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

Examination of Witnesses (Question Numbers 194-344)

Rt Hon Francis Maude MP, Sir Gus O'Donnell KCB and Ian Watmore

3 March 2011

Q194 Chair: Good morning and welcome to this session on the reform of the Civil Service and the principles of good governance. I wonder if for the record you could just confirm who you are, please.

Francis Maude: I am Francis Maude; I am Minister for the Cabinet Office.

Sir Gus O'Donnell: I am Gus O'Donnell, Cabinet Secretary and Head of the Civil Service.

Ian Watmore: Ian Watmore from the Cabinet Office.

Q195 Robert Halfon: Good morning. Can I ask you, Mr Maude, if you think that Civil Service Live is value for money?

Francis Maude: My understanding is it does not cost the Civil Service anything to run, because I think it is provided outside, isn't that right?

Gus O'Donnell: That is right. It is covered by, particularly, Dods, but a number of other groups get involved in it, and it is a way for us to get civil servants of all different grade ranges together, particularly with the change of Government; it was particularly useful this time for them to hear particular messages from the new Government, including from the Minister.

Francis Maude: Yes, I actually had in the course of—what was it? Two days? Three days?

Gus O'Donnell: Three days.

Francis Maude: I was able to—and I did two visits—talk to the senior 200 all gathered in one place, all the heads of communication, the senior communication people. I did four things altogether and from my point of view it was very efficient to have a lot of officials from all over the country in the same place at the same time.

Gus O'Donnell: It might well have cost us more money, because we used it also to have all of the SCS together for different departments on different days—

Chair: SCS?

Sir Gus O'Donnell: The Senior Civil Service from different departments, put them all together in one place. So, normally we might have had to hire some outside venues, but since we had a venue provided free for us this was incredibly good value for money.

Q196 Charlie Elphicke: Why do you think that people like Dods would want to sponsor an event that they could have nothing to gain out of?

Sir Gus O'Donnell: Dods are behind the newspaper Civil Service World. I think what they want is they provide those handbooks, which I think are just generally useful information, and they are prepared to do this for their business.

Q197 Robert Halfon: How many civil servants actually attend Civil Service Live on average every year?

Sir Gus O'Donnell: It varies, but it is in the thousands.

Q198 Robert Halfon: And have you done a cost-benefit analysis of their attendance at the conference compared with their being at their various posts?

Sir Gus O'Donnell: It is fantastically useful, at a time when we are not doing much formal paid training development. We do not pay for any speakers. They get to hear Ministers directly telling them what the new priorities are. With a change of Government, this is fantastically useful. The message I have been trying to get across to them for some time now is to be more innovative in the way they do things, and that could not have been better timed—we have been doing this for a while now—to get them thinking about "better for less" and how to manage in a situation where we are doing deficit reduction. I think this is incredibly good value for money.

Francis Maude: Just to make a couple of points: this is not a glamorous event. This was held in Olympia. This is not a sort of high­gloss, lots of bells and whistles event. The second point is: I know of no organisation that I have ever been involved with that does not seek to get people together offsite from time to time and generally much more expensively than this, and there is value in it.

Q199 Robert Halfon: Going back to Civil Service Live, when you were there Minister, you described the vision of the Civil Service in 2020. Have you got a blueprint to get you there?

Francis Maude: No, because the Civil Service is a very dispersed organisation. It is going through intense change at the moment—downsizing very significantly. The Civil Service will absolutely, inevitably become much smaller, flatter, less hierarchical. It should do. I think the professional streams in the Civil Service, which are stronger than they were when I was last around in Government 20 years ago—when finance directors tended to be generalists, HR directors, likewise—are all much more professional streams now. They do not always get accorded the status and the authority that they need within organisations. Finance directors in a Government department will typically not have the same kind of clout that a CFO would expect to have in a private company and that, I think, is a reform that is needed.

I would like to see the Senior Civil Service managed in a more centralised way—to be a much more sort of fungible resource across the whole of Government. We are looking actually at ways of making the Fast Stream more interchangeable between different departments at the moment. The brightest graduates come in as Fast Stream graduates and they get plonked in a department—not quite randomly; that would be overstating it— in a not very scientific way, and then tend to stay there for life and I think there is huge value in having them much more interchangeable.

Q200 Chair: This is quite a dramatic change we are trying to implement in Civil Service culture, isn't it?

Francis Maude: I think a lot of it is driven by necessity.

Q201 Chair: Maybe, but we are looking for quite a big cultural change?

Francis Maude: Yes.

Q202 Chair: This will be the first time that anybody has tried to reform the Civil Service without publishing a White Paper or a document, somehow, to scope and to lead that change. How is it going to happen? Or is it just something you do to the Civil Service?

Francis Maude: A lot of this is just common sense. I mean, this is not revolutionary. Gus and his predecessors have been valiantly trying to drive reform, and successfully in many respects, particularly in relation to the professionalisation of those streams, but the circumstances we are faced with, with a need to cut spending dramatically in a way that no Government has had to do—or no Government has done since the 1920s—imposes a pretty rigorous discipline.

Q203 Chair: But what exactly is meant to happen?

Francis Maude: What do you mean what is meant to happen? In what respect?

Q204 Chair: You talked about less hierarchical. Your speech said, "Modern and flexible, high performing, less hierarchical and more innovative".

Francis Maude: Okay, well why not get Ian to talk a little about how he is organising the Efficiency and Reform Group, where we brought together in one place the functions in central Government which are about procurement, technology — if I was being mildly self­deprecating, it is, as it were, the unglamorous, dull part of managing the overhead, which is incredibly important but does not rate highly in the glamour stakes—property, projects, Civil Service management—all that in one place, but Ian is organising that in a very different way.

Q205 Chair: I hope you will forgive me; we appreciate that that work is going on and it is very valuable—

Francis Maude: No, but culturally it is actually a really good exemplar of how one might do things in the future.

Ian Watmore: Just a couple of comments; I will try and be brief for you. One of the issues with the way the Civil Service is structured is it is very much in teams, where all the communication is up and down the team. Very few business problems that we tackle are actually the problems of one team, so we are trying to organise all of the people much more like a professional services organisation, where they are assigned to work on projects around key issues. If you are a director of one of my teams you do not have people that are permanently assigned to you; you ask for the people to work on key projects and they come from a variety of disciplines. So, it is a very different operating model for how the centre of Government can work, and through that you get a culture change that I think is behind your question. The other comment that I would make is, in terms of White Papers and so on, there is a White Paper coming out in the near­ish future—I do not know the exact date—on public service reform, within which there will be aspects of Civil Service reform and we have a job advertisement out at the moment for a director general—so the second highest level of the Senior Civil Service—to lead on that particular area, working to the three of us, in effect, on the cross­cutting role across Government.

Q206 Chair: So he will be obviously in charge of the change programme?

Francis Maude: He or she.

Chair: He or she, of course.

Ian Watmore: In charge of reforming the Civil Service to support the wider public service reform agenda that the Government is publishing.

Q207 Robert Halfon: How will you make certain that when you reform the Civil Service you won't encounter the same obstacles from Sir Humphrey as happened to previous Governments? Perhaps I can ask Sir Humphrey himself.

Sir Gus O'Donnell: Give me a break. Francis was talking about the changes that have happened in the Civil Service. When I joined in 1979 there was a Sir Humphrey element to it. I looked up and I saw all male permanent secretaries; there were no professionally qualified finance directors. You ended up in HR if you could not do policy. People that did operational work were third­class citizens; they were not even second­class citizens. That has changed radically and I think that we are changing that world where people who do operational issues are really given equality of esteem. Those things have changed. We care enormously about having professionally qualified finance directors. I always wonder why the FTSE 100 does not insist on professionally qualified finance directors, but they do not, so there we are. So, I think there are big things.

On the culture that will change, if we look to the future, as the Minister said, one of the interesting things we have now is a really new challenge of cutting back—most departments will be cutting back by about a third. This is about managing change well. Now, our staff surveys tell us this is not one of our strengths, and I think what we need now is to prove, as a modern Civil Service, not just that we do the policy stuff but we can actually manage change well. This is our great opportunity and I think I have examples from places I have visited around the country where decisions made by the Minister, for example on stopping marketing spend—we just stopped marketing spend; that meant that we had some compulsory redundancies in places like COI—meant that people had to innovate.

I went down to see the Patent Office. They have to tell small businesses how to protect their intellectual property; they were doing this through marketing spends, through some consultants. No consultants, no marketing spend; they innovated, and they found incredibly clever ways of doing it. It comes back to your point about Civil Service Live. They remembered about things like Dragons' Den; they got links into those websites and suddenly entrepreneurs with new ideas that were looking to get on to programmes like Dragons' Den found out about ways of protecting their property. It did not cost us. It was much more effective. So, it was a classic example of better for less.

What the deficit reductions are doing is empowering civil servants—because a) there are not so many consultants around, and b) they have to think of ways of doing things without spending money—to be more innovative, and I think that is very invigorating to the Civil Service. I think this is our chance to get that thing that has been persistently a problem for us, which is our staff do not think we manage change well.

Q208 Chair: How do you communicate to staff that they are allowed to be more innovative when it has not been their habit in the past?

Francis Maude: It is a great question.

Sir Gus O'Donnell: Civil Service Live was one of the best ways.

Francis Maude: Yes. But it is a great question, actually, and we gave evidence to the Public Accounts Committee a month or so ago and I think, actually, we raised that question. In a way, Government tends to be quite prone to take huge macro risks, but then at working level, at micro level, to be very risk averse and hostile to innovation. You do not often hear of someone's career suffering because they preside over an inefficient status quo, but try something new that does not work and that can blot your copybook big time. Good organisations learn as much from the things that are tried and do not work as from the things that are tried and do work. You need to have a culture—we do not have this yet—where people are encouraged to try new things in a sensible, controlled way; front up if they have not worked—not have a culture that assumes every failure is culpable, and for every failure there has to be a scapegoat—but actually make sure that if something is tried and does not work: 1) you stop doing it; and 2) you learn from the things that have been tried and what the lessons are. I do not think we are good at that at this stage and I think, if I could also just finish the point, part of the reason for that is the sort of audit culture, where everything has to be accounted for to the nth degree and I think we waste a huge amount of time and effort in stopping bad things happening and the result is we stop huge amounts of potentially good things happening as well.

Q209 Robert Halfon: Some critics, like Reform, say that you are not prepared to carry out the radical decentralisation in Whitehall and actually really radically reform the Civil Service to decentralise power. They say that the last Government had plans, whilst albeit not implementing them, whereas you have no plans.

Francis Maude: Your question, Chairman, about have we got a great White Paper and a blueprint and a plan—and I think the point has been made that there has been a series of plans and blueprints and reports and White Papers over the years, but actually not all that much changes dramatically. The rhetoric has often outstripped the delivery. I am more interested in us doing stuff. Just in terms of the Reform proposals, Reform suggested a number of things, one of which was to make it much more political and that is a major constitutional change: to be much more American, the whole top tier swept away, replaced by political appointees. Of course there is an argument for that, but it is a massive change—a massive constitutional change. I actually, being blunt about it, think the basis for the Northcote­Trevelyan reforms, the principles, remain correct. I think having a Civil Service that is politically impartial is good, which does not mean they are not allowed to be enthusiastic about what the Government has done—in fact they are expected to be enthusiastic about what the Government is doing, because they are the instruments of doing it. But I think the principles are right.

Q210 Robert Halfon: Dare I say it though, do you have any milestones, to use that famous term, of actual reform if you do not have any plans?

Francis Maude: Well, I come back to your point about decentralisation. We are doing something quite dramatically different, which is what I call the loose-tight balance, where in any big, complex, dispersed organisation, like a multinational corporation or a Government, there are some things you expect to control pretty tightly from the centre. Those would be strategy; strategic communications; cash; headcount—because, particularly in the public sector headcount is a seriously fixed cost; the big projects that carry operational, financial, reputational risk; commodity procurement; goods and services where using the scale of Government you can drive down price dramatically—

Q211 Chair: I do think we really do appreciate this but—

Francis Maude: Just to make the point about the decentralisation, there are some things we are centralising and that is a big culture change and it is being effective and it is working. As a result of what we have done just in this financial year alone, we will have saved, we expect, in the region of £3 billion.

Q212 Chair: But it is very noticeable that what you are centralising is much more particular and defined than what you are trying to decentralise. We have speeches and evidence to Select Committees, but I think we look forward to this White Paper, which will set some milestones about how you are going to decentralise and how you are going to change the culture, because I think that is what is required.

Francis Maude: I sense a craving to have a plan and—

Q213 Chair: Yes, and no big organisation manages a change programme without a plan.

Francis Maude: If you are talking about decentralising, one of the things that we are encouraging, for example, is the creation of mutuals; groups of public sector workers coming together to form cooperatives, spin themselves out of the public sector but to deliver the services—massive decentralisation. I would recommend, with the interest this Committee has, going and visiting some of these mutuals because the way in which they operate, the same people with the same financial incentives, pursuing the same vocation—they do things fantastically differently.

Q214 Chair: If your plan is to develop supreme examples and really good examples of decentralisation and innovative ways of doing things, well then set that out, because having a plan is an act of leadership and without an act of leadership there won't be change.

Francis Maude: Well, we are doing these things. These things are happening. When we started talking about how we are going to support mutuals, the first response was: "Well, we need to have a plan, a programme, and devise rights and systems and processes." And when I reflected on that, I thought, "I could not think of a better way of killing the idea dead."

Q215 Chair: That may well be true, but that is not an argument against having a plan.

Francis Maude: Well no, it is, actually. The right approach is to find people who want to do this and support them, and as they try and set up their cooperatives and mutuals find out what the blocks are.

Q216 Chair: If that is your plan, set it out.

Francis Maude: We have done. But that does not have to be a White Paper and—

Ian Watmore: There is no shortage of plans out there. When the Government came in, it laid out its structural reform plans for each department. The White Paper is a unifying document and additive to that. We have these roadmaps that we follow every month with these structural reform plan, business plan, milestones on them. The Government has already set out its big decentralisation policies about health and education and criminal justice and all of these things. What we are now bringing together in the White Paper is not just those things but the other things that need to happen as well, in exactly the same way as the Minister has just described. I believe mutualisation will be a big part of that and it will enable the Government to deliver on the reforms that it has already set out and it will trigger new reforms as people come up with more innovative ideas at the front line.

Sir Gus O'Donnell: Could I just add to that? Chairman, you said that without a plan, change will not happen. In a sense, change is already happening. If you look at the size of the Civil Service, that is already falling; we have programmes to do the things about restructuring departments, reducing numbers, saving money. They are already partially implemented across a number of different departments. That process is already happening; you can see it in the numbers. The number of civil servants is declining and will carry on declining for quite some time.

Q217 Kelvin Hopkins: Much of what I have heard so far sounds splendid, carrying on the Northcote-Trevelyan, Haldane, even Fulton perhaps, tradition; more professionalisation of the Senior Civil Service; getting rid of marketing, i.e. the spin machine, which was so much a feature of, shall we say, New Labour; I am a Labour member, not New Labour, I may say. It all sounds splendid. But when we get to decentralisation we have a phrase from the Prime Minister, who wants to "turn Government on its head" and give power to the people. Sounds like the Tooting Popular Front, but I am not convinced by that yet; I cannot see how that is going to happen. Who are "the people" if they are not the elected local authorities, elected central Government, the Civil Service, which is accountable—who are "the people"? We have heard mutuals as one possibility. Is it not going to finish up with schools, for example, being handed over to small numbers of middle class activists in some areas, to private companies in others? We will lose accountability for education standards, we will lose accountability for public money and in the end it will descend into chaos and we will have to do something about it. Isn't that what is going to happen?

Francis Maude: I do not think it will be chaos, but I do not think it will be very tidy either, and, again, there is always a craving for things to be administratively tidy and conform to some textbook diagram and I do not think this will. This will be quite untidy and quite different patterns in different places. But to take your example of schools, the power rests with parents choosing where to send their children and exercising that power on the basis of good information, accountability for standards and the way that public money is spent. All of these schools, whether they are set up and run by groups of parents, by not­for­profit organisations or whatever they may be—the proposal we have for breaking up public sector monopolies in so many areas very much does draw, and this will not commend itself to you, I know, on the endeavours of the Blair Government, who wanted to erode the power, the stranglehold, I think is the way he might have put it, of the big monolithic public sector monopolies. The accountability for standards and for public money will come through the fact that all these schools will be inspected and inspected rigorously and in, frankly, I hope, a rather less tick­box kind of way than they tend to be at the moment.

Q218 Kelvin Hopkins: At the moment, as of yesterday, in London, something like a third of all youngsters are not going to get their first choice of school anyway, and quite a few are not going to get a school at all, as it stands, because the state has not provided enough places. In the end it is the state that is responsible, and the state should be accountable for providing sufficient places and for funding them.

Francis Maude: That is why we are saying that rather than spending money going around the country refurbishing and rebuilding existing schools, it would be better to have the money available for building and creating new schools, because of exactly the point you raise, that the dogma has been for a long time, "We must reduce surplus school places because it is inefficient to have surplus places." The truth is, if there is not any slack in the system, you are quite right—choice becomes constrained.

  Chair: I do not want to get too bogged down in education.

Q219 Kelvin Hopkins: But looking at other policies, other countries, they depend very heavily on the state bureaucracy, if you like. L'Etat, in France, the Préfecture system, is very much a state system that seems to work very well, and you have got Belgium, where at the moment they have no politicians at all operating things, but the state seems to work quite well because they have kept the bureaucracy. If you get rid of the bureaucracy and damage that, wouldn't we have serious problems?

  Chair: I do not think Belgium is a great example we wish to follow at the moment.

  Charlie Elphicke: Exactly.

Chair: The problems of coalition Government.

Francis Maude: It makes ours look like a miracle of speedy and effective formation, which it was actually—he says hastily. But you are right—education, you can have two models. You can have the French, totally dirigiste, so that every 13­year­old at 11 o'clock on Tuesday is opening the same page of the same maths book. That is one way of doing it. Last time I posed this difference of approach someone said, "Well, actually, the French system—it is like that, but does not work well now", or you can have the mixed economy.

Q220 Chair: Actually what we need is to ask you to do is square the circle. On the one hand we want to turn Government on its head and decentralise and Big Society and Post­Bureaucratic Age. On the other hand in the Public Bodies Bill you justified transferring a whole lot of activities of non­departmental public bodies back into Government departments on the basis of ministerial accountability, the very old fashioned notion. There is a tension there, is there not? How do you square the circle?

Francis Maude: I do not think there is a tension at all, actually, because the whole point behind the Public Bodies Review and the Public Bodies Bill is to increase democratic accountability and that can be if an executive agency, for example, is accountable to Parliament through a Minister, and an NDPB is not.

Q221 Chair: If you are pushing public service into mutuals and arm's length organisations they are going to be less accountable, aren't they? I am being devil's advocate here.

Francis Maude: No, not remotely less accountable, because a group of in-house public servants is accountable through the bureaucratic hierarchy to, if it is within a Government department, a Minister, and thence to Parliament. Set it up as a cooperative mutual outside the public sector and there is still an accountability relationship. It turns then into a contractual relationship, not an employee relationship—that is the only difference. But it is just as accountable—actually, arguably, more accountable.

Q222 Chair: So a Secretary of State will still answer for the failing of an individual school?

Francis Maude: No, and I hope they won't. Why on earth would we want a system where Ministers are held responsible for the performance of every school? That is a ridiculous idea.

Q223 Chair: That is the system we have at the moment.

Francis Maude: I know and it is bonkers.

Q224 Chair: Right. So decentralisation does mean a stretching of the elastic bands of accountability in the traditional sense.

Francis Maude: Yes, totally.

  Chair: Right. That is clear.

Q225 Kelvin Hopkins: Just one more question. What people demand is equity and quality and accountability. All of these three things will be destroyed if we go for this almost Maoist revolution. Is that not the case?

Francis Maude: No, shortly. You say everyone wants equity and everyone wants quality. You cannot have total equity and a drive towards quality, because quality improvements do not happen uniformly. Quality improvements happen because a group of people in one place think of a better way of doing things and they do it. They do not have a White Paper that tells them, "This is how you must do it"; they do it. They think of it and they do it.

Again, I do not want to be boring about the mutuals, but I can point you to some fantastic ones where people are just thinking in sometimes tiny ways, ways of doing things differently, that deliver a better service for less money because they have thought about it. And they are not subject to some hierarchy and some set of rules that prevents them doing it. They just do it. So the quality of the schools will come from groups of people doing things differently, that then permeating out and that is—

Q226 Chair: Could you furnish us with a note of some of the things you would like us to go and look at?

Francis Maude: Yes, absolutely.

Q227 Paul Flynn: I think I feel inspired by this born­again socialism that we are hearing this morning. You do not believe in plans, which is unfortunately not Maoist, but there we are. But you do believe in doing stuff, as you have said. Now you have been doing an awful lot of stuff lately. Was it not naïve of the Government to believe that dumping a whole mountain of data incomprehensible to the average person into the public domain was somehow going to improve accountability? It did not go well, did it?

Francis Maude: No, it went very well. Is it all perfectly useable and perfectly understandable? Probably not but—

Q228 Paul Flynn: Can I give one example? Your hallelujah chorus of praise that comes daily from the Daily Mail commented on it: "The database is too vast and of no use to anyone but computer and data experts." Many others said the same.

Francis Maude: Except you would also find that the Daily Telegraph and The Guardian, both of whom are leaders in terms of the digital exploitation of data, not only were enthusiastic about it but actually set their developers to work immediately on finding ways into the data. Now, to the question: is it all perfect? No, it isn't. The thing I said absolutely at the outset in our approach to transparency and data release is that speed trumps accuracy. It is important to get the data out there because that brings its own discipline in terms of improving it.

One of the conclusions of Sir Philip Green, when he came in to do a fairly rapid and vigorously expressed review of some aspects of efficiency, was that the quality of Government data in many respects is lamentably poor and inconsistent. Expose that, as we are doing, and you start to build in disciplines within the organisations that provide the data to improve the quality. So, rather than trying to sanitise it all and make it all perfect and lovely and totally useable to begin with, the view we have taken is put it out there; let people get to work on it; find out from the public who want to use it and the developers and the different organisations that want to use the data what things are going to be useful to them, rather than us sitting back at the centre and saying, "This is what we are prepared to divulge and in this way."

Q229 Paul Flynn: Speed trumps accuracy.

Francis Maude: Yes.

Q230 Paul Flynn: So it does not matter if parts of those data are inaccurate?

Francis Maude: Some of it will be inaccurate. For sure. Absolutely certain; I absolutely guarantee that.

Q231 Paul Flynn: But speed is important. These are daring concepts, I think.

Francis Maude: I will take that as a compliment.

Q232 Paul Flynn: The references were generally hostile to your release of data. How are you going to measure its success? If we look at the newspapers—

Francis Maude: No, the comments were not generally hostile. I am sorry; I cannot let you get away with that. Britain is now seen as a world leader in transparency, in opening up the workings of Government to public view, and this is pretty uncomfortable. There are high levels of discomfort.

Q233 Paul Flynn: Can I just make a point? I mean you can talk all day about it. Professor Martin Smith said to us: "The problem with the plans at the moment is that large amounts of very crude data are being released. It is difficult to know what, first, ordinary citizens will make of the data and how they will be able to use them." Now, how are you measuring how you have improved accountability by dumping this data?

Francis Maude: I think that is a really old­fashioned view, because some of these data—

Q234 Paul Flynn: Inaccuracy is the modern view.

Francis Maude: If the data is inaccurate, the data is inaccurate, and better to expose that, and, as I say, that brings its own discipline in improving the quality and accuracy of the data.

Q235 Paul Flynn: Isn't this a swing of the pendulum? Your party was very impressed by what Tony Blair said: that in his first couple of years he did very little to change, but in fact don't you think that when Lord Cameron might write his autobiography in about 20 years' time he will start off by saying, "I rushed in where angels feared to tread"? Aren't you doing too much stuff?

Francis Maude: No. Again, I take that as a huge compliment.

Q236 Paul Flynn: Wouldn't it have improved this release of data if you had had a plan?

Francis Maude: We did have a plan. We set out the plan. The Prime Minister wrote round Government departments almost as soon as we started, which set out the plan. We made the commitments: we will publish organograms; we will publish salaries, which is actually not a particularly new concept. I am told that in 1970 Whitaker's Almanack published the salaries of all Senior Civil Servants, so it is not a new concept.

  

Q237 Chair: Isn't the point here that obviously any member of the public will have access to this data, but actually you are no longer going to be relying on the monopoly intermediary—

Francis Maude: Exactly.

Chair:—for the statistics, which is the Government and the Statistical Service. But aren't you encountering some resistance from within the Statistical Service across Government that unexplained data, data without metadata, is dangerous because it will be used and abused, and The Guardian and the BBC and the Daily Mail will get hold of the wrong numbers and draw the wrong conclusions and everyone will go running off at tangents. Hasn't this got to be tightly controlled and explained? As you can see, I do not quite believe the question I am asking.

Francis Maude: Well, the only resistance I am encountering is from Mr Flynn, actually, at the moment.

Ian Watmore: Two quick points on this. What the Minister said about getting the data out there is important. The feedback we are getting is they want it out there in more accessible format, and that is what we are now working on.

Q238 Chair: So it is still going to be censored and doctored before it comes out?

Ian Watmore: No, accessible format in terms of the computer systems that people use.

Q239 Chair: So we are not going to put raw data—it was put to me by a very senior statistician that raw data is about as useful as raw sewage.

Francis Maude: That is one of those easy, glib phrases that does not mean anything at all.

Ian Watmore: Perhaps the bigger issue is less about the informational aspects than what it enables people to do. So if you go to a very outstanding organisation like Netmums, which has created a whole community of ability to serve mothers in this country, they have great need for information from Government in order to be able to then serve—

Q240 Chair: But they will be an intermediary?

Ian Watmore: Yes, exactly. And we are getting that sort of pressure from them in order to be able to help put more information out there so that very valuable and worthy organisations, like Netmums, can take that data and turn it into information for their customers in the way that they want to do.

Sir Gus O'Donnell: Could I just make one point on this? It is absolutely right and I think the raw, unadjusted data in innovative areas is really incredibly useful and we should let the experts intermediate that process. There is, of course, the need for things like national statistics, where accuracy has to trump speed—the other way round. So there you take a standard issue like seasonal adjustment; you would want to have figures that are seasonally adjusted, for example, by standard, accepted methods, and you could put the raw data out there but then we would have arguments about the methods of seasonal adjustment and all the rest of it, which I could talk about at great length, but I am sure you do not want me to.

So you do need to distinguish, but I am very much with getting the data out there in a raw form so that then the intermediaries can use this, develop it, look at it, find ways to handle it and we have done it. I think the bicycle accident data was a classic example of Government just sticking data out there and the user groups finding really interesting and new ways to do it, which were great for the public.

Q241 Paul Flynn: Can I just counter this dastardly suggestion that I am isolated in my wisdom here? I have the might of the Daily Mail behind me; I have Professor Martin Smith, and Nigel Shadbolt, another professor, a member of the Transparency Board, no less, said that "the eagerly awaited comprehensive spending data from the Treasury (COINS) disappointed many—it was hard to fathom and difficult to interpret." I have the joy of representing the Office of National Statistics and these matters are discussed at great length, and the feeling is that your Government—we come to this later—is running away from the professional standards of statisticians and going into this populist binge of yours with policies that have inaccuracies built into them, where there are no plans and which are bound to end in a car crash.

Francis Maude: Point one: Nigel Shadbolt, who is on my Transparency Board and was at the meeting we had of the board yesterday, strongly supported us putting the data out there. The fact that he says it is imperfect—I completely agree with everything he said. This data is not perfect but it is the data we have, so it is a very quick, simple thing to do, and there was lots of interest for people in combing through it and finding lots of stuff to query.

Q242 Paul Flynn: How are you going to measure whether it is working or not?

Francis Maude: People will tell us.

Q243 Paul Flynn: You have not got anything in place, any mechanism—plan, dare I use the word?

Francis Maude: This craving for plans.

Paul Flynn: Clearly, you have some phobia about plans and accuracy. It is all great stuff; it is all very daring stuff.

Francis Maude: People will tell us. There is a huge community of people who develop applications that use this data in different ways, which exploit it, sometimes for commercial gain, sometimes for social gain, and this is unplanned. This is fundamentally unplanned. This is a market, a mixed ecology, if you prefer that word, where lots of activity is going on—

Q244 Paul Flynn: Chaos.

Francis Maude: No, untidy. Not chaos. But very untidy. There is a difference between statistics and information, and Gus is completely right that the statistical process must be rigorous and accurate to the best extent that it can be. There is a difference between putting data out there and allowing other people, other organisations, to use it in different ways.

  Paul Flynn: I think your comments will come back to haunt you in future.

Q245 Chair: I thoroughly approve of all this.

Francis Maude: Good.

Chair: But when I visited the conference of the Government's statisticians earlier this year and extolled the virtue of putting raw data out, it was greeted with gasps of horror and astonishment. Is this just a slightly sort of closed­shop mentality? Is the national statistical service greeting this with open arms as much as you suggest or has there got to be a culture change there as well?

Francis Maude: Is there resistance on the basis that it is a competing approach? I have not particularly sensed that, but I think that we do have to be very clear that a lot of what we are doing is getting in management information and publishing it so that we can be held to account very directly for how we spend public money, for example. The statistical processes are different and they should be.

Sir Gus O'Donnell: The distinction is between what is a national statistic and what is data that is being put out, and they are two very different things.

Q246 Chair: That is a very good distinction, thank you for that. Moving on to efficiencies and funding cuts as drivers of reform, Cabinet Secretary, we went through a period where we were told that new money was necessary to facilitate reform. We are now in a different ballgame, where we are told that reductions in public spending are the great opportunity to drive reform. How is this going to be done and is it happening?

Sir Gus O'Donnell: Yes, it is happening. I think we have created, as it were, the classic burning platform. Every department has got to cut its admin spend by roughly around a third. This is helped by all the things they learned at Civil Service Live; they are thinking of innovative ways of going about this. We are already seeing people coming up with brand new ways of doing things, or ways of not doing things: just deciding that there is something that actually the Government was doing but does not need to do anymore. It can find other ways to achieve the given outcomes that we are after.

Q247 Chair: There are one or two departments who are not subject to the same cost pressures. How confident are you, for example, that DFID is being put through the same reorganisational mill as, say, the Ministry of Defence or DEFRA?

Sir Gus O'Donnell: Right, well I think you saw that yesterday, where the Department has released its aid effectiveness review, where they are looking at all of the money they spend through all the different channels, through the multilateral channels—

Q248 Chair: But what about their administrative overhead?

Sir Gus O'Donnell: They are required by Treasury to cut back on their administrative overheads. Now, it is an interesting question for them. They have, if you like, an even bigger challenge than other people because of the amount of money they have to spend, because of the 0.7% commitment, is actually increasing at the same time that we are requiring them to hit the efficiency standards of other departments. So, whereas other departments quite often are dealing with spending totals that are falling, they are dealing with spending totals that are increasing, so they have a double challenge.

Q249 Chair: MOD are losing in total—what? 25,000 people. How many people are DfID losing?

Sir Gus O'Donnell: I do not know the number off-hand, but DfID is tiny compared with MOD.

Q250 Chair: But in percentage terms? Are we expecting them to lose the same sort of percentage?

Sir Gus O'Donnell: Yes, I would think in terms of their admin budget, it would come down by similar sorts of amounts.

Q251 Chair: So 30%?

Sir Gus O'Donnell: I would say in the 20% to 30% range.

Q252 Paul Flynn: I get the impression of the Government as being like someone trying to drive a brand new car on an unfamiliar road with no street lighting, and there are two mechanics under the bonnet trying to redesign and refit a new engine in it.

Francis Maude: While we are driving it?

Ian Watmore: It's good fun. Formula 1.

Paul Flynn: There have been a number of mistakes and apologies and times when you have had to go back. You had the evacuation of British citizens from Libya this week; there was the climbdown on the idiotic idea to sell off the forests; the building schools initiative—another U­turn on that. You have not been in power very long to have had so many humiliating U­turns and now you have got a sort of fire brigade in at 10 Downing Street to avoid these future disasters. Wouldn't a plan have been possible in the early days to avoid the elephant traps that the Government has fallen into?

Sir Gus O'Donnell: Well, we have had plans and have plans.

Q253 Paul Flynn: What has gone wrong? Why have there been so many U­turns?

Francis Maude: There have not been that many.

Q254 Paul Flynn: Looking back at past Governments—

Francis Maude: We are a Government that does things. You earlier were saying we are doing lots of stuff, in a way that made it sound rather dismissive, but I took it as an immense compliment, actually. If you do a lot of stuff and do a lot of things and you press ahead at speed, as we are doing, is everything going to be perfect? Probably not.

Q255 Paul Flynn: I think experience showed us that doing stuff, major reforms, major reorganisations largely do not work and do not deliver benefits that account for the disorganisation and the chaos of the processes themselves. Generally I take a conservative point of view and you seem to take the revolutionary point of view.

Francis Maude: If I may put it like this, you are taking the reactionary point of view.

Q256 Paul Flynn: Chairman Mao would have been proud of you.

Francis Maude: You are taking the—was it Lord Melbourne who said, "Change? Aren't things bad enough already?"

Q257 Paul Flynn: Indeed. A very profound comment.

Francis Maude: I mean they are deeply reactionary, and splendid. It is very good to have the forces of crusted reaction represented here.

Q258 Paul Flynn: Could we take the Civil Service? Are they still a Rolls-Royce Civil Service, as we like to boast that they are, or does it need fundamental reform?

Francis Maude: I do not think anyone would claim that it is perfect.

Sir Gus O'Donnell: It is not perfect but let's have some objective measures. If you look at our university students, where do they want to go? Where do the best of them want to go? There is an objective measure: the Times Top 100. We are number three. We are swamped. We are trying to devise ways not to have quite so many applicants, because it is really difficult to get through the tens of thousands—

Q259 Chair: It is not the quality of people coming in then; it is the way they are trained and deployed and used. There is a sense I get from informal contacts with Ministers and special advisers that the Civil Service ain't what it used to be. The command chain is much more elastic; it has got into bad habits.

Sir Gus O'Donnell: It ain't what it used to be. Like I say, when I arrived my finance director in the Treasury, who had no professional qualifications, spent his time negotiating the one­year deal with each individual department. You know, come on. The idea of an HR person having an HR qualification was just completely—so it is very different from what it was before. It is much more professional.

Q260 Chair: I think the reason why FTSE 100 companies are not obsessed with qualifications is because a qualified finance director is no guarantee that he is a good finance director.

Sir Gus O'Donnell: Absolutely.

Q261 Chair: And just because you have not got a qualification does not mean that you are a bad finance director. So sticking labels and qualifications on people is no guarantee of quality of administration.

Sir Gus O'Donnell: True, but I think it certainly helps. In the old days, when I arrived in the Civil Service the main job of the finance director was to negotiate for that department with the Treasury to get as much money as possible. That is what it was about.

Q262 Chair: The National Security Council, presumably, approved the Prime Minister's suggestion of a no­fly zone for Libya, but forgot to understand that we do not have any carriers or Harriers in order to take part in such a no­fly zone. There seems to be more and more disconnects like this emerging.

Sir Gus O'Donnell: No, absolutely not. The point the Prime Minister was making in his statement to Parliament and his request to the National Security Council was that there was contingency planning going under way, and when you are in a situation as you are in Libya it is absolutely right there should be contingency planning. That contingency planning is being done by NATO as well. That is absolutely right.

Q263 Chair: Does that contingency planning include the possibility of bringing Ark Royal and the Harriers back into service?

Sir Gus O'Donnell: In terms of access, I cannot think of an area where you have not got—you have Malta, you have Italy—I really do not think that is an issue. We have been able to manage getting military flights into Libya, like I say, mostly from Malta.

Q264 Paul Flynn: I am delighted to hear that you visited Newport and you could have dropped in for a cup of tea if I had have known, and I would have brought you up to date that it is no longer called the Patent Office; it is called the Intellectual Property Office now. But I was delighted to hear that you praised the innovation of the staff there, which is good news. We were told by Professor Christopher Hood that with the slash and burn and the reductions of staff and all the other things that are going on under this Maoist Government that it is going to strip from the Civil Service probably some dead wood but also a great deal of the memory of past decisions made, a great deal of the genuine expertise, and the Civil Service will be poorer because of the loss of so many experienced and knowledgeable people. Isn't this true?

Sir Gus O'Donnell: No, I do not think it is true. The key for us—and this is about managing change well—is that we manage this process and we improve the average quality of the Civil Service through it. So we need to make sure, as we go through this process of reducing our numbers, that we end up with—and one of the reasons I am sure that we will do this is the Minister agreed that we would keep the Fast Stream going, so we will keep that source of really good quality graduates coming into the Civil Service. I think it is fair to say that as we go through these redundancy programmes we will find that we will not let the best performers go. We will raise the average standard; there is absolutely no question about that.

Q265 Paul Flynn: What impact has publishing the monthly updates for each department had on the efficiency of the departments?

Sir Gus O'Donnell: Which particular monthly updates are you talking about now?

Q266 Paul Flynn: Well, how many monthly updates do you have? We have a plethora of them, but I understand—

Sir Gus O'Donnell: There are monthly updates on business plans, but I think what that is doing is holding people to account. If you take something like the Cabinet Office, we have hit 85% of our commitments.

Francis Maude: We have a lot more than anyone else as well.

Sir Gus O'Donnell: We have a lot more than anybody else; that is absolutely true.

Q267 Chair: Do you think your milestones are creating too much pressure to make announcements?

Sir Gus O'Donnell: No, I don't—

Francis Maude: It is a very good question, actually, because we have not hit all of ours in the Cabinet Office. We do have a huge number and some of them are cross­Government, so they are not wholly within our control. That is fine. The excuse is—

Q268 Chair: I am rather encouraged that you are taking time to think about these things.

Francis Maude: The point is absolutely right: that we could have found some way of spatchcocking something together that would have enabled us to tick the box and we have not done that.

Q269 Chair: Take longer over House of Lords reform, please.

Francis Maude: The normal intervals in terms of House of Lords reform tend to be in the range of 90 years. I think it is much better that we should say, "No, we have not hit this milestone, and this is the reason," so explain it, rather than try and lash something together at short notice just to tick the box, and we are not going to do that. But it is a good discipline.

  Robert Halfon: Unlike my friend opposite, I am fairly Maoist when it comes to reform of the Civil Service.

  Paul Flynn: Hear, hear, comrade.

Q270 Robert Halfon: I asked this question of Oliver Letwin and it comes back to my earlier question: isn't what you are doing—which is very worthy and noble—internet 1.0 rather than internet 2.0, 3.0? In essence what you are doing is providing information, doing some modest reform, but you are more encyclopaedia than Wikipedia. You are not actually doing really fundamental reform that gives people the real chance to make a difference.

Francis Maude: In relation to what in particular?

Q271 Robert Halfon: In relation to the whole—in the way you describe it—flexible and adaptable and decentralised Civil Service and open Government, which I am fully in favour of. I think it is a good initiative, but it is really doing what people have done for the last five or 10 years. Okay, Government has been behind, but you are putting the information there but people have no input and feedback into what is going on. In other words it is an encyclopaedia of information rather than a Wikipedia of information, and that is the same with the reforms that you are describing: they are very modest and incremental, rather than fundamental.

Francis Maude: I think they will turn out to make a lot of difference but I do not think they are easily encapsulated into a plan. It goes back to this idea: is there a big, grand plan or are we, in Mr Flynn's phrase, just doing stuff?

  Paul Flynn: That was your phrase.

Francis Maude: Was it? I think a lot of the stuff we are doing actually adds up to things at the end of it being done in a very different way. For example, flattening structures: the Civil Service is very hierarchical and modern organisations do not have that many layers and over time we will see those layers eroding. That has happened in some agencies already.

Q272 Kelvin Hopkins: There is the theme about, "We don't think the Civil Service is as good as it was". We used to recruit the best minds; they were not just the most intelligent, but the intellectuals, almost, of our society, and I get the feeling it is not as good as it was. At our peril we will dismantle the Civil Service and get rid of that collective intelligence.

Francis Maude: I agree with that; well, I agree with the last part—at our peril. I do not agree that the Civil Service does not attract very, very good, bright people.

Sir Gus O'Donnell: The idea that we recruited the best minds—I am sorry, we didn't. If you believe we did, then why was it that there were no women at the top? Do they not have the best minds?

Q273 Kelvin Hopkins: That is another point. We say it is the best minds amongst the men, maybe.

Sir Gus O'Donnell: No, it is not another point; it is exactly the right point. We farmed in a very small pool. Now we are looking across the whole range to get the very best people, wherever they come from—

Q274 Kelvin Hopkins: Society has been sexist—

Sir Gus O'Donnell: —and I think we are, as a result, getting much better people. I would say the quality has gone up considerably.

Ian Watmore: Personally I agree that it is not what it used to be; I think it is much better than it used to be. I seriously do and in so many different ways. We have many more skills to call upon in the Civil Service even in the time I have been there, which is only seven years. It has been fantastic the way that we have brought some of the really best people from the private sector, the third sector and local government into the Civil Service and blended them with the traditional Civil Service skills.

Sir Gus O'Donnell: I do cringe when I look back on when we did monetary policy in the Treasury and it was done by classicists.

Francis Maude: Very clever classicists.

Sir Gus O'Donnell: Very clever classicists, but give me a break.

  

Q275 Chair: But isn't it rather sad, for example, that we do not have a scientific branch of the Civil Service anymore?

Francis Maude: We do, don't we?

Q276 Chair: Very much eclipsed from what it used to be.

Ian Watmore: I used to have responsibility for this in a previous department. In the department now known as BIS we have both the Government Chief Scientist, who is John Beddington, and Adrian Smith, who oversees the whole science and research budget. They are two of the world's best at what they do, not Britain's best.

Q277 Chair: But we are relying on a few individuals rather than a culture of—

Ian Watmore: And in every department, near enough, there is a leading chief scientific adviser. John Beddington meets with them every week; they are a very tight—

Q278 Chair: But they are rather more political appointments than they used to be, aren't they?

Ian Watmore: Well, no, I do not think so.

Sir Gus O'Donnell: They are not political appointments. If you look across the professional groups—take statisticians. The number of statisticians since 2000 has doubled. The number of economists I think has tripled. The number of people with strong professional backgrounds—when you go back to Yes Minister, do you remember the Yes Minister episode when the Minister was very impressed by the person who knew the answers to all his questions and had solutions and said, "Why hasn't that person got on any further?" and the answer was, "Well, he's a specialist." Actually, that cannot happen anymore. You do have a specialist that can get to the top. That is a very, very good message about the professionalisation of the Civil Service.

Chair: We will be coming back to the decline in strategic thinking in Government later.

Q279 Charlie Elphicke: So Francis, the other day in the Chamber you told me that you would be bringing forward new rules to stamp out lobbying by quangos. Can you tell us when those rules might be likely to be brought forward?

Francis Maude: No, but I will go from here and make a plan and announce it. There is not a huge amount that needs to be done.

Q280 Charlie Elphicke: You will do some stuff.

Francis Maude: Yes, exactly. That is right.

Q281 Charlie Elphicke: Thank you. Sir Gus, I think I am right in saying you were previously at the Treasury, and spent many years at the Treasury. Can you tell us what involvement you had in the merger that formed HMRC?

Sir Gus O'Donnell: Yes. I did join the Treasury. It is an example of coming in and not getting your first choice of department, actually. I was involved in that process. I wrote a report about it, and the big issue for me was that there were only, I think, two countries in the world that separated out the collection of indirect tax from direct tax, and one of them, I think, was Israel, which has now changed; the other one, I think, was either Malawi or Chad—I cannot remember—and it just seemed to me incredible that we had a situation where one set of tax people were going in to collect VAT and another set were going in to talk about corporation tax—massively burdensome on departments.

Francis Maude: And on business.

Sir Gus O'Donnell: And on business.

Q282 Charlie Elphicke: This was, then, very much your baby and your project, and you led it.

Sir Gus O'Donnell: No. Obviously, it was decided by Ministers, but I certainly worked very closely on that report—absolutely.

Q283 Charlie Elphicke: What lessons have you learnt as a matter of the change programme from the fact that it has been a total and unmitigated disaster?

Sir Gus O'Donnell: I do not think that is true for a second. I think, when you look at the record they have internationally in terms of how efficiently they collect revenue, the reduction in the burdens on businesses, I think it has been a success.

Q284 Chair: Take out the barb at the end: what lessons have you learnt from that in terms of the change programme?

Sir Gus O'Donnell: Lessons I have learnt? When you are making big changes like this, you do have to think very, very carefully about culture change. We were putting together two different groups. It is classically said that the Inland Revenue, basically, always wanted to negotiate a settlement, whereas Customs' view was, "Let's bang them up," basically, and putting those two cultures together was going to take quite some time. I think, in the decades to come, we will certainly do this. Like I say, what we have done is put together a single tax authority, which virtually every other country in the world did before us, and that is what I think we needed to do. Now, I think what we also have done since has helped, in that we have moved it towards a tax authority, and some of the things that were within it have moved to other places, which I think has been a good thing.

Q285 Charlie Elphicke: The point I am trying to get at is, if you look at the case of that particular organisation, you had a number of things present: a change programme plus a massively reducing budget, which is what we got in a larger steer across the whole of Government. What we found there is the usual IT disaster. This matter was debated in the House of Commons yesterday at great length—and Mr Hopkins is an expert on it as well—and we found in the course of the debate that the telephones are not answered very effectively, that there is total dislocation, that there has been a lot of change and it had not gone well, and so, as a result, HMRC is at the bottom of all departments in terms of morale. What I am trying to get at is you have a special place and special experience; having seen what happened and been involved in that process, what lessons would you apply and have you taken in relation to the wider reform of Government that we are now likely to have to ensure that it does not end up as a huge version of HMRC's restructure?

Sir Gus O'Donnell: I think one of the things we did there was set up somewhat too complex a management structure, with cross-responsibilities that meant that the accountabilities were not as clear as they should have been. I think that is one of the clear lessons; also, that it takes time to change cultures and that you need to be patient, but I think we are already seeing a lot of benefits, both in terms of reduced burdens for business and in terms of increased effectiveness of our revenue-collection agency, which is admired around the world, I stress.

Q286 Chair: Was it a mistake to finish up with people who knew about income tax finding themselves collecting VAT, and people who knew about VAT working on people's income-tax returns? We have all had cases in our surgeries where people have been struggling with the consequences of that.

Sir Gus O'Donnell: I think the biggest mistake, which we are trying to put right, was that people thinking about VAT were thinking about VAT and not thinking about the business that they were collecting the VAT from, and somebody else was thinking about collecting corporation tax from the same business, and the two were never speaking to each other. That was the problem.

Q287 Charlie Elphicke: In terms of departments' ability to step up to the plate, some departments are going to be less inclined to reform and are more backward looking. We had a seminar with some permanent secretaries a while back, and the Department for Transport was picked out as a particularly backward-looking department by those civil servants. How will you ensure that those departments come forward and are brought forward and reformed effectively?

Sir Gus O'Donnell: One of the things that I started some years ago was to do capability reviews of departments—and this was very radical; the NAO welcomed it —which was to publish our view about their capability in terms of strategy, delivery and the like. I think those programmes—I think everybody accepts—resulted in big improvements in capability in departments, and we will move on to a slightly different form of the same thing now we are in this change programme as well.

Q288 Charlie Elphicke: What role do you think the Cabinet Office should take in terms of coordinating transformation programmes across Government and how will you avoid the box-ticking culture that infected the past, which has done so much harm?

Sir Gus O'Donnell: The Cabinet Office will play a big role. Partly, the Minister is pushing us from the centre to be much tighter, if you like, on a number of key issues like consultancy spend, marketing spend and the like, but also centralised procurement; but we are also, as a collective, as a Civil Service, getting together at various times to learn lessons about our different change programmes. Like I said, we are all going through this process of reducing our admin spend by about a third. We are all going at it in ways that are suitable for departments. Obviously, you take a department like DWP—tens of thousands of people: it is rather different from somewhere like DCMS looking to have a cutback of around 50%—some of the others somewhat smaller—but we are trying to learn the lessons from each other and learn from the private sector in terms of getting people in who have experience of this, and we are using, as well, our non-executive directors, who will be incredibly useful for this process.

Q289 Charlie Elphicke: Do all the permanent secretaries tend to sit around and meet together and discuss these things?

Sir Gus O'Donnell: They certainly do.

Francis Maude: He said wearily.

Q290 Charlie Elphicke: Does the Cabinet Office and do Cabinet Office Ministers take much part in those meetings, or are they more about shaking the head at the Minister?

Sir Gus O'Donnell: No, no. Again, coming back to the importance of Civil Service Live with the new Government coming in, it was Ministers giving the messages about the changes they wanted, and that was very clear and we carry on. Since then we have had Top-200 meetings, where we have got the 200 top civil servants together and got the Prime Minister and Deputy Prime Minister. I think the last one we did in the Treasury, and we had the Chancellor come and talk about change, so we do it all the time. For us, like I say, this is the big challenge: can we meet these cuts in our admin budgets and our staff, and do better with less?

Q291 Charlie Elphicke: Finally, could I just put to the Minister: the risk is, with a plan, as Mr Flynn says, you just end up doing stuff. I think it is important to have a concrete plan, but there can be and has been in the past a tendency to tick boxes and say, "Oh, well, that is fine. We have ticked this box and ticked that box." You then end up with this whole disastrous culture that has built up, where no one takes responsibility and it does not matter what happens so long as the box is ticked. How will you avoid that?

Francis Maude: By, I hope, being fairly rigorous about the stuff we do being substantive, and to say what we are going to do and then do it. The structural reform plans, which are basically to-do lists—and very useful from that point of view—do put a discipline on you, and I do not think have led, as I said before, to a box-ticking approach. We want the stuff that we do to be substantive and serious. It might be useful to get Ian to talk about the transformation stuff in the shared services.

Ian Watmore: On your last question, we used to have a phrase called "hitting the target and missing the point", which I thought kind of summed it up quite nicely. The Cabinet Office's role in helping departments in the change is very widespread now. That is part of my responsibility. I have a director in my team who is focused on everything that is going on in my particular department, so that there is real knowledge and understanding, and there are probably two key roles that we play. One is we help people share what they are doing, so that department A knows about what department B is doing, and put the two of them together so that they can learn from each other, which is incredibly powerful.

The second thing we are trying to do is create shared capabilities that everybody can use—shared services and so on. For example, when we went to renegotiate the supplier contracts across Government, we did that as a whole of Government, not each individual department, and we found expert commercial directors in different departments who would then go and sit down with a company like BT or Fujitsu or whoever and renegotiate the contract on behalf of the whole of Government, and we saved £1 billion in that way, which gave benefit back to the departments in that way. We are also, following Philip Green's report, looking to bring commodity procurement together into a single place, to take that burden away from all the individual departments, both to get a better price and to do the actual procuring more efficiently in itself. There are quite a number of ways in which the Cabinet Office is helping and leading, but ultimately, obviously, departments have to change themselves, and we are also very cognisant of that.

Francis Maude: There are some other cross-cutting things that we are leading from the Cabinet Office as well. For example, on public-sector fraud and error, and uncollected debt, where the National Fraud Authority recently concluded that there was around £21 billion worth of public-sector fraud. There is a yet unquantified amount of error and there is quite a—

Q292 Chair: £21 billion?

Francis Maude: £21 billion, which is a lot of money, and so what we are doing, I now, at the Prime Minister's request, am chairing a taskforce with a lot of people from around Government, but also from the private sector, where, again, without having a plan, what we are doing is a whole lot of pilots to look at: where is the low-hanging fruit and how can you use data analytics to find out where the likelihood is? The HMRC—now recently just slightly reviled here—has done a very interesting pilot on—I cannot remember what the phrase is—single-person fraud, where people claim to be living alone but are not. The data analytics threw out a sample of 1,000 people who were high-risk. They wrote 750 letters. As a result, without any follow-up at all, they have saved £1.5 million a year from people who have simply said, "I am stopping claiming the benefit".

Q293 Chair: Because they think they have been found out.

Francis Maude: Because they have been found out, and is that fraud or is that error? Apparently, there is a classification of deliberate error, which is—

Chair: Can we move on? We might have to do an inquiry on public-sector fraud.

Q294 Robert Halfon: On reducing the costs of administration, are you going to cut substantially the costs of departmental Government conferences? For example, the Department for Work and Pensions spent £115 million on management conferences over 10 years; the Home Office spent £43 million. The figures go on and on and on.

Francis Maude: These conferences tend to come under the classification of marketing spend, and they have to come to me for approval.

Q295 Chair: Why can't they be like Civil Service Live and be free?

Francis Maude: A very good question, and the answer is: a lot of them can be.

Ian Watmore: A good example of that is that the finance profession now has its quarterly meetings sponsored as well so that they are free.

Q296 Robert Halfon: What are you going to do to stop the spending of millions of pounds going to conferences by management of departments?

Ian Watmore: I think that managers of departments are now—this is true for all of us; I can say it as one of them. Genuinely, you challenge every one of those requests, and it has to be absolutely top-value before you—

Q297 Robert Halfon: Have you cut the spending? That is what I am asking.

Ian Watmore: Yes, definitely. Marketing spend is—

Q298 Chair: I am sorry; we are going to move on. We are pressed for time. Coming back to the change programme, I think the most chilling evidence we have had so far is from Professor Kakabadse, who told us, "About a third of major change programmes that I have seen"—and he does research into this subject—"succeed, and there is one fundamental reason: the top is pulling together. I do not see that here." What have you got to say to that?

Ian Watmore: I actually do change for a living as well and have researched a lot of these things, and he would be right to say that change programmes work. One of the necessary conditions is that top management is a unified team and focused on a single agenda. Probably, for me, the bigger lesson of successful change programmes is that that is necessary but, by far and away, insufficient. What is sufficient is when the staff are actively engaged in that change programme and it is done by them and for them, not to them. I would say, from my observation around the Whitehall departments—and I am looking at them all, as well as just us in the Cabinet Office—I think there is a real unity of purpose in the top management teams. This is where we get into one of these catch-22s: to engage with the staff, usually we have to get them together to talk to them. And then we get castigated for wasting money on conferences. It is a really important part of the lesson, and I think we are managing these change programmes extremely well.

Q299 Chair: I am sorry, I am moving on. If you did a private survey, Cabinet Secretary, of all the permanent secretaries, how many would believe in the virtue of decentralisation, the post-bureaucratic age and the Big Society?

Sir Gus O'Donnell: It depends how you define all of those terms. I think they would strongly believe that there is a change programme here and these are Government policies, and they will get on and implement them and they will do so with commitment and passion to show that they can manage this change successfully. I think the proof of that is that we are. One of the really interesting statistics for me is we do this people survey every year and we ask about—classic to the points that Ian was making—how engaged our staff are. Our engagement index was 58%. We did this again after the Spending Review, when people knew that these big cuts were coming, and it went down to 56%, which is a very small change. Actually, I think people are up for this and they understand it, and we will be able to track those numbers through time. We will be able to show that we have delivered this change and we have improved the engagement of our workforce. It is a great challenge for us but I think we are definitely up for it.

Q300 Chair: He went on to say: "From all of my research, any change programme that is deep takes at least three to five years to bed in." He goes on to say: "If people who are implementing the change feel that what they are told to do is out of keeping with what they are actually finding, there will be resistance, and there is resistance the nearer they are to service provision… five years could extend to seven years. You could get something called change fatigue."

Ian Watmore: Again, I recognise everything he says there. Particularly where the change involves deep cultural change—we were talking about it earlier—it can be longer. Many merged companies—I do not want to name examples but I can think of several that came together from Company A and Company B—still, 10 or 15 years later, refer to the Company A culture or the Company B culture, so he is absolutely right.

As far as we are concerned, the urgency of the change that we are doing in the Whitehall departments is to reduce the head-office costs, because if we do not reduce the head-office costs, we will impact the frontline costs, so we are putting a lot of effort into the head-office costs and the avoidable costs, to get that out of the way now, so that, over the rest of this Parliament, when the wider policy reforms come in, we have got a solid and focused leadership team on delivering that change. You are absolutely right: it will take that sort of timeframe.

Q301 Chair: Then he says that this decentralisation "is a fundamental change of mindset, and that change of mindset has bedevilled many an organisation, and the investment that many organisations have put in to facilitate that change of mindset has been extensive." Then he goes on to say that you probably get considerable redundancy because some people are too expensive to change or retrain, so "if you don't want that, you are going to have a very different Civil Service and a very different set of values" in order to achieve this change. So, are you going to be able to achieve all that?

Ian Watmore: A lot to agree with, and I think there are some great case studies around, but one I particularly like, one of my favourite chief executives is Justin King at Sainsbury's, who, on the first day, when the whole of head office was lining up by its desks waiting for him to come in, with some trepidation, never turned up and spent the whole day in a store. It completely sent a message through head office that, actually, this was different: that head office was not head office anymore, telling stores what to do; it was actually there to support the stores in the way they served customers. I think that is a great analogue for what we are trying to achieve in the public services. We are trying to get the front line to be enabled and for head office to support.

Q302 Chair: Cabinet Secretary, what are you doing to prepare for this change? Are you going to go and work in a social security office?

Sir Gus O'Donnell: I get out a lot and go around the country. Like I say, Newport was an example. I have been to visit a number of the Government Offices of the Regions that are shutting. I get out. I think, as part of being Head of the Civil Service, you have to do this. The thing I would say is the point about the front line: what motivates civil servants and public-sector people in general is being able to deliver a really good service for the public. That is what gets them out of bed in the morning. If we can empower them with better ways to improve public service delivery, we will get this change going. A lot for us is to deliver, and some of these Pacesetter programmes, the Lean programmes, are all about getting the front line telling you how to improve matters. So, I think we are in a good position, where, if we get this change right, we will be able to get a more enthusiastic, engaged front line.

Q303 Charlie Elphicke: Sir Gus, who is the change officer at the Treasury?

Sir Gus O'Donnell: The change officer is Nick Macpherson, the permanent secretary. He has got to be in charge of the change. You have got to lead this from the top.

Q304 Charlie Elphicke: Is that the case in each department?

Sir Gus O'Donnell: Absolutely. It is up to the permanent secretaries—and I will hold them to account—to make sure that change happens within their department. Obviously, when you are in a department like DWP, it is massive, so you need help. You will get someone who is dealing with the individual change programmes but ultimately this is all about leadership, and I think the culture change—coming back to what you were talking about—is that we have got to get that leadership throughout the organisation. There are people who are going to have to have some honest and tough discussions. I have had to go and talk to groups where we are making a number of them compulsorily redundant, where we are starting voluntary redundancy programmes. The one thing that will not change is our values: we will still stick with honesty, objectivity, integrity and impartiality. That is absolutely crucial, but you need to do it with pace and professionalism, and a bit of pride and passion as well.

Q305 Chair: We must move on to the questions we want to ask about the Chair of the UK Statistics Authority, but in our call for evidence you will have seen we have suggested some principles of good governance. But it has been put to us we should not be proposing principles; you should be proposing principles. Would you, in response to that suggested list of principles, perhaps submit to us your own proposals for a list of principles of good governance that match the challenge you are facing post-bureaucratic age, decentralisation, openness and transparency, and the Big Society?

Francis Maude: I think that is a good challenge.

Chair: Thank you very much.

Sir Gus O'Donnell: The one thing I would just say is there are lots of these principles around.

Q306 Chair: We want to know what yours are.

Francis Maude: If you do not like them, we have got others.

Q307 Chair: You have not got a plan, but we would like to know what the principles are.

Sir Gus O'Donnell: No, we have—we have a Code, which specifies our values.

Ian Watmore: We now have a plan to create plans.

Q308 Chair: I look forward to that. We are now moving on to the issue of the Chair of the UK Statistics Authority. Can you say on what basis you decided that the time commitment for the new chair should be reduced from the current three days a week—and, in fact, the current chair says he is doing four days a week—to merely two days a week?

Francis Maude: It is my understanding that the current chair started on three days a week but then, at his suggestion—and I think this was part of the original arrangement—reduced it at some stage last year to two days a week.

Q309 Chair: That is not our understanding. We are going to be taking evidence from him ourselves. Our understanding is he is very concerned that the job is being downgraded.

Francis Maude: No, it is not being downgraded. It is still an extremely senior job but it is going to be paid less, as most of us in the public service are being paid less.

Q310 Chair: Yes, but the job is being cut. It won't affect him, of course, but the salary paid to the Chair is going to be cut by two-thirds.

Francis Maude: Sir Michael, who I have the highest regard for, started on three days a week at £150,000 a year and came down in the course of last year—is my understanding; Gus may know—to £100,000 a year for two days a week.

Q311 Chair: Now it is going to be about £50,000 a year for two days a week.

Francis Maude: £57,000 a year for two days a week. It is the same salary as the Prime Minister. Our general principle—you asked for some principles—is that people should only exceptionally in the public service be paid more than the Prime Minister.

Q312 Chair: Are you aware that there is very widespread concern that this will not attract a suitable candidate?

Francis Maude: I have heard that concern. I do not believe it and we will see what the field of candidates is. It is a very high-prestige appointment, but it is in the public service and—

Q313 Chair: Who did you consult about this?

Francis Maude: I would have received advice, I guess.

Q314 Chair: Did the Royal Statistical Society express any views on this?

Francis Maude: Not that I can remember; not directly to me. I would completely understand that the world of statisticians would want this to be paid more—that is not a complete surprise to me.

Q315 Chair: There is a view that Sir Michael Scholar has been a bit too outspoken, a bit too difficult, and you want an easier UKSA in the future.

Francis Maude: No, but as a general statement I would say we have slightly fallen into the trap in the public service of thinking that you calibrate the status and importance of a job by the salary that is attached to it, and I contest that. I think people do not primarily take on demanding public-service roles for the money; if they do, they are insane. They do it because it matters. I think the public-service ethos is very strong. I want the person who takes on this role as chair of the UK Statistics Authority to be someone of great independence and authority and seriousness, and not someone who is doing it for the money.

Q316 Paul Flynn: This is a splendid view of society that we are having this morning: this sort of monastic dedication that someone comes into a job of this kind, regardless of the money.

Francis Maude: I am an idealist.

Q317 Paul Flynn: It is the sort of thing you get from a Cabinet of millionaires, whose life continues whether they get paid or not. Nothing changes things to believe in such arrant nonsense. This is a downgrading of the job from £150,000, which it was originally, to £100,000, to £57,000, and of course you will get people who think twice about it. They might not be able to get jobs for the rest of the week. It might be part of the Big Society: he may be expected to volunteer for the third day, perhaps. Perhaps this is the concept. But we know that Sir Michael Scholar has done his job and been a thorn in the side of Government, and attacked Government—particularly one Government department. He has also attacked the Opposition in this way. What we see the longer one stays here, you notice that when there is a change of Government, there is a change of scripts. The attitude from this Government seemed to be very similar to some of the caution from the other Government, who, to their great credit, introduced the UK Statistics Authority, which was a major advance to have a body that would have integrity, that would be above the political fray. He has done that, and now the job is being downgraded by this reduction in salary. Can you tell me how many people have applied since 27 February for the job?

Francis Maude: I do not have the slightest idea.

Q318 Paul Flynn: Would none be somewhere near the mark?

Francis Maude: It could be, but if that is when the advertisement closed, which was—

Sir Gus O'Donnell: Opened.

Francis Maude: If it opened five days ago or whatever it is, I would not expect there to be a huge amount.

Sir Gus O'Donnell: Always, when we get these things and we advertise, it takes some time. It is usually right at the end that people apply.

Q319 Chair: Have you got anybody in mind to fill this job?

Sir Gus O'Donnell: I know a number of people who could do it well.

Q320 Chair: Would they be former civil servants, by any chance?

Sir Gus O'Donnell: It is really important that we have people like Sir Michael Scholar. We were just saying—and I completely agree—that he has done a magnificent job, so I think ruling out former civil servants would be a massive mistake, but it will be done by fair and open competition.

Q321 Paul Flynn: The job descriptions are virtually identical—the one in 2007 and the one last month.

Sir Gus O'Donnell: It is slightly different in the sense that—

Paul Flynn: I will read them to you, if you like.

Sir Gus O'Donnell: No, I think there is one big important change in that what Michael did, to his enormous credit, was set the thing up from the start. That is a massive job, and now what we are doing is someone needs to build on what Michael has done, and carry this organisation, which has created great credibility for itself, and carry that forward. It is a different job in that sense.

Q322 Paul Flynn: There are other members of the authority as well. Have they been consulted on this salary reduction and this reduction in the number of days?

Sir Gus O'Donnell: It is a decision for Ministers in the sense that this has been a policy decision that goes across the whole range.

Q323 Chair: That is a no, then—they have not been consulted, have they?

Sir Gus O'Donnell: I think we are very aware of where other members of the Board stand.

Q324 Chair: There is a very strong sense that the Government is doing this to the UKSA rather than this being an independent organisation, which is obviously what it should be.

Ian Watmore: I am not personally involved in this issue, but I would say that the whole benchmark of the Prime Minister's salary is something we are applying on a whole range of jobs across Government.

Q325 Chair: Statistically, it is a rather arbitrary measure of the right salary.

Ian Watmore: It is and, at all points, we say—

Q326 Chair: It passes the Daily Mail test. I do not think it passes the Office for National Statistics test.

Ian Watmore: It is not a question of passing anybody's tests or not; it is a question of the fact that all you asked was: was this being particular because of an issue with that particular body? I am saying the application of the Prime Minister's salary is something much broader and, therefore, if your job is two days a week, it is two-fifths of the Prime Minister's salary, and that is the right number.

Q327 Kelvin Hopkins: Just to follow this theme, the key to it all is we must trust what we get from the national statistical service. If the Chairman is appointed by Government to be a Government patsy who will do what he is told by Government and pressurise his staff to go along, in a sense—I am exaggerating slightly—we will not trust those statistics anymore. I taught statistics at a modest level, I use statistics a lot, and I want to know that we have got somebody like Michael Scholar in charge in future, who will stand up and speak the truth.

Ian Watmore: I think that is a quality issue.

Sir Gus O'Donnell: We agree with you.

Francis Maude: I think your Committee does pre-appointment scrutiny, don't you?

Q328 Chair: I will come on to the scrutiny process. When Sir Michael Scholar was appointed, the Government announced that there would be a Motion on the floor of the House to endorse his appointment. Do you envisage a similar arrangement this time?

Francis Maude: I had not thought about it but I would expect that.

Q329 Chair: We are thinking about. We think it is very important.

Francis Maude: No, sure. Making it up on the hoof, I would say yes, definitely. I totally agree with what Mr Hopkins has said. I think it needs to be someone of clear authority and independence, and I absolutely do not want it to be a Government patsy.

Q330 Chair: Should we be looking at a different selection process, rather more like the Office for Budget Responsibility, which was established by the Treasury Select Committee? We have got no complaint about Sir Michael Scholar and how that was done, but shouldn't it be made a more independent appointment process along the lines of OBR?

Sir Gus O'Donnell: I would stress what we said about this appointment, like many others, is that it would be subject to scrutiny in the sense of going to the Committee, and there is a vote on the floor of the House, as you say, so this seems a very strong way of doing things. I hope that we will get someone as good as Michael Scholar, but the last process seemed to work very well, so I hope we will be able to—

Q331 Chair: May I just put you on notice: I think we are going to come forward with some proposals on this, and could we have a discussion about it?

Francis Maude: Yes, definitely. I—

Q332 Chair: Particularly with the question mark over some people saying that the office is being downgraded, a transparently independent appointment process is probably more important than ever. Would you not agree?

Francis Maude: I understand that.

Q333 Charlie Elphicke: Just to be totally clear in my own mind, are you saying that, in relation to this appointment, this Committee will be able to have an appointment ratification hearing or be involved in the process more widely?

Francis Maude: Ordinary pre-appointment scrutiny will operate, clearly. It sounds like you have got some ideas about how that might be enhanced, which we will obviously look at.

Q334 Charlie Elphicke: What I am trying to get at is: in, I think, the OBR, the Treasury Select Committee had to approve the appointment of Mr Chote, if I recall correctly. Is the intention to allow this Committee to have a similar process in relation to the head of the authority?

Francis Maude: The difference with the OBR appointment over ordinary scrutiny was that they had a veto, whereas ordinarily the Select Committee can make a recommendation, and I think it has only once happened that the Government—it was the last Government, I stress—has ignored the Select Committee's recommendation. We will look at that. I absolutely understand the case and the argument, and we will consider it.

Q335 Chair: Thank you. Finally, on the issue of pre-release, it was the policy of Her Majesty's Official Opposition to look at the whole question of pre-release of statistics to Government departments much more rigorously than is now the Government's policy. Why is this?

Francis Maude: The pre-release rules are much more stringent than they used to be. Gus will be more familiar with the detail of how they operate now.

Chair: But they are not the same as what you personally advocated when you were in opposition.

Q336 Paul Flynn: Having sat through the entire Bill that went through—the Statistics Bill—I saw your representatives from the Conservative party and the Lib Dem party constantly advocate getting rid of the pre-release period, rightly pointing out that, if you are going to have faith in Government statistics, you should not continue to allow the Government Ministers and advisers to have 24 hours in which they can spin their reaction to it. This was your consistent position—Dominic Grieve said so—and if we are going to build up faith in the integrity of Government statistics, we must get rid of that pre-release period; otherwise, the accusation will come again, as it came before, that the Government is spinning the figures before their release. Why on earth should there be a pre-release period?

Francis Maude: They are not spinning them before they are released because—

Q337 Paul Flynn: Why do you want 24 hours, then, to have the figures before anyone else does?

Francis Maude: I think, certainly in relation to some economic statistics, there has always been a view that it is important to have some interpretation around—

Q338 Paul Flynn: This is not what you said in Opposition. This is not what you said before you were elected.

Francis Maude: Gus, do you want to deal with this?

Sir Gus O'Donnell: Sure. It is complex, because you are looking at some statistics that are, on the face of it, difficult to explain and you need to understand the detail behind them, and understand whether this is a matter that is just because of seasonal effects or something else. We have reduced the amount of time and the number of people who have access to figures on the pre-release, so there have been changes, but Ministers decided to keep a certain amount of time and a certain, smaller number of people—

Q339 Chair: Isn't that the problem? So long as this remains a decision for Ministers, isn't this suspicion inevitable, and shouldn't, actually, the whole question of pre-release be handed over to the UK Statistics Authority for them to determine when Ministers and civil servants can make representations? Isn't there a bit of a conflict here? Here we are, we have just been talking about data, openness, transparency, and now, when the really hot stuff is coming out, "Oh, no, we cannot let the people have that straight away. We have got to have a chance to look at it and make sure we really understand it so, when it comes out, we know exactly what to say." I know that Government is a very difficult and pressured process, but shouldn't this be handed over to the UKSA to regulate?

Francis Maude: I am perfectly sympathetic to what you are saying, and I completely understand the argument.

Q340 Paul Flynn: In 1988, I was approached by a group of statisticians from my constituency who were very concerned that their department was being transferred, I believe, from the Cabinet Office to the Treasury—the department that had the greatest vested interest in fiddling the figures—and I wrote to Margaret Thatcher at the time about that. That suspicion has gone on all that time, and the great problem that the UK Statistics Authority was meant to address was the fact that there is very little credibility in Government statistics: people just do not believe. They believe that politicians fiddle the figures, and what you are doing is adding to that, unless you get rid of the pre-release period.

Francis Maude: I contest that there is no trust in Government statistics—there is. There is a high level of trust in them. While I understand and have listened sympathetically to the arguments about pre-release—and I do absolutely understand the argument—I do not believe, actually, that that contributes hugely to any loss of trust in statistics, but I understand the case.

Paul Flynn: Would you ask the Authority—

Chair: We are running out of time, I am afraid.

Q341 Kelvin Hopkins: Just on this point, if we want transparency, should we not have transparency as to how the statistical authorities calculate the statistics, so they can explain—not the politicians but the statisticians—how they do it? Like seasonal adjustment, for example; if that was explained by the statistics people and not by the politicians, people would trust it.

Francis Maude: I think it does happen to a much greater extent now, doesn't it?

Sir Gus O'Donnell: That is exactly what happens. Let me give you the example of, I suppose, the most recent, when the GDP figures for the fourth quarter were a shock to the market. The market's forecast was absolutely right, apart from the sign. That was met by the statisticians giving a press conference at the ONS, and they explained the details of the figures, the make-up, the adjustments they had made and all the rest of it, and the fact that, when we put out the first release of Q4 numbers, you have not got all the data so you are market some estimates, and they will be revised. We put out a flash estimate rather ahead of other countries, so it is somewhat more unreliable, but it gets better, obviously.

Q342 Kelvin Hopkins: I trust Michael Scholar but I do not trust SpAds in Government departments.

Sir Gus O'Donnell: This is really—

Chair: There is no need to respond to that.

Sir Gus O'Donnell: Just one thing: this is Jil Matheson. This is the ONS. There is a board up there, but you are kind of—

Kelvin Hopkins: Yes, fair enough.

Chair: She may be on our side on this one, though she may not be able to say so.

Q343 Charlie Elphicke: Sir Gus, you are sitting, I believe—or will be sitting—on the panel in relation to the recruitment of this person. Can I urge some things on you in the light of the National Security Council, or can I ask you—

Chair: We are about to discuss who is on the panel.

Charlie Elphicke: Fair enough, but if you were to be on the panel, could I ask you for your view—

Sir Gus O'Donnell: Which particular job are we talking about now?

Q344 Charlie Elphicke: This one—Chair of UKSA. If you were on this particular panel, could I ask you: in the light of the National Security Council appointment, do you think it would be healthy not to have a retread civil servant; to have someone who is in favour of the principle that the data belongs to the people and not to the experts, and that the popularisation of data should happen as much as possible? Also, I would hope serious consideration would be given not to being the usual old man, but maybe this time we should have a woman.

Sir Gus O'Donnell: Your reference there to the National Security Council—did you mean the National Security Council?

Chair: You mean the National Security Adviser, I think.

Charlie Elphicke: Yes.

Sir Gus O'Donnell: The National Security Adviser. I am sorry. I think there is a job description, which the panel will be looking at and asking who best meets that, and we will advertise it openly and fairly, and we will do it on the principle of meritocracy. You seem to be wanting this person to adopt certain attributes related to current Government policy, and yet, as I understand the Chairman and many other people, they want this person to be strongly independent of Government policy, so I kind of put that challenge back to you as to precisely what you want.

Chair: Touché.

Sir Gus O'Donnell: But we will be looking for the best possible person. You talked about retreads from the Civil Service, and yet, at the same time, we are saying Michael Scholar did a tremendous job, which he absolutely did. I think it would be wrong to rule out any particular group, but I strongly agree with your point about gender. I am very proud of the fact that, if you look at the Civil Service and look at what we have done with permanent secretaries, the proportions are incredibly good and, when you look at the FTSE 100 executive directors, they are 5.5%—2% for FTSE chairs.

Charlie Elphicke: Trade unions are shocking too. They are Luddite dinosaurs dominated by old men and it is a disgrace. That should be dealt with as much as corporates.

Chair: I think that is moving off the point. We may well report on this question of the role of UKSA and the chairmanship of UKSA. We will be taking further evidence and we may do a call for evidence. May I thank you all very much indeed for coming and joining us this morning? I think it has been a very productive session. Thank you to my colleagues as well.

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Prepared 22 September 2011