Straw,
when he was Secretary of State, on a particular item of expenditure.
I tried to replay in my mind, with the new board, whether that
would have been different. I do not think it would have been.
The debate would have been widened, in terms of other Ministers
and nonexecs all taking part in it, because the issue would
have gone to the board, I think, because it was a large investment.
At the end of the day, I still have my accounting officer responsibilities.
Even if the board decided that this had to go ahead, I still
had the right as accounting officer to ask for a direction and
I still would have done, so I do not think that changes actually.
Dame Helen Ghosh:
I have an example similarly where I asked for a direction and
got a direction, but again it was a classic instance of having
to make a very quick decision, in talking to my Secretary of State,
then Hilary Benn, about a financial decision, and that was the
basis on which, in the space of about an hour, we had to take
a decision that wouldn't have gone anywhere near a board. Again,
these are circumstances that could arise in the future. I don't
think it will change those fundamental accountabilities. It will
enrich the debate. Having very experienced powerful nonexecutives
on an advisory and supervisory board will enrich the debate around
things like, is this delivery, timetable and scope of the thing
you are trying to deliver realistic? That kind of input from some
experienced nonexecutives will be terrific in terms of successful
change programmes and growing our skills as civil servants. We
can learn a lot from them, so I think it is a very rich prospect,
myself.
Q191 Chair: You
do not anticipate a situation where something controversial occurs
and the permanent secretary tells the Select Committee, "Well,
that's what the board decided. That's why we did that."
Dame Helen Ghosh:
No, because the board will not be the decisionmaking body.
This is back to Ian's point. It is the Secretary of State, under
their statutory authority, who makes the decisions. The position
will be exactly as it is now. You could summon me to talk about
how the decision was implemented, the financial implications of
it and so on but, if you wanted to talk about why the decision
was taken, it would be for the Secretary of State to come.
Q192 Chair: These
boards do not actually have fiduciary responsibilities?
Dame Helen Ghosh: No.
Ian Watmore: Not
in the way you would expect them to have in the private sector,
no.
Q193 Chair: They
are advisory boards.
Dame Helen Ghosh:
And supervisory of our performance, yes.
Chair: If there are no
other questions, that has been an extremely useful session. I
am sorry it was a little curtailed, but we had a very highvalue
morning.
Ian Watmore: Never
apologise. It was very interesting to hear the other witnesses
as well. I think we enjoyed it in the back row as well.
Chair: It was a privilege
to be in the same room as them, wasn't it? Thank you, too, for
very helpful evidence and we look forward to that extra memorandum
from you, Mr Watmore.
| 
