Change in Government: the agenda for leadership - Public Administration Committee Contents

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.

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