The Big Society - Public Administration Committee Contents


Examination of Witnesses (Questions 151-200)

Q151 Chair: Welcome to this session of the Public Administration Select Committee on the Big Society. We very much want to concentrate on what this means for the Government, and what Ministers and civil servants should be doing, rather than dwell too much on the broader philosophical questions raised by the Big Society. We do not think that as a committee we will reach a massive amount of agreement on the more political aspects of it, but will be able to agree on some recommendations about how the administration should approach the issue. For the record, may I welcome you and ask each to identify himself?

Adrian Brown: My name is Adrian Brown and I am an associate at the Institute for Government.

Andrew Haldenby: I am Andrew Haldenby, Director of Reform.

Gareth Davies: I am Gareth Davies, Head of the Office of Civil Society.

Matthew Taylor: I am Matthew Taylor, Chief Executive of the RSA.

Q152 Chair: Thank you very much indeed. What are the limits to the Government's role in enabling the Big Society? Who would like to start?

Gareth Davies: Shall I start in terms of what we are doing both in the Cabinet Office and around Whitehall more generally?

Chair: That would be very helpful.

Gareth Davies: As to how Ministers see the role of Whitehall in delivering the Big Society, I would like to make three key points. First, it is to do with one-off reforms, so effectively it is implementing the coalition programme for Government. These are the reforms that you see in the Localism Bill and the Department for Education with free schools and academies. They are the one-off reforms that Whitehall needs to make, effectively giving up the power it used to have. The second thing is the opening up of the supply of public services and diversity of supply. This is not about moving necessarily just from the public to the private sector; it is about moving to a range of providers to see who is best suited to meet the needs of communities and individuals.

Q153 Chair: So, that is about how to identify those best providers?

Gareth Davies: That is a commissioning role of Whitehall. A good example of that is the work programme. Indeed, we are seeing a range of providers being brought in—300 from the voluntary and community sectors and a couple of prime contractors. That is the second role. The third role is a new one that is certainly different from some of the skills we have seen in Whitehall over the last decade, if not more. That is the mobilisation and incubation of new ideas. Rather than taking power and solving problems ourselves in the centre, it is about how we can help others, be they individuals or businesses, to solve their own problems; it is about promoting social action. It comes out of some of the theories of behaviour change and nudge. We have the behaviour change unit in the Cabinet Office. A good example of this is the recent work of the Department of Health on preventative health. We have an agreement with a number of food manufacturers to reduce salt content in food. For example, Asda has reduced the advertising of alcohol at the front of their stores but with a non-regulatory approach. So, it is a corralling, supporting and helping people to solve their own problems. Those are the three roles that we see in Whitehall.

Q154 Chair: Who would like to critique that answer?

Matthew Taylor: In a way, it is a pity that you are not having some conversation about what the concept is, although I understand why after your conversations at your last meeting you do not want to go there, because one of the things Government has to do is define it in a way that people understand. I think that is a weakness at the moment. The Big Society brand has become toxic. Therefore, it is quite difficult for Government to use their power to mobilise energy both inside and outside Government when there is a lack of clarity about the core concept. Government have to say what it is. I say that as someone who has a very clear idea of what it should be about, and who was and still is enthusiastic about the concept as I see it.

Q155 Chair: We have one question on this later on, and I suggest that we move to that question now and get it out of the way. In a nutshell, what is it? How should the Prime Minister more usefully describe it?

Matthew Taylor: I left No. 10 five years ago. The first annual lecture that I gave at the RSA—I do one every year, and it is my fifth tonight—was on what I called the social aspiration gap. It is an ugly phrase. What I meant by it was that there is a gap between the kind of future to which most people aspire and the future they are likely to create if they carry on thinking and behaving as they do now. If you like, this is a citizen-centric idea of change. It understands that the problem for society is how we encourage people to think and behave in ways they need to if we want to create the kind of future we want. There is a whole range of social problems from health to sustainability in relation to lots of public services, for example, where it is inconceivable that we can achieve our goals if people themselves do not choose to behave differently. It was Labour that first commissioned a report on behaviour change to start to explore that question, and that work has continued. For me, the heart of the Big Society is that insight. Government have to think very hard about how they encourage people to be the individuals they need to be to create the future they want. That is the starting point.

You then bring to that an idea that is broadly associated with the left and the right. From the right it is a kind of critique of central Government that there are lots of reasons why central Government find it hard to achieve what they try to achieve. There are systemic reasons why Government are not very good at engaging with people and getting things right. From the left it is a recognition that we are social animals, and that society and community matter and we need collective capacity. I think all of that is rich and important. As you heard in your last conversation, there are people on the left and right who are interested in these ideas. I think that is what it is about.

Briefly, I think the problem in relation to Government is that they have lacked clarity as to what the concept is about and have not told us how we would know it was happening. I think that is a major problem for Government. I understand the worry about having too many targets—under Labour there were too many—but to specify an objective but have no way to define whether or not it is being achieved seems to me to be an abrogation of accountability, and also it does not give public servants a framework to understand what they are trying to achieve.

The third thing is that you need to make the concept one that means something across Whitehall, where again I think there is a real weakness. The contrast I would draw is with Tony Blair's approach to public service reform, which, whether you like it or not, had very strong core ideas. The core idea of public service reform was: public services, because there is no competition and profit, do not achieve the kinds of improvements in productivity that are achieved in the private sector. Therefore, you have to bring to the public sector pressures for improvement. The public service reform model was a strategic centre, contestability in provision, and voice and choice for consumers. That model was applied in various ways to education and health, and there was a kind of core to it that people understood. No. 10 basically fought across Whitehall to try to get that model accepted in one way or another with varying results. The Big Society does not have that kind of adamantine centre to it that you could take from department to department and say, "This is what it means for you." That would enable No. 10, which I think is woefully under-powered in driving this agenda, to have the kinds of battles it needs to have across Whitehall to make the Big Society win out across other views about power.

Q156 Chair: I am keen to let the conversation flow for a minute and then I will bring in one or two other colleagues. Mr Haldenby?

Andrew Haldenby: I very much agree with Matthew's point about the absence of clarity about the idea. For example, one part of the Big Society in the Government's view is opening up public service. It is something we look at a lot. We have been expecting a White Paper on the opening up of public services since January. The spending review last October promised that White Paper in January. Then the Prime Minister wrote an article in February to say it would be out within two months, and it is still not out. Many people both within and without Government are waiting for that, so that is another piece of evidence that there is not an intellectual definition for the idea. Particularly on the public services side, we have to observe that the Government's position is changing. In particular, in the case of the NHS the Government have gone from a position of opening it up to competition with contestability within the NHS to something now very different. We do not quite know what it is going to be, but there will be much greater limits on that. The Prime Minister's speech on Monday changed his position on targets within the NHS. He said he was now willing to reconsider central targets, for example on waiting times in the NHS, whereas when in opposition the Conservative Party campaigned against targets in public services. I think the Government are in retreat on public service reform, which further confuses the picture on what the Big Society is.

Adrian Brown: I would agree with a lot of what has already been said. I will have a crack at a simple definition and how I think about the Big Society, which I suppose is from the perspective of someone in Whitehall who is trying to make sense of it. It is the way that the Institute for Government tries to think about things. Traditionally, the state has thought of itself as deploying resources that have been collected from the public in the best way to deliver public services and the other things Government need to do. How can they deploy those resources most efficiently and effectively to deliver the services that they are asked to perform? I think the Big Society challenges the notion of the finite resource pool that is available to the state and says, "Think beyond just the money you have in your hands to try to deliver these public services and about the resources outside the state, be they from private individuals, private companies, charities or whatever, to help with the ends that the state is trying to achieve." So, it is expanding the idea of what resources are available. If you take that definition then the role of the state needs to be quite entrepreneurial. Harvard Business School defines entrepreneurialism as the pursuit of opportunity without regard to the resources that you currently control. That is how the state and commissioners of public services need to think. They need to think, "What are we trying to achieve? What resources are available, whether or not they are in my control, out in society? How can I put together a package of resources that will enable those services to be delivered?" Whether or not I control those becomes less important if I am thinking more broadly and more entrepreneurially. I think that is what the Big Society means.

Chair: We will come back to the enabling question.

Q157 Paul Flynn: Perhaps I may say what a pleasure it is to meet four zealots for the Big Society. You are an endangered species, and we might not get the opportunity again. Mr Taylor, you have described the situation in Government as Cabinet Ministers laughing behind their hands at the Big Society. If it was toxic, from this morning the toxicity has probably become terminal, with the Archbishop of Canterbury saying that Big Society is viewed as an opportunistic cover for spending cuts. It was launched just under a year ago; it has been re-launched four times. Francis Maude said that he would be prepared to launch it 100 times before Christmas. Do you really believe that you can continue to try to resuscitate a dead parrot?

Matthew Taylor: This is going to be a difficult session if you think the four of us have demonstrated that we are zealots for the Big Society.

Q158 Paul Flynn: Well, you have.

Matthew Taylor: That simply is not what we said. The core insight that for society to flourish we need more capable and responsible citizens seems to me one that will last beyond the Big Society, because it is fundamentally true. If you look at a whole set of social challenges it is impossible to see how they can be met without a more capable and responsible citizenry. So, that is correct. For example, given the kind of brutalism of the Conservative model and ideology of the 1980s, it heartens me when David Cameron stands up in No. 10, as I heard him a few months ago, to say that the reason why people should give more back to society is not simply that society needs it, but that it is the path to living a more fulfilled life. That seems to me to be a big step forward from the kind of homo economicus view of the Thatcher period. I welcome that and think it is an issue that any Government would have to address.

In relation to the Big Society project I think some mistakes have been made. I do not want to go over the same ground, but here are a couple of examples. I have already said that I do not think No. 10 has driven the agenda hard enough and is now beefing itself up. When I worked in No. 10 on public service reform there was a strong sense of having to battle Whitehall departments, which for various reasons did not want to be radical and do things differently, and we were going in to fight. I do not think that No. 10 has been fighting like that, to be frank. It is starting to do so a bit more now, but I do not think it has. I am not sure whether, given its current political difficulties, it will be able to.

I also think that the mistake of the Big Society was that, on the one hand it implied there was nothing going on at the moment, which is nonsense and annoyed people, because obviously there is a huge amount of what the Government term the Big Society already going on, and then made a classic error. They should have learned from Labour in this regard. What you need to do in politics is under-promise and over-deliver. Of course, what happened with the Big Society was the reverse. Ministers talked about the Big Society as if it was something that would be created in the twinkling of an eye. One simply had to withdraw public services and civil society would flourish. The Big Society is a generational project. Had I been in charge of No. 10's communication I would have said, "The Big Society is something we are aiming to achieve over the next 10 to 20 years. Everybody knows there is a lot we have to try to do. The next two or three years as we change the state will be very painful and difficult, and in many ways it will feel like society is getting smaller but this is a transition we have to go through." Unfortunately—politicians always fall into this—they could not avoid the hubris of saying, "We are creating something amazing now that never existed before we got into power." That has been disastrous.

Chair: I must ask you to keep your answers shorter.

Q159 Paul Flynn: Mr Taylor, I know that the last time you appeared before this Committee you wrote an article that was very critical of our questions, so we clearly decided to sharpen up this morning.

Matthew Taylor: I shall do so again.

Q160 Paul Flynn: Mr Davies, do you agree with that answer? Is it you who have fallen out? Is it the Government who have made a hash of this in the way it is communicated?

Gareth Davies: My responsibilities as head of the Office of Civil Society in the Cabinet Office are for its policies on the Big Society, specifically the National Citizen Service, community organisers, the Big Society bank and mutuals among others. I agree with Matthew that this is not going to happen over night; these reforms will take time both in terms of formally putting through the reforms, for example the Localism Bill is still going through Parliament, but also in terms of the culture change that is needed in both Whitehall and in the way policy is made. If you look at what is happening now in Whitehall and compare it with 12 months ago, it is a very different environment. Things have changed in terms of the use of PSA targets, central initiatives and central intervention in the front line, but the world has changed.

Paul Flynn: But have you over-promised and under-delivered? The man who introduced this, Lord Wei, has gone; you are attacked on all sides; you antagonised 84% of charities.

Q161 Chair: Let's put that question to the other two witnesses.

Andrew Haldenby: Perhaps I may answer quickly on the idea that the Big Society is a cover for cuts, which you mentioned in your first question. I think that has also made life very difficult for the Government. David Cameron said just the other day that the Big Society was totally separate from the cuts. There is the deficit reduction over here and the Big Society over here. I do not think that is right, because when you look at what the Big Society is trying to achieve, which is more open and efficient public services and more devolved and accountable local Government that is careful with its money, and more volunteering and social action, all of those things should lead pretty directly towards lower public spending. I think that is one reason why some people have become very distrustful of this idea.

Q162 Paul Flynn: Is it plausible for the Government to say they will give to charities the relatively small amount of £100 million while taking £1.3 billion from them? It is like someone putting a couple of coppers in the collecting tin and stealing your wallet. There is no comparison between the two. How can we possibly say they are separate?

Chair: You have made the point.

Andrew Haldenby: As to charities, I think the trouble the Government have got themselves into is that on public services they should be saying they are in favour of competition and they will look for the best value providers of whatever sector. But they have allowed themselves to give the impression that really what they want are charitable providers in preference to the public and private sectors. That is a wrong position. The trouble is that once the Government are in that position every contract that is lost to a charity looks like a blow against the Big Society, but it should not be; the Big Society should be about the best provision of services, whoever provides them.

Q163 Chair: Mr Brown, do you have anything to add?

Adrian Brown: I do not think it is a cover for cuts and the two are unrelated, but unfortunately they are happening at the same time. It is like organising a garden party and it turns out to be a rainy day. It is unfortunate, but they will have to make the most of it. The cuts make the Big Society agenda a lot more difficult. As to whether they have over-promised and under-delivered, there is some fairness in that. I would say that they vaguely promised, in the sense there are a lot of vague statements about the Big Society, but that makes it very hard to know whether you have delivered, which I think reflects what Matthew said earlier.

Matthew Taylor: I do not think it is a cover for cuts. However, I think it has been injudicious of Ministers to acclaim that if you withdraw the public sector civil society steps into the breach, because there is absolutely no evidence anywhere in the world that public services and civil society are, as it were, a zero sum game.

Q164 Chair: We do accept the reverse, don't we? If the Government take over too much responsibility, it crowds out that civil society.

Matthew Taylor: I think we can absolutely accept that there are good and bad empowering and bureaucratic ways of providing public services, but as to the idea I have heard Ministers sometimes suggest, that simply withdrawing one means the other will flourish, there is no evidence from around the world that it has ever taken place in that way.

Chair: I am not sure whether I have heard Ministers say it in those terms.

Q165 Robert Halfon: I do not think Ministers have. They may have said things privately to you but I do not think that has been the public message. To go back to what you said about the Big Society, you gave a very academic explanation that the ordinary person in the street would not necessarily understand. Surely, a simple way of explaining it is that it is about building social capital, devolving power to people, that people power is as important as state power, if not more important, and boosting, encouraging and liberating social entrepreneurs from regulation and red tape. That is quite a simple way of explaining it. If you look at a lot of the policies that are coming through I accept there are many inconsistencies, but if you consider education and free schools, the thrust of the NHS about GP commissioning, whether or not you agree with it, and the question of electing police commissioners, all those are about social capital, social entrepreneurship and people power. In that sense I question your view that the Big Society has very little impact on Government policy. Despite the very many inconsistencies, there is a general thrust and a lot of stuff is going on that is very much Big Society.

Matthew Taylor: That is a very interesting question. You suggest I am being too academic. I have to say that the concept of social capital is a profoundly academic concept that has been subject to a library of in-depth analysis. None of these concepts is easy.

Q166 Robert Halfon: But if I knocked on someone's door and was asked to explain social capital, it just means building and strengthening community.

Matthew Taylor: But I think what you are doing is reifying means over ends. Why do we want social enterprises, mutuals and social capital? Do we want these things as goods in themselves? We do, but that is not what interests me. What interests me is what I would describe as a social emergency, which is—I am sorry if it is academic but I will make sure I make it as non-academic as I can—that unless we have a citizenry that is more engaged, resourceful and inclined to be pro-social we will not advance as a society. I can explain why that is if you want me to, but there is a whole variety of areas. Let's look for example at social care. We are basically withdrawing support from older, vulnerable people and now providing support only to those with incredibly severe difficulties. I do not think any Government will be able to solve that issue unless they massively increase public spending, and that will not happen under any Government for many years. The answer to this problem has to be that somehow society itself provides that kind of support and steps up to the plate.

Q167 Chair: As indeed it already does in a vast number of cases, because families look after their elderly.

Matthew Taylor: Absolutely, but unfortunately not sufficiently and the level of support varies from place to place. There is a very major problem of isolation among older people. What drives this for me is the notion of how you enable people and create a more capable and responsible citizenry and all the other things, the means. I would judge the Government's reforms on that criterion.

Q168 Chair: On the enabling?

Matthew Taylor: Is this reform likely to create more responsible and capable citizens? When it comes to schools reform, for example, my view is that the priority is how schools engage parents and communities. How do schools become hubs for creating and learning communities? My criticism of the emphasis on free schools and academies—I am not opposed to them; I worked for a Government that introduced academies—is that I do not see the particular connection between free schools and academies, and what seems to me to be the core, which is how schools can engage much more broadly with their communities and act as community assets and hubs for community engagement. I would say exactly the same about the health service reforms. How are these health service reforms going to encourage people to look after their health better and to be more fully engaged in health and social care? I do not see a connection between the forms and the ultimate objective.

Q169 Robert Halfon: I would like to hear Mr Haldenby in a minute. The answer is very simple: the free schools and academies give parents and individuals the power to set up their own schools, so you are devolving power away from Government to individuals, which is a core component of the Big Society.

Matthew Taylor: If you look at academies, do they feel like institutions that are more accountable and responsive? I am afraid that academies bring contestability to the system. They are a good thing if a school is failing to challenge and change, and also tackle local authorities that have not dealt with under performance, but in my experience academies are no more in touch with the community and parents than any other school; in many cases they are less in touch.

Robert Halfon: We can have this argument.

Q170 Chair: I think you will have to agree to disagree. Move on, please.

Andrew Haldenby: May I come back to your thought that there is a coherent Government policy heading in the direction of decentralisation? I do not agree with that. Of course, there is evidence of decentralisation, but also evidence of great centralisation wherever you want to look. To take schools, let's imagine that at the end of this Parliament there are 200 free schools and even 2,000 academies that are free from the national curriculum, which is one of their great freedoms. There will be 19,000 state schools in this country, which are subject to the national curriculum. It is a much tougher national curriculum, which, as far as we can see, is more fiercely imposed. There will still be the national pay arrangements in place for the teaching work force. As we learned on Monday, the Government are now open again to national targets in the NHS. There are still national pay agreements in the NHS. The only public-sector workforce that is likely to be opened up or liberalised is the police force with Tom Winsor's review. It is very difficult to see a convincing case for the Big Society when the picture is very contradictory.

Q171 Robert Halfon: There is an incremental shift away from centralisation although it does not achieve everything you would want ideologically, and it makes it that much easier for the second wave in years to come. The policy is very much about incremental reform, and the incremental shift on some of these things is away from the centre.

Andrew Haldenby: I think that is an interesting idea. It has been said to me, for example, that social enterprises, mutuals, are the thin end of the wedge, which will allow other kinds of providers, particularly private sector ones, to come in later. The other side of it is that there is such a thing as half-way house reform where you introduce a limited micro-reform. It does not turn out to be the thin end of the wedge; opposition amasses around it and it is just squashed. Examples of that would be the assisted places scheme, which was a valuable scheme to open up access to independent schools to a few thousand pupils. That was abolished in 1997. Grant-maintained schools were heavily watered down in 1997. The academies themselves had a lot of their freedoms removed by the previous Government in 2007 and 2008. Therefore, the idea that just a bit of incremental change here is the way to get there in the end is not the history of these reform initiatives.

Q172 Nick de Bois: I have often been on the receiving end of interviews to try to explain or defend the Big Society. I thought I was doing a good job until I listened to all of you. Before I go any further, just to be absolutely secure, recently I had a very nice dinner with Andrew Haldenby and Reform. I would just like that to be on the record. The Big Society has been criticised for being vague, all over the place and almost based on anecdotal evidence to which Mr Taylor himself referred. Does that mean you think it is a failure of presentation more than failure of the idea? To begin with, can I be certain of where you are coming from on that point, Mr Taylor?

Matthew Taylor: For me, it is lack of clarity about the fundamental mechanisms by which we try to diffuse power in society. That is about the mechanisms in Government, but also, as Lord Glasman said to you when he was here, there is a story beyond that about the diffusion of power, for example in relation to markets and corporations. When we look at the question of academies, there is an argument that if you want to diffuse power you need to create alternative power bases to central Government. The Government's localism agenda is very ambivalent about this because, instead of creating a strong local Government that has the power to stand up to central Government, as happens in many European countries, as an alternative democratic power base, they are largely bypassing local Government. In certain areas, to take the Department for Education, they continue to be deeply hostile to local government. If we go back to the issue of centralisation, a few years ago in the local authority model, the local authority, which is democratically accountable, intervened if a school was failing. When we have 2,000 academies and one fails who will intervene? Whitehall will intervene. This is an interesting idea of decentralisation. We now have 2,000 schools, which, if they fail, will require direct intervention from Whitehall rather than their local authority. What is our notion of devolving power? Is it to atomise power and drive it down to neighbourhoods and have different accountability for police and health, with lots and lots of different forms of accountability, or is it an alternative model where we have other strong institutions that can stand up to central Government, which is the more traditional notion of pluralism, for example? This is one of a variety of errors—contracting, which we have heard about, is another one—where it is just not clear what the mechanism is.

Chair: We have got your message: it is not clear. We are going to come to both contracting and devolution. Do you want to follow up on anything?

Q173 Nick de Bois: I am trying to get a slightly fuller answer to my question. To be quite basic about this, is it a failure of idea or presentation? I will ask this question of another witness, but, to expand on my point, some talk about it taking 10 or 15 years. You are trying to achieve almost a cultural change. I would just like to know whether it is a failure of presentation or idea. Mr Haldenby?

Andrew Haldenby: I have to echo something Matthew said earlier. There has been a lot of failure of presentation so far on a couple of things. One is the cuts to which I referred earlier. The separation has not been convincing.

Chair: We have taken that point.

Andrew Haldenby: But the Government have also claimed credit for a lot of things that have already happened and put a Big Society badge on it. For example, about a dozen Big Society awards have been given to organisations, some of which were set up years ago. It is rather implausible. It is as if the Government are saying that they have created the idea of a Big Society and have found something that has nothing to do with it—

Q174 Chair: Perhaps Mr Davies can answer that point.

Gareth Davies: I think this comes back to the earlier question about whether the Big Society is a year zero concept or building on a sense of tradition, culture and history of volunteering and social action? What the Prime Minister is saying is that this is his vision for domestic policy. It touches on pushing down power in different ways, be it to local Government but also individuals in the form of the personal budget or an individual's choice of public services and opening it up. I do not think there is a presumption about one sector being better than another; it is about the appropriateness in that individual area. On the specific point about Big Society awards, all we are trying to do here is give more recognition to the good work that is going on already. It is certainly not trying to take credit as an official but to give credit to the good work that is going on in society today.

Nick de Bois: Perhaps I may move on because I am conscious of the time. Let's talk about opening up the public services and the commissioning aspect.

Chair: Can we come back to that later?

Nick de Bois: I thought that was my next role.

Chair: Perhaps we may go back to enabling.

Q175 Lindsay Roy: The Prime Minister described civil servants as enemies of enterprise. Whether or not you accept that, clearly there is an expectation of some cultural and behavioural change within the Civil Service. What is being done to strengthen that role in terms of empowering and being catalytic within the whole programme? Clearly, if there is no change in the role of the Civil Service we have a real problem.

Gareth Davies: I come back to the point I made earlier about how our role has changed in the last 12 months. If you look back at the differences, we have now abolished the PSA target regime; we no longer have the large numbers or extent of central intervention from Whitehall in frontline public services. For example, DCSF would have had large numbers of teams directly intervening on a day-to-day basis in the activities of schools. There is now a much greater presumption about the competence and abilities of head teachers to run their own schools, for example. The third thing is that we have abolished far more ring-fenced grants and direct central initiatives. That was very much the culture in the last 10 or 20 years.

Q176 Lindsay Roy: You are focusing on roles. I understand devolution. What about the skills and attitudinal change, which I would have thought are fundamental?

Gareth Davies: I wanted to emphasise how the fundamental powers and roles have shifted. You are entirely right that it is a big cultural change. Shifting from that mentality of running targets, interventions and grants is very different from one that is more to do with one-off reforms, commissioning and having strategic management of a wide range of providers in different sectors, and an enabling, corralling and incubating role, which effectively is entrepreneurial. We are at the foothills of that. In previous evidence sessions of this Committee you heard from Gus O'Donnell and Ian Watmore about the needs for a diverse range of skills, one that does not emphasise, if you like, lifelong civil servants but people with greater commercial skills from different backgrounds and a more permeable professional organisation that is smaller but operates much more horizontally, rather than working through the silos of the departments across Whitehall.

Chair: I think this goes to the real crunch of how Whitehall should enable everything that we want.

Q177 Lindsay Roy: So, is there a professional development programme for civil servants?

Gareth Davies: Over the last year a number of things have been started. I am not trying to say this is finished; it is a start.

Q178 Lindsay Roy: Is it systematic?

Gareth Davies: Yes. For example, with Robert Devereux, head of policy development in Whitehall, I have been running a series of sessions with senior civil servants and policy makers about the new way of approaching policy. So, rather than defaulting back to an initiative announced in the Budget, a ring-fenced pot, a target or an NDPB, we are asking first how we can help society solve its own problems and help businesses, communities and families to come together and go with the grain.

Chair: But how much of Whitehall is actually preoccupied with this? How much of Whitehall is just keeping its head down and waiting for this idea to blow over so it can go back to what it was doing before?

Q179 Robert Halfon: Is there a Big Society impact assessment on all Government policies coming through individual departments?

Gareth Davies: I think this comes back to some of the points that Matthew and other people giving evidence here today have made. To what extent is this a stand-alone initiative, or is it something that describes the totality of what the domestic policy reforms are about? We take the coalition document as our guide and the policies are set out there. Our role as civil servants is to implement that coalition document as set out in the business plans. They are monitored by No. 10 and the Treasury, and that is the test about whether these policies are being implemented at the start. There are then further evaluations about their impact on behaviour change, people's perceptions about power, trust, control and knowledge of their community, but ultimately that feeds into what the Prime Minister has talked about on a number of occasions: the idea of well-being, in the sense that we may be richer as a country.

Q180 Chair: We are getting back to the conceptual things; we need to talk about who is doing what. When a civil servant comes into the office at nine o'clock in the morning, what will he do differently that will enable the Big Society?

Andrew Haldenby: On "the enemies of enterprise", I think the Prime Minister can only have meant that, after a period of time in power, he had started a number of things in train that just were not happening.

Paul Flynn: A big number.

Andrew Haldenby: He felt that the Civil Service or Whitehall machine, whatever you want to call it, was not giving him the support. I think the question then is: what have the Government done to make the Whitehall machine more directly accountable to Ministers? I think this Committee has discussed before the initiative, for example, to make departmental boards accountable to secretaries of state and, in the last resort, to allow permanent secretaries to be able to be moved by those boards if Ministers felt they were not getting enough support. That would be an example of the kind of radical reform that would give Ministers the chance to shift the enemies of enterprise, but it would seem to me that that reform has not come to any great fruition so far.

Q181 Robert Halfon: Should there be a Big Society impact assessment on all domestic Government policies coming through Whitehall?

Matthew Taylor: What would you measure?

Q182 Robert Halfon: You have set the definitions of the Big Society.

Matthew Taylor: The Government have abolished two or three of the obvious things. They have abolished two or three measures that would be the obvious thing you would measure if you were trying to work out whether there was a Big Society growing. They have done that for reasons of spending cuts, which is fine, but the kind of granular information about neighbourhoods, for example, that the Government used to collect is no longer being collected. So, I am not sure how you would conduct such an impact assessment either in terms of concept—what it is we are measuring here—or in terms of the actual metrics, which are no longer there.

Q183 Chair: I want to wrap this up. Mr Taylor, you have noted that this means a much changed task for civil servants. We are all agreed that potentially there is a vast untapped resource out there of good will and energy, which the state on its own tends to ignore. How does the Whitehall machine engage this in order to deliver what we all want to see, which is a more motivated citizenry?

Matthew Taylor: I think it means that departments have to have a very clear account of what the Big Society means to them. In a way they do, but the problem is that these accounts do not marry with each other. To take an example, in the police reforms the account seems to be, "We need to challenge professionals," whereas in the health service the account seems to be, "We need to give all the power to professionals." In the schools system it is, "Let's give the power to the parents," but actually it will probably be giving power to head teachers. I think that civil servants are at a loss. They know that the old days have gone, and in some ways they welcome that; they understand the madness of too many targets and interventions, but what they do not understand is the driving logic of what they are trying to do now. They understand what the Minister wants. Also, departments at the moment and for the last year have been driven much more by the Treasury than No. 10. The Treasury does not even bother to use the words "Big Society"; it is utterly dismissive of the idea.

Q184 Chair: Is not the problem that people have become very disillusioned with the long screwdriver management by the Treasury, understandably, but will an attempt to create a different blueprint for all public services—or a pan-governmental business plan—so there is a uniform philosophical approach really work, Mr Haldenby?

Andrew Haldenby: Hold on. You are giving the impression that you want to replace one centralised form of Government with another, but that is not the point. Surely, it is possible to have a coherent view of the reform of public services, for example, that is consistent in its direction. I think the Government's argument has been, as Mr Halfon said, that there is a consistent direction across the piece, but actually there are contradictions. Matthew mentioned a couple of those. I said earlier that I thought the pullback on the NHS reforms had put a big question mark over the whole thing.

Q185 Chair: Is not a fundamental problem with the Big Society that it means different things in different Government departments and policies, which is inevitable, and it is not about a top-down approach? You cannot have a business plan for something that ultimately is not meant to be implemented by Whitehall?

Andrew Haldenby: I do not agree with that.

Q186 Chair: It does need a business plan?

Andrew Haldenby: It needs direction and leadership; it needs a set of policies that are consistent and mutually supportive. If a business plan means a sense of when those policies will be implemented, what they are and when they are coming of course that is possible. The Government have already introduced departmental plans that lay out those milestones. The problem is that they are not consistent. That is why I think the whole thing does not hang together.

Matthew Taylor: Perhaps I may make this very concrete. There is an example of a public service that has gone from one that was simply delivered to one that is now co­produced, but people never recognise which one it is: refuse collection. 20 or 30 years ago we would just stick our rubbish in the bin and the council would deal with it. Now more and more people sort their rubbish into different piles. We probably spend more time managing our own refuse than the council. People are happy with that, basically; they see the reason for it and do it. Young people in particular nag their parents to make sure they recycle. For me, the Big Society should be about how it is that in other public services we reconceptualise them, not as services where we deliver to people but where the value is jointly created by the public sector and citizens individually and collectively. That seems to me to be at the very heart of this concept, but I do not see that notion being applied across Whitehall. I see some departments that may be slightly interested in that but for other departments there does not seem to be an interest in it at all. For example, it does not seem to me that the Department for Education is in the slightest bit interested in parental engagement apart from a handful of free schools, which, as Andrew said, will be at the very margins of the system. Anyway, even with the creation of the free schools, it is not clear that parental involvement continues beyond that. If a school is created, it is then handed over to the head teacher.

Q187 Chair: I think we are on to the nub of something. Before we go on to commissioning, are there any other comments on this particular matter? Mr Brown, you have not said very much.

Adrian Brown: The idea that the Big Society does not need a plan, which was in the air at the beginning of the Big Society last year, and it is just organic and evolutionary—that in fact a plan is counter to the essence of the Big Society—is a mistake. Not to have an idea where you are going and how you will get there with anything will lead to disappointment.

Q188 Chair: Is this what we expect the White Paper on the future of public services to be?

Adrian Brown: I think we all look forward to reading the White Paper when it comes out.

Matthew Taylor: With baited breath.

Adrian Brown: Maybe that will provide a more coherent vision across the piece as to what the Big Society implies. But I think the important point is that there is an enormous diversity of public services, from the management of something like Jobcentre Plus, which is a giant organisation delivering services out there in communities, to something that is a lot more about citizens engaging directly, and perhaps handing over powers to non-state actors. It is a mistake to suggest that everything should be following the same set of rules and there is a simple blueprint that all policymakers across Whitehall can follow. But I do not think anyone believes that that is the case. Where people in Whitehall are struggling, if you went down the corridor and asked the average policy maker, is that they are not quite sure how to interpret that high-level vision that they hear in the speeches into the realities that they are dealing with as policy makers. If they are looking at schools or whatever, what should they do?

Q189 Paul Flynn: This is déjà vu about the last Government. We talked about leaving one sense of madness. We are picking up another range of madness, launching something and a year later deciding to get a plan for it. It sounds awfully like the Third Way. Does anyone believe that that was a great success? Is the Big Society to be buried, forgotten and friendless?

Matthew Taylor: The Third Way was very different from the Big Society.

Q190 Paul Flynn: Was it?

Chair: We do not want to have a debate about the Third Way.

Matthew Taylor: I can deal with it in one sentence. I did know that it was coming up and so I have prepared. The Third Way was an attempt to redefine social democracy and say that it had to respond to major changes in the world, like globalisation, decline of deference and individualism. Therefore, Anthony Giddens and other people believed that fundamentally it was about rethinking social democracy for a modern age. Therefore, it was a very political project. It seems to me that the Big Society is not a way of redefining politics, although some people in the Conservative Party would argue about this; it is trying to get to the heart of a major social problem. I think it is right in its diagnosis. The problem is that its prescription is, as economists would say, not good enough to be wrong.

Q191 Nick de Bois: Turning to commissioning, if we are to open up public services to social enterprises, charities and private companies—I hope—the question must be: is Whitehall ready and skilled enough to be able to do this? There is thinking about whether the Whitehall commissioners are currently prepared and have been empowered to commission services from smaller organisations and charities, which they have not really been dealing with. That is a big change. I would be interested in your views, Mr Davies.

Gareth Davies: I make a couple of points. Certainly, in my time in Whitehall over the last 10 years there has been increased professionalisation of the procurement and commercial functions for commissioning. There has been a big improvement, certainly in professional recognition. If you think about improving the skill sets of the Civil Service, it is important to get the incentives right. Certainly, the quality of people who are being brought in now is a step ahead of where we were a decade ago. That is a start. There certainly needs to be greater awareness of the diverse range of providers on whom you can call. A lot of the EU rules on procurement and the use of framework contracts, PQQs and the like do tend to bias you towards the larger players. This is not a question of preferring one sector over another but ensuring there is a proper level playing field and competitive neutrality. You can look at what DWP has done through implementation of what they call the Merlin standards, which is about how subcontractors are dealt with as part of the work programme, and similarly the Compact, which is about how Government generally relate to the third sector. These are the ways in which we can try to improve awareness and understanding.

Q192 Nick de Bois: To interrupt you on that point, I want to be clear I understand it. Are you saying that what we may end up with are social enterprises or small private companies being second or third tier contractors, and is that necessarily the right thing?

Gareth Davies: If we look at the example of the work programme of my colleagues in DWP, two of the prime contractors are from the VCSE, the voluntary sector. However, 300 organisations are subcontractors. Depending on the different roles and the strength of the balance sheets needed to manage payment-by-results contracts, that is probably appropriate. The key is to make sure that relationships work appropriately. Certainly, in our Green Paper on modernising commissioning we have some feedback on ensuring that the relationships are right, and the ways those are managed are very important.

It is a new set of skills. No one would say—certainly Gus O'Donnell would not—that the skills are there in Whitehall yet. However, there is some very interesting work going on. If we talk about the work I have seen in Blackburn and what Turning Point is doing in relation to local integrated commissioning, that is about community-level commissioning. Rather than it being set up by central Government or even local Government, it is small neighbourhoods saying what services they want. This goes back to Matthew's point about co­production. There is a range of initiatives going on at the moment. Have these matured? No, but it is certainly a start.

Matthew Taylor: May I just say why I think this is difficult? I have spoken to people at No. 10 who recognise this is a very difficult issue. They are looking for new forms of commissioning and to find ways to make it easier for third sector organisations to win out. They are also desperately keen to try to get the whole payment-by-results systems to work, but it turns out this is very, very difficult. Even the one social impact bond that is being created is proving to be incredibly difficult to get off the ground. There is a real appetite in No. 10, but the solutions are quite a long way away.

I give you an example in one sentence of why it is difficult. When we in No. 10 opened up the health service to contestability we knew we had to create surplus capacity, so in a sense we had to waste money. It was quite explicit that we had to create surplus capacity in order to bring contestability into the system. If you want to promote the third sector probably you have to do something similar. The easy way to do it is to say, "We will over-procure in order to give these players, who may be sub­optimal, a way in so they can develop and grow." But there is no extra money for sub­optimality. When you look at the work programme, it is pretty clear that in the end the ones that won the contracts were those that discounted. It was all done on discounting; that was what drove it. Therefore, if you want the third sector to win contracts you have to do something at a system level. Merlin and these other contracts are fine, but either you have to change the rules, which is hard for a variety of reasons, or in some way you have to capture what the third sector brings within the contract. Somehow you have to specify in the contract so that what the third sector has gives it an advantage. Gareth will know that these were very hard to do.

Q193 Nick de Bois: To dig a little deeper, if I was running a charity or a social enterprise with a group of volunteers my chances of winning a bid would be pretty slim because my balance sheet would be rubbish and I would probably have no working capital. If it is payments by results it will come rather late in the day. Do you agree with that view, Mr Brown? I will come back to you, Mr Davies. Are you anticipating that problem? Have you got any plans to say anything about that?

Adrian Brown: I think that is a struggle for small organisations, whether or not they are social enterprises. The Big Society bank, which I am sure Gareth will talk about, is designed to start addressing that particular problem.

Q194 Nick de Bois: On commercial terms we anticipate, don't we?

Adrian Brown: On commercial terms, but with an emphasis on delivering to organisations that perhaps would not find that financing from regular sources. To go back to your question, you referred to Whitehall commissioners. Within the context of this conversation, obviously there are lots of places where commissioning or commissioning-like activity is happening not in Whitehall, and presumably the Big Society would encourage this. It is happening at a local level, or individuals are commissioning their own services. There is a lot of interesting potential in those kinds of new mechanisms for commissioning, which are more likely to mean the kinds of organisations that you are talking about being involved in public service delivery.

Gareth Davies: I make three quick points. First, it is important to get the specification right at the start. Bad procurement and commissioning is when you look just for the cheapest option. Some of the work we are now doing across Whitehall is to ensure we can improve the quality of commissioning and get the service specification right. It is not just about the individual service but the wider benefits it brings. Secondly, there will be different ways of contracting with different organisations. Some smaller organisations will be subcontracting. The key is to make sure those rules are right and the procurement is effective. If you look at what Cruise are doing in North West Wales, that is quite small scale in terms of that branch but they will then partner with others who can have the balance sheet risk.

Thirdly, in terms of trying to broaden access to social finance some of the ideas around social impact bonds are incredibly innovative, but there is a real potential to change the way in which smaller charities can access finance. The Big Society bank will play a critical role in this. There will be different ways in which it will provide capital. Sometimes it will be long-term working capital, equity investments and different types of debt structures. It would be for Ronnie Cohen to work his way through that in terms of the details. We will be coming forward with that over the coming months. But that will give opportunities for different finance that may not be available from the more standard commercial lenders.

Q195 Nick de Bois: Is there any evidence to suggest that it is not working at the moment?

Gareth Davies: It is a mixed picture. If you look at some of the success, for example the DWP work programme, 300 voluntary groups have won parts of subcontracting work. We are looking at getting about £600 million into the sector through those contracts that were competitively tendered. But in our feedback from the commissioning Green Paper there is some concern about how those roles work out in practice to make sure those relationships operate. It is certainly something about which I am concerned. I am working with colleagues in commissioning and procurement in Cabinet Office to think through how this works in practice. There was an event on 11 February where the Prime Minister and Minister for the Cabinet Office went through some of the reforms to help expand commissioning opportunities for those small businesses and the voluntary sector and the reform of procurement rules. We are looking to abolish the PQQ, pre-qualification phase, for some of the smallest contracts, frankly to take some of the bureaucracy out of it, and look at ways in which we can parcel up those contracts.

Q196 Nick de Bois: I am all for taking bureaucracy out of it. Mr Haldenby, would it worry you if social enterprises were given a competitive advantage over, say, private sector companies in view of the fact that financially they might be lacking in assets but might have some intangible assets that were considered to be of greater value?

Andrew Haldenby: I think the Government have to decide on the purpose of commissioning. Is it to get the best services delivered for the best value or to build a certain network of suppliers in a way that is very neatly specified from the centre?

Q197 Chair: Can you separate those two?

Andrew Haldenby: Yes. Not so long ago there was the leak of a memo of a meeting between Francis Maude and the CBI. Francis Maude said that, although the Government spoke about open competition in public services, in practice they were not in favour of outsourcing services to the traditional big outsourcing companies; they wanted new ideas—mutuals, social enterprises and so on.

Q198 Chair: That is because the present delivery model is very blunt and quite difficult. We have seen this in other areas where very large contracting organisations form an oligopoly that does not provide enough competition or innovation.

Andrew Haldenby: But in some cases those organisations deliver outstanding performance. Last year the Guardian's public servant of the year was the governor of Doncaster prison, which happens to be run by Serco. I have no brief for Serco, but that is just a fact. It is true that all markets could be competitive, but I think the outsourcing market is competitive. I would challenge the idea that it is completely oligopolistic.

Q199 Chair: Mr de Bois, I am sorry to interrupt your line of questions. Referring to the whole question of profit and not for profit, we know that polling shows that not for profit is nice and if people make profit out of things they are not nice, but is it a mistake to get into a rather poll-driven delivery model and be over-obsessed with not-for-profit organisations? I see Mr Taylor nodding, which is very encouraging.

Matthew Taylor: Yes, because I think it goes back to what I have been trying to say throughout, which is: what is the objective you are trying to achieve here? If, as I have been asserting throughout, the objective is about encouraging people to be more responsible and capable, there is no intrinsic reason why the third sector is better at that than the private sector or public sector, or that local Government is better than central Government. It depends upon the model of delivery and your objectives.

I am quite sceptical about the idea that ownership in itself matters. Would you rather your car was repaired by four blokes, one of whom owns the garage and the other three work for him but they like cars, or by a mutual of four people none of whom is interested in cars and will rip you off? Would you say, "It does not matter if my car does not work because at least it was done by a mutual"? What matters is the way you specify what you are trying to achieve and the delivery mechanism.

Of course, because third sector organisations are not ultimately driven by profit they have greater scope for engagement and a more open-ended relationship with people, so there are reasons to believe but it needs to be looked at on a case-by-case basis. As we saw from building societies a few years ago, the fact that you have a particular structure does not necessarily mean anything about the way power is distributed in that organisation.

Andrew Haldenby: On the mutuals and social enterprises side, we should not let this
Government get away with the idea that this is a new idea that will potentially be transformative. We have been here before. In the first term of the previous Government there was a whole host of discussion about new organisational forms and community interest companies. Indeed, units were set up in the Cabinet Office to advance this idea. Transformation did not happen. I just want to give a sense of the history and suggest that specifying those particular delivery models does seem to be a genuinely odd option.

Chair: We will come to more mutuals in a minute.

Q200 Robert Halfon: Going back to contracting charities regarding the Big Society, how do you stop the whole thing being hijacked by the big ones, like the Tesco charities, which are inevitably much better at lobbying for funds from the Big Society bank? A little charity in my constituency will have little idea about approaching the Big Society bank. Is not one possible great flaw in all this that it will be just the big charities that benefit from the Big Society largesse?

Adrian Brown: My understanding is that the Big Society bank will not lend directly to charities but to intermediaries who will then work with charities. My understanding of what the Big Society bank is trying to achieve is that it will have a whole range of intermediaries who can work with larger charities but also smaller ones.

Chair: We all know that contracting with central Government, or indeed local Government, is notorious.


 
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