To be published as HC [902-vi ]

House of COMMONS



Public Administration Committee

Smaller Government: Bigger Society?

WEDNESDAY 12 October 2011

Rt Hon Francis Maude MP, Nick Hurd MP and Rt Hon Greg Clark MP

Evidence heard in Public Questions [522-646]



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Oral Evidence

Taken before the Public Administration Committee

on Wednesday 12 October 2011

Members present:

Mr Bernard Jenkin (Chair)

Alun Cairns

Charlie Elphicke

Paul Flynn

Robert Halfon

Kelvin Hopkins

Greg Mulholland

Lindsay Roy


Examination of Witnesses

Witnesses: Rt Hon Francis Maude MP, Minister for the Cabinet Office, Nick Hurd MP, Minister for Civil Society, Cabinet Office, and Rt Hon Greg Clark MP, Minister for Decentralisation and Cities, Department for Communities and Local Government, gave evidence.

Q522 Chair : I welcome our three witnesses to this session of our inquiry into the Big Society. Could I ask each of you to identify yourselves for the record?

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

Greg Clark: I am Greg Clark, Minister for Decentralisation.

Nick Hurd: I am Nick Hurd, Minister for Civil Society.

Q523 Chair : Thank you for joining us today. I would like to say that personally I am a great fan of the principle of the Big Society, which is the banner under which the Government is advancing a range of policies. We would also like to ask a few questions about our recently published report on the Government’s change programme, and maybe invite one or two comments on the announcement yesterday about the splitting of the role of the head of the Home Civil Service and the Cabinet Secretary. Minister, would you like to make a few comments to begin with?

Francis Maude: If I may, Chairman, I would just like to make a few brief comments, mainly on the question people often ask: what do you mean by "the Big Society"? I am always slightly puzzled by the question because it seems reasonably obvious to me. People broadly know what society is; society is what people do together, in association with each other. That is the root of the word and most of what we do in our lives is not done solo but with other people, whether that is family, friends, work, sports, pastimes or whatever-most of what we do is done with other people. A bigger society is one where more people do more things together in their communities, with each other and for each other. It always seems to me that actually, when you put it in those simple terms, people are not mystified by the concept.

I was quoted the other day as saying the Big Society is not a Government programme. That translated into a headline on the interview saying, "Francis Maude: Big Society? It’s nothing to do with us", which was about as misleading as it could be. What I was saying was that the Big Society, by definition, is mostly not about what Government does; it is about what people, organisations and communities do in society.

What we have always said is that the Government’s contribution to creating a bigger, stronger society falls into three strands. The first is decentralisation, pushing power and control away from the centre and into communities and neighbourhoods. Greg has responsibility in CLG for that strand of activity, but it appears not just in the work that CLG do in relation to local government but in school reforms, health reforms and across a whole spread of Government. These three elements overlap; it is a sort of Venn diagram with quite a lot of overlap between them. The second strand is the arena of public service reform and opening up public services. That means enabling people and communities to exercise more choice and control over public services, enabling a much wider diversity and plurality of providers of public services, and moving away from the big, old-fashioned monopolies of providers of public services. That second strand is one for which the whole of Government has responsibility in different ways. The third strand is around social action, which is what most people think of when we talk about the Big Society. That is supporting voluntary and community organisations and helping to build civil society organisations. Nick has primary responsibility for that strand.

I just wanted to say that by way of opening. Obviously there is a huge amount that Government has to do to promote the enlargement of society, but it is mostly not about what Government does but about what people, organisations and communities do.

Q524 Chair : This is the conundrum, and it is our problem in grappling with this subject as a Select Committee, because we are concerned about what Government actually does, how it does it and whether it is going to succeed in what it does. There is a strong philosophical strand to the policy, which is quite difficult to translate in terms of what Government does. Would you accept that?

Francis Maude: Yes I totally agree, but the philosophical strand and the thinking is about lessening the topdown controlling ideology of statism and instead growing what society does.

Q525 Chair : Is this why the Open Public Services White Paper was so delayed, because it is so difficult to translate this into practical action?

Francis Maude: There is a lot of serious work being done and it took some time to work it through. It is a work in progress.

Q526 Chair : I would agree with that, because looking through this document I have lost count of the times it says it is going to consult on things you have not decided on. It says "we will explore", "we will consult", "we will establish", "we will examine", "we are consulting", and "we will consult". It goes on and on. There is certainly not much settled policy in here on detail.

Francis Maude: I seem to remember that when your august Committee produced a report on the public bodies reform programme your criticism was that we were doing too much too quickly and were not consulting enough. It is very hard to get this balance right; we want to move on and make progress. In relation to schools reform, it would be fair to say that Michael Gove has driven reform through in practice very radically and very quickly. More schools are becoming academies and there are more free schools coming into existence; this is a very fast driven programme. In other areas there is a lesser degree of consensus around the programme and it takes more time to build support. We have seen this in relation to health service reform, where we as a Government saw a need to draw back.

Q527 Chair : As soon as we get into individual policies we can begin to measure progress against objectives, but how do you measure your progress overall in the Big Society policy? You yourself said there is not a particularly sharp set of metrics to measure whether public services reform and localism are happening. How are you going to communicate the progress you are making overall in this subject? Is it not actually about the detail of individual policies and individual Departments?

Francis Maude: Yes, a lot of it is.

Chair : A lot of it is? All of it is.

Francis Maude: Nick can talk about some of the progress on specific programmes to support civil society organisations. Greg can talk about progress on the various aspects of localism and decentralisation. But having a neat set of metrics on how big society is becoming is not that easy to do. You can illustrate it with anecdotes more easily than by rigid measurements.

Q528 Chair : We were very disappointed with the Open Public Services White Paper because we were assured by Ian Watmore that it would contain "aspects of Civil Service reform". There really is only the most minimal recognition. Our conclusion is that it does not contain that detail and that "its commitment to consult on the future shape of the policy, funding and regulatory functions in Whitehall suggests a lack of urgency in Government which is without a coherent agenda or set of steps that would constitute a comprehensive plan. In short, the Government has not got a change programme. Ministers just want change to happen: but without a plan, change will be defeated by inertia." That was designed to be helpful, by the way, to encourage you to seize the initiative.

Francis Maude: I fully appreciate the helpful intention behind those sentiments. I can talk specifically about civil service reform if you like. In a speech at Civil Service Live in July I set out an outline of what the civil service in the future needs to look like; it was not absolutely comprehensive and it dealt more with the cultural issues. The point you are referring to, and which you have drawn out very well in your report, is that we are moving into a world of public services where the expectation is not that big, monolithic public sector providers are the default setting for public service provision; we are moving into a world of diversity and pluralism. People, not just in the civil service but in the wider public sector, need to become commissioners and contract managers rather than line managers; it is a different set of skills and we are not yet at all good at this.

Q529 Chair : Where is the White Paper that sets out where we are with the civil service today, what the civil service should look like in three years’ time, what the sets of skills required in the civil service as a whole are, and how we are going to get there? It is that kind of planning that we think is lacking and in fact threatens the entire viability of the Government’s public service reform programme.

Francis Maude: A lot of the delivery of public service reform does not lie with the civil service. The civil service represents around 10% of the public sector work force. Most of what happens in public services is beyond the civil service; it is in local government, the NHS, in schools and in a whole range of activities that are not the civil service.

Q530 Chair : But the civil service is the only instrument at the disposal of Ministers to effect change. Apart from you lifting the phone yourself to a local authority, a charity or a private sector provider, you have to rely on the civil service. We do not think the civil service is yet geared to the scale of change, along with the downsizing and all the other challenges it faces, to deliver what you want it to deliver.

Francis Maude: Nor will it suddenly be. I could publish a lovely White Paper.

Chair : Please do.

Francis Maude: I know you like to have White Papers, and I am not averse to publishing White Papers, but I am keener on doing things. We have, for example, a piece of work going ahead rather rapidly on terms and conditions in the civil service, which are antiquated in many cases.

Q531 Chair : There is a danger that you are going to be "doing stuff", as you put it in our previous evidence inquiry: beating up photocopier salesmen and mobile phone companies and doing detailed things about civil service pensions, but the strategic capabilities the civil service needs are being neglected because nobody is concentrating on that. Who is concentrating on that? You are the Minister for the civil service, I believe.

Francis Maude: Indeed. The responsibility for ensuring the right capabilities exist in the civil service lies principally with the head of the civil service. As you pointed out earlier there is a change in the offing on that front. Gus O’Donnell would say very clearly that we do not yet have the capabilities that a modern civil service needs for the future. That is not to say the civil service is inadequate; it is full of very talented, dedicated, hard-working public servants who are very rarely commended for what they do. Is it perfect? Not by a long way. Is there scope for reform? Is the culture still wrong, despite having been frequently commented on? Yes. I am not sure that producing a White Paper is going to suddenly bring a rapid injection of additional strategic capability into the people in the civil service. It is a lot more complicated than that.

Q532 Chair : I want to bring in other colleagues in just a minute, but I would just say that this is like trying to run a business without a business plan. We are very encouraged by the announcement yesterday that the role of the Cabinet Secretary and the head of the home civil service is going to be split, which we feel reflects one of our concerns, but the advice we have had from a very eminent academic at Cranfield University, who has explored and studied corporate change programmes in the public and private sectors throughout the world, is that leadership is the essential component. At the moment that leadership of change seems to be lacking, and we think that means your public service reform programme will fail because there is not sufficient leadership. There is a lack of consistency across Government Departments, as was evidenced in our end of term report where we looked at the different plans of each Government Department and had them independently assessed by Professor Kakabadse. Surely this is the role of the Cabinet Office? You should be running the headquarters of the Government and ensuring there is consistency and that lessons are learnt between Departments, with better cross-Departmental co-ordination of the Government’s change programme. Maybe the splitting of the role of the head of the home civil service and the Cabinet Secretary is a step in the right direction, but I cannot see how you can do it without some document that provides guidance and leadership across Government.

Francis Maude: I take a rather less gloomy view of the prospect of success for the Government’s public service reform programme. If I may say, you are untypically defeatist on that score, and I do not think producing a document will magically cure it. I have less faith than you do in the transformative power of White Papers.

Q533 Chair : Then why did you bother producing an Open Public Services White Paper?

Francis Maude: There is quite a gap between thinking it is the answer to every problem and thinking it is no use at all. It is important to set out what you are going to do and we have done it. Now we are starting to put into effect, across Government, what we said we are going to do. I was going to say that your point about consistency between Government Departments is a counsel of perfection, but actually it is not: Government is not a single entity. There are 17 principal Government Departments, which are separate entities, headed by Secretaries of State, who collectively form the Cabinet. They do not report to me and nor would they wish to. They run their own Departments, so of course there is going to be inconsistency across the piece.

Q534 Chair : I do not think we want them to report to you, but it is about the function that the Cabinet Office has on behalf of the Prime Minister.

Francis Maude: I do not think I can leave that hanging in the air. What you said was that driving a change programme requires leadership, which I entirely agree with. You then seemed to suggest that it is the Cabinet Office’s job to provide that leadership. We cannot provide leadership to Government Departments that do not report to us; it is for Secretaries of State themselves to provide the leadership, which they do, in their own Departments. We can set out a strategic direction to be implemented in that Department. There are some things to do with practice that need to be more consistent. Theoretically, the senior civil service is managed centrally as a single resource, whereas in effect it is not-it is very siloed.

Q535 Chair : That is one of our concerns.

Francis Maude: It is a completely correct concern and it is one of my concerns as well. We are addressing it. It is not going to happen overnight but we are addressing it. The second thing we can do, and I put this in train the best part of a year ago, is ensure that fast-stream graduate entry into the civil service is managed as a single resource. Graduate entry into most professional services-type organisations is managed rather proactively as a single resource. People are moved around different areas in their first two years to gain knowledge of different parts of the organisation and to build different skills. As things work at the moment a graduate entrant goes into a home Department, and for the most part they remain there for the rest of their careers. We lack that sense of a single ethos across the civil service, and my issuing a White Paper is not going to recreate it. My putting in place the central management of the fast-stream entry and making a reality of the central management of the senior civil service will start to make a difference, but it will take a long time for it to have full effect.

Q536 Chair : My last question on this before bringing my colleagues in is: can you describe exactly what changes the announcement yesterday will make in terms of the leadership of change in Whitehall? Will the new head of the home civil service actually be in the Cabinet Office, which would seem to be the sensible place for him or her to be?

Francis Maude: Not necessarily. The intention is that an existing permanent secretary should take on the role of leadership of the civil service, but reporting to me and the Prime Minister in that role. Jeremy Heywood is the new Cabinet Secretary, which is slightly a reversion to an older pattern where the role of the Cabinet Secretary and the head of the home civil service is separated. Ian Watmore will take on the role of permanent secretary at the Cabinet Office, which is not a role that has existed previously. Co-ordination and support for the Prime Minister, Deputy Prime Minister and the Cabinet, will sit with Jeremy Heywood. The management of the Cabinet Office will sit with Ian Watmore. The leadership of the civil service and the driving through of the civil service reform programme will sit with the new head of the civil service, who will report to me.

Chair : Thank you for all that. I think it is a very exciting juncture, and we will be looking further at the role of the head of the home civil service in a future inquiry.

Q537 Lindsay Roy: Good morning Minister.

Francis Maude: Good morning.

Lindsay Roy: Without a White Paper, a business plan or a set of criteria that formulates an action plan, how are you going to bring about this transformational change? I accept that you have done a tremendous amount of work on the fast stream but there are many civil servants already in post, so how does that transformational change and that change in culture occur?

Francis Maude: That is a really good question and it is really difficult to answer at the moment.

Q538 Lindsay Roy: That is why I asked it.

Francis Maude: Exactly. I do not claim that I have all the answers to that. It is the most difficult thing there is. If you talk to anyone who has run a change programme in any substantial organisation they will say it is the most difficult thing you do and you need to be relentlessly on the case. We are talking about driving change through 17 different organisations with dispersed leadership and a multiplicity of different agencies and arm’s length bodies.

Q539 Chair : You are talking our language.

Francis Maude: It is really difficult, and what Whitehall is good at is producing White Papers-there is no shortage of skill in that. Just to make the point, we could produce a really lovely White Paper.

Q540 Chair : Just produce something on two sides of A4 and see what it looks like.

Francis Maude: I have done that. I commend my speech at Civil Service Live.

Q541 Lindsay Roy: An action plan that is not convergent but divergent in terms of breaking the silo mentality would be a major step forward.

Francis Maude: I agree.

Q542 Lindsay Roy: Can we expect something of that nature soon?

Francis Maude: Not tomorrow.

Q543 Chair : When?

Francis Maude: This is a work in progress. The easy thing for me to say is that we will produce a White Paper in January, and I could produce one, but it would not be founded in an actionable set of clear objectives. A lot of this is cultural. In my speech in July I talked, probably at tedious length, about the need for a different culture. My phrase is: pacier, less paper driven, less imprisoned by process, more innovative, more entrepreneurial and less risk averse. People have been talking about this kind of stuff for ages.

Q544 Chair : Why is it different this time?

Francis Maude: It may not be.

Q545 Chair : That is our concern.

Francis Maude: How do you translate that into behaviour? My view tends to be that you do not change the culture by trying to change the culture; you change the culture by changing behaviours. You need to have different incentives. I have made this point before and I will make it again: no one in the civil service has ever had their career suffer through presiding over an existing, inefficient status quo. However, if you try something new that might break out of that and it fails, as many things will, your career will suffer. So moving to a culture where the way your performance is appraised, where you actually get positive ticks for trying new things even if they do not work rather than it being a black mark, is a big cultural change. Getting that embedded into the performance appraisal system is something we are doing.

Chair : That sounds like a good few paragraphs in your White Paper.

Francis Maude: Absolutely.

Q546 Lindsay Roy: Is that not why an action plan is not only fundamental but urgent?

Francis Maude: I would say that what is urgent is the action, not the plan.

Q547 Chair : You have a civil service reform programme but without a published programme. It is extraordinary.

Francis Maude: I do not think it is. What would be extraordinary would be if I was producing a plan but no action. What you are complaining about is action but no plan. There is a plan and there is a very clear direction of travel. It is very complicated and there are a whole lot of different angles that are not all interdependent. The key thing is to get on with it.

Q548 Lindsay Roy: Does it focus on behaviour?

Francis Maude: If you go downstairs to the Library you will see that it is full of White Papers about civil service reform.

Chair : Okay we get the message.

Q549 Paul Flynn: Would you agree that the abiding philosophy of the civil service is the unimportance of being right? Those who follow the Government line have their careers prosper, but for those who challenge the Government line, even though they might be correct, their careers wither.

Francis Maude: The way I would prefer to put it is that the way of operating in the civil service is too imprisoned by process.

Q550 Paul Flynn: That is a rather boring way to put it.

Francis Maude: It is much more boring. Yours is much more exciting and much better designed to catch the headlines.

Q551 Robert Halfon: I am a passionate supporter of the Big Society, and I do believe that across the country the language has become more common and people are using the language. Nevertheless a huge amount of confusion still remains as to what it means. There is a criticism that not enough has been done on the philosophical side, as the Chairman mentioned earlier. There has been criticism that different people are giving out different messages. Whenever they appear on television, different Ministers give different messages as to what it means. Also, there are criticisms that there are too many people involved. There are the three of you, there are two Big Society ambassadors and there is the chap in the House of Lords who does it part-time. Really what there should be is a Big Society Ministry and a Big Society Minister who is of Cabinet Office level and able to cut across, co-ordinate and properly express what the philosophy of the Big Society is. What is your view on that?

Francis Maude: I respectfully disagree. I think that would make it much too narrow. This is a theme and approach that applies right across what the Government does. It does get expressed in different ways and to be honest I am completely relaxed about that. It means different things for different people, and different things will have salience. The work that Greg does on decentralisation and localism is a core part of it. The work that Nick leads on social action is a core part of it. When Nick and Greg talk about it they will talk a different language. When Michael Gove talks about it, or Nick Clegg-who will be talking primarily about social mobility and so on-it will all be part of the same overarching approach. As I said in that interview, it is not a Government programme where you have a Minister responsible for creating the Big Society.

Q552 Robert Halfon: Phillip Blond, one of the original architects, suggested in the New Statesman a few weeks ago that the Big Society had lost its way and the Government are losing a great opportunity to get it embedded in the national consciousness, partly because of the economic situation and partly because of the language and confusion about what it means. You obviously disagree with that.

Francis Maude: I do not think it means a single thing. I might get Greg and Nick to talk about this, and they will, I guarantee, use different language to talk about it, which is absolutely fine.

Nick Hurd: The one thing we have done is embed it into the national consciousness because there has been a massive debate over the last year about Big Society and what it means. I totally agree with Francis; I believe that fundamentally people really understand what we are trying to talk about, which is getting more people engaged and involved in their communities and working together. I think people fundamentally understand it. There is a lot of cynicism about it, and the environment in which it is being done is difficult, but I think people fundamentally understand it. I think that national consciousness is one thing we have achieved.

Robert Halfon: They think it is just about voluntarism. To me it is about building social capital, people power and helping social entrepreneurs, which is the social action side of it. People understand the voluntary stuff, but they are not clear about the first two elements.

Q553 Chair : Mr Clark, is it like The Hunting of the Snark?

Greg Clark: I was going to link it back to what Francis said about action. Mr Cairns served on the Bill Committee for the Localism Bill, which was an early Bill in the Government’s legislative programme that introduced major reforms in this direction. It is not simply talking about it but doing it, so that local authorities for the first time have a general power of competence so that they can initiate action. They do not just have to do what central Government tells them to do but can make decisions in the interest of their own communities. If you look at some of the rights, they include the right for voluntary organisations to challenge the way things are done and the right to bid to take over assets. These are practical measures that have been the subject of great debate and in many cases have formed significant consensus in this House and the other place. So at the same time as the debate on terms has been taking place, there has been substantial progress quite early in the day.

Q554 Alun Cairns : The head of the Office for Civil Society told us in June that there were three basic platforms for delivering the Big Society: oneoff legislative changes, opening up public services, and increasing social action. Do you accept that there is a fourth, which goes back to the initial conversation and debate you had, Mr Maude, with the Chairman, in relation to the need for a cultural change in the civil service to deliver the Big Society?

Francis Maude: Frankly whether it is about the Big Society or not, there is a need for culture change in the civil service and different capabilities across the public sector, which is about moving from being bureaucratic hierarchical line managers to being commissioners and contract managers; it is a different set of skills. We do not have enough of that in any part of the public sector actually, so I agree with that, but I would say that is an underlying condition rather than a specific programme. It is crucial.

Q555 Alun Cairns : Sticking to the three platforms that were suggested by Mr Davies in June, what assessment would you make of the progress in those three areas?

Francis Maude: I will get Greg to talk about progress on localism and decentralisation, and Nick to talk about the social action strand. I will wrap up on the public services strand.

Greg Clark: On localism, I already made the point that we have before the House of Lords a substantial Bill that has taken action on a very broad range of fronts. It covers everything from the power of local councils to the power of local community groups. One of the other things we have done that was not in the Bill is to remove the ring-fencing of local authority expenditure, which is something they suggested was too centralised in the past and have campaigned about for some years. I think there has been a great deal of action on that front.

Nick Hurd: On the social action front, again there has been a huge amount of activity. There are various strands. We are encouraging more giving; we are a relatively generous country but we think we can do more, so there has been a Green Paper, a White Paper and some generous new incentives within a tough budget to encourage giving. There is a £30 million infrastructure fund to improve the efficiency of some of the infrastructure out there to support volunteering. Lord Hodgson has produced an excellent report aimed at trying to address some of the regulation, red tape and bureaucracy that gets in the way of people stepping forward and get involved-Unshackling Good Neighbours. We have had a very successful pilot of the National Citizen Service this summer, which just over 8,000 young people have gone through, and we are absolutely thrilled with that. We are starting our Community Organisers programme. Communities First and Neighbourhood Challenge funds have been opened for business recently. There has been a huge amount of activity, all designed to try to make it easier and more compelling for people to step up and get involved in social action.

Q556 Alun Cairns : How do you plan to measure the success of the policy there? What metrics will you use to judge whether social actions increase as a result of Government change?

Nick Hurd: Each of the individual programmes will have its own specific objective and measures of success attached. For the Community Organisers and Communities First programme, which we run effectively as an integrated programme as it is all about encouraging people to show leadership and take action in their communities, we are looking for evidence of projects where communities have come together to take action to take an initiative. We are looking for evidence of new associations and the formation of new neighbourhood groups. That is just one example.

Q557 Alun Cairns : Will you be able to assess whether there is just displacement: people doing the things supported by the Government from direct policy and shifting from other areas that may not have had Government support?

Nick Hurd: In that particular programme we are looking for evidence of new association and new activity that taxpayer money has been a catalyst for, because we are responsible for that. At this stage the National Citizen Service has a different set of criteria; we are interested in how many people get involved, the quality of their experience and we have also commissioned a long-term study tracking young people who go through the National Citizen Service and their behaviour afterwards, to try to monitor the impact of the programme on their behaviour.

Francis Maude: Things like the number of neighbourhood groups and their vigour is of course of crucial importance for what Greg is doing. In terms of the planning reforms, having vigorous and demanding local neighbourhood groups who are able to demand or assert what they want for their neighbourhood is absolutely crucial. These things are absolutely interlinked. You ask to what extent it is displacement. A lot of what goes on and a lot of the social capital that exists is not visible and not measurable. Officialdom will therefore not know that it exists as these may be people doing things in a wholly informal way in their communities. There may be people who are actually community leaders who have no idea that they are community leaders. There are people who are social entrepreneurs who have no idea that they are social entrepreneurs but they have seen something that needs doing, mobilised some people and got something started. The effect of this, we hope, will be that some of that activity is supported in a way it is not currently, because no one knows it is there to support. It may be that collective activity happens in communities as a result of what we are doing, and as a result of what we are saying.

Q558 Paul Flynn: The Government’s planning reforms, which one could regard as imposing views from the centre, faced objections from the National Trust and the Tory grassroots. You said you had no sympathy for their position and you described their views as "bollocks". Is this an example of your devotion to decentralisation and localism?

Francis Maude: I will use Ken Clarke’s phrase and say, "I do rather regret the colourful language I used."

Q559 Paul Flynn: It is not my phrase.

Francis Maude: No, indeed. It was definitely my phrase, and, as I say, it was colourful and I regret it. Just to be absolutely clear: the contention to which I applied it was that creating a presumption in favour of sustainable development was somehow creating a free for all. Greg can talk much more authoritatively about this than I can, but since the Town and Country Planning Act 1947 there has been a presumption in favour of development. Substituting a presumption in favour of sustainable development limits, if anything, the propensity for development; it does not enlarge it. That was the narrow point to which I was applying that phrase.

Q560 Paul Flynn: I do not think you should apologise for the phrase; it is a phrase that has come to my mind several times during the last half hour.

Francis Maude: Do not feel at all inhibited.

Q561 Paul Flynn: Just look at the evidence we have had of how consistently this has been applied. Matthew Taylor has examined the police reforms and said that the Government’s attitude is it needs to challenge the professionals, whereas in the health service the attitude is it needs to support the professionals. There seems to be inconsistency in that view. Others have made similar points about the topdown announcements that have been made compared with the alleged support for localism. Is it not a mess?

Francis Maude: No, it is not a mess. It is untidy because life is untidy, and the pattern of provision will continue to be untidy. With the police, we are not going to allow communities to choose which police officers they get arrested by. There will be a single police force whose writ runs in an area, so you cannot have choice. What you can have is more democratic control by communities over the way policing is done, and that is why the role there is to challenge the professionals by allowing communities to elect a police and crime commissioner who is the people’s representative in relation to policing.

In relation to the health service there is choice, because I can choose which GP I use, and my GP and I can choose which consultant we go to, empowering the professionals there to act on our behalf. Those professionals are directly accountable to the patient. So what you are doing in both cases is removing the topdown central Government control. That is the consistency in it. You are taking the power away from politicians to set random, politically motivated targets, and creating accountability direct to communities, in the case of police, and, in the case of the NHS, to the patients. But this is Greg’s territory.

Greg Clark: In the Localism Bill there is a lot of transfer of power from central Government to local government. But it was always key that you should also empower communities below the local authority level, and there was shared belief that it was desirable. For example there are community groups who want to engage in neighbourhood planning and it is right to give them the chance to go into greater detail. If you have community groups that can deliver services, they have a right to be heard. There will be different levels of decentralisation, not just between layers of Government.

Q562 Paul Flynn: Between the dream and the reality falls the shadow. We get the rhetoric; we have had it consistently from all Governments, but the reality I am afraid does not reflect it.

Francis Maude: You say that really dismissively.

Q563 Paul Flynn: It is true; you said it.

Francis Maude: What have we said that is inconsistent? Of course there is a different mechanic being created because these are different services run in different ways.

Q564 Paul Flynn: I would be very happy to give evidence to the Committee, but you are the witness. You do not ask me questions; I ask you questions, if I get the chance.

Francis Maude: You were not asking a question; you were making an assertion, which was actually incorrect and irresponsible.

Q565 Paul Flynn: I came in as an agnostic on this. The Big Society was the holy grail; it was the great crusade of the Prime Minister. We have had great crusades from Prime Ministers over many years and there is a whole junk yard somewhere where the remains of the Third Way, the Cones Hotline, and the Back to Basics lie buried. The Big Society is already being consigned there.

Francis Maude: In your mind.

Q566 Paul Flynn: We should now have a stampede of zealots rushing up to the sunlit uplands doing more things as part of the Big Society. There is a stampede but it is a stampede away from the idea of the Big Society. What happened to Lord Wei? He was the guru, the man who was going to lead it, and he fled from the scene. He has not been replaced and his job has gone. We are unfortunately disappointed to see that Mr Pickles is not here this morning.

Francis Maude: Well, you did not invite him; that is the reason for that.

Q567 Paul Flynn: We hear the laughter behind the hands of Ministers who do not want anything to do with it. At your party conference, where were the zealots coming up to the platform to pronounce the joys of the Big Society? There was hardly a mention of it-just one fleeting mention of the Big Society. David Cameron did appeal to MPs to give part of their income to charity. He had a massive response with four MPs doing so. The charities were asked what percentage of them thought the Big Society was helping volunteerism. 95% said it did not help at all.

Francis Maude: Is there a question?

Q568 Paul Flynn: Yes there is. Do you not agree that the Big Society is embedded in the public’s mind as a big con?

Francis Maude: I hesitate to use the phrase that I used in my Independent interview, but I am very tempted and it is what I think. I would like to make that absolutely clear. I think you start from a deeply partisan position and a deeply cynical position. I think you are wrong in almost every respect.

Q569 Paul Flynn: Could I throw your words back at you? This is question two; it has taken a long time to get round to asking a question at all. When you were asked to define the Big Society recently it was not the holy grail, it was not this big policy you had-

Francis Maude: I am afraid it is only you who has described it as that.

Q570 Paul Flynn: Let me quote what was reported, although you objected to the headline. "Apparently the Big Society is now not a ‘separate entity’. ‘The Big Society is not a Government programme.’" Those were your quotes.

Francis Maude: That is exactly what I said this morning.

Q571 Paul Flynn: So it has now shrunk from a main aim of Government policy to just a twinkle in someone’s eye somewhere. Is this an idea whose time has gone?

Francis Maude: What you have quoted there is exactly what I said this morning. It is not a Government programme.

Q572 Paul Flynn: What is it?

Francis Maude: I can say exactly what I have said before, but that would probably not be the best use of the Committee’s time.

Q573 Paul Flynn: What you told us this morning was-

Chair : Mr Flynn-

Paul Flynn: Will you allow me? There are not many people who take a line; we have a witness for the Big Society here.

Chair : I am allowing you, Mr Flynn.

Paul Flynn: Yes, well we are a Parliament in which we are allowed contrary points of view. You took a long time before you called me in this morning when I had question number two, and you should stop interrupting me now and allow me to make the points that most of the country would agree with.

Chair : Mr Flynn, I am allowing you to make the points. I was just going to ask you to ask one final question.

Paul Flynn: This morning, you announced yourself as someone who is partisan on this. We are inquiring into the Big Society, its failures and the lack of any evidence of its success, and I am not getting the answers I should be getting.

Francis Maude: You are talking nonsense frankly.

Q574 Paul Flynn: That is not an answer. Where is the evidence of the success of the Big Society? You cannot even define it. You say it is an idea; what the hell does that mean?

Francis Maude: I refer you to the answer I gave earlier.

Q575 Paul Flynn: Which was meaningless.

Francis Maude: Well, you think it is meaningless.

Q576 Paul Flynn: Where is the idea embedded in society? 95% of charity workers think it is a poor idea and is not working. Who is on your side? Who is supporting you? Philip Blond, one of the big apostles of the Big Society, has deserted you. Lord Wei has gone. Where is the evidence of its success?

Francis Maude: Let me deal with that specific thing about Lord Wei when you say he has deserted the Big Society. He is actually doing it. As a social entrepreneur he is creating social capital and social action, and driving new organisations to fulfil social missions. The idea that the only way you can contribute to the Big Society is by being in government and doing it frankly betrays a completely outmoded, statist approach to life, and life has moved on. That was the 1960s; it is over.

Q577 Paul Flynn: I have a final question. When did you and the other witnesses last do a day of volunteering and where?

Francis Maude: I did half a day two weeks ago.

Q578 Paul Flynn: What was that?

Francis Maude: I was helping with a charity in Horsham involved in youth work.

Q579 Paul Flynn: Mr Hurd?

Nick Hurd: I have been mentoring a group of young kids at Northwood School who set up a business to run concerts at their school as part of their Blastbeat charity initiative.

Greg Clark: I am a trustee of nine charities in my constituency. I have recently done fundraising amongst businesses.

Q580 Paul Flynn: When was the last one?

Greg Clark: During the summer.

Paul Flynn: Okay.

Q581 Charlie Elphicke: A very brief supplementary to what Mr Flynn was saying. Would I be right in thinking that the central point you were trying to make, Mr Maude, about the Big Society not being a Government programme is that it is not something Government does. The role of Government is to facilitate, to enable, and to, classically, allow the 1,000 flowers to grow into the kind of society we could build? Is that not the key point here?

Francis Maude: Absolutely, you have put it very well.

Q582 Lindsay Roy: I just want to pick up on allowing 1,000 flowers to grow. Was Lord Wei a social entrepreneur prior to his appointment?

Francis Maude: Yes, absolutely.

Q583 Lindsay Roy: What we are trying to define is what the added value is. With all due respect, you gave a rather woolly answer earlier about somebody who did not know they were a social entrepreneur but has since discovered they were.

Francis Maude: No, he knew he was a social entrepreneur.

Q584 Lindsay Roy: Adrian Brown of the Institute for Government has argued that "the Government has yet to match its localism rhetoric with action", citing waste collection as a local matter that has in effect been determined by national policy. What examples of localism in action can you give us, Mr Clark?

Greg Clark: On the waste collection point, that is for local authorities to decide. There was a commitment made that they should not be forced to have fortnightly collections and it should be available to them to have weekly collections.

I mentioned the Localism Bill and the powers therein for every council to make their own decisions without having to respond to very detailed prescription that comes from central Government. I can give you another example that we have not touched on in planning policy. The Localism Bill introduces the possibility of neighbourhood plans for the first time. When we first talked about it we thought it was important to have some examples available when the Bill becomes law, so we invited people, perhaps expecting to have half a dozen councils that might be interested in working with parishes and with communities, to produce a neighbourhood plan. In fact we have been astonished by the degree of enthusiasm to start working with neighbourhoods even before the Bill comes into law. We have over 120 local councils now working with their neighbourhoods for the first time to have a neighbourhood plan in place when the law comes into effect. I spent some time at the Local Government Association conference earlier this year, and from all parts of the country and all parties there was a real sense that local government recognises that the even more local aspect, the neighbourhood, is very important for both the delivery of services and detecting what is needed in communities. People are taking that up in large numbers.

Q585 Lindsay Roy: So you have a wealth of information about engagement and joint action plans that have been proposed.

Greg Clark: Yes, they are being prepared even in advance of this general right being available.

Q586 Lindsay Roy: Is that from one area of the country or is it throughout?

Greg Clark: It is right across the country from both rural and urban areas. For example, I was in North Shields during the summer at the Fish Quay there. I do not know if anyone is familiar with the Fish Quay, but it is a very good example of a working neighbourhood; it is a working fish quay but there are residents there. In the past it has been in decline but is now very much reviving. You have a neighbourhood group working with the local businesses and the local authority to make sure the future vision for that area lives up to what everyone hopes; I think it is a good and inspiring example.

Q587 Lindsay Roy: Part of your portfolio is to develop and deliver decentralisation across Government Departments. What progress have you made so far in devolving power from Whitehall? Is Whitehall set up for the devolution of power to communities?

Greg Clark: Traditionally it has not been. Let me give you an example. All of us when we become Ministers, especially when moving from opposition-as Members here have perhaps had experience of in the past-are immediately impressed with the quality and calibre of the advice and help you get from the civil service. It is a great privilege to have that. My view has always been that the best ideas do not come in monopoly from Whitehall or indeed Westminster but often they come from deep within communities. It occurred to me as I walked through the door of my Department for the first time that if Ministers need this Rolls-Royce service to flesh out their ideas and overcome the various regulatory and legislative barriers that may be there, if you come in as a Government convinced that there are great ideas in communities, can you say that people in communities have access to the same help and support? Part of my purpose in my Department and more generally, as evidenced by the neighbourhood planning aspect, is to open up the Department. Over time I would like officials in Whitehall to be available to people with ideas in communities. They should have the right of initiative and should be able to do that. As an example, in my responsibility for cities, I am working with the major cities in this country so they can develop proposals that have never had an expression before-things that they would like to do differently. I have committed to make officials in Whitehall available to them to work up their proposals, and convened a cross-department group of Ministers with the volition to try to overcome whatever barriers are there. It is a change and it is a change that I think is necessary.

Q588 Lindsay Roy: As far as devolution is concerned, you would contend there has been some cultural change within the civil service?

Greg Clark: Yes, and more than that I have found the officials I have worked with on this, far from having any degree of resistance to this whatsoever, have been delighted and inspired to get out there and work with communities. This is what people go into public life for: to make things happen on the ground.

Q589 Lindsay Roy: Can you provide us with some concrete examples?

Greg Clark: Of course I will, yes.

Q590 Charlie Elphicke: To the Minister for the Cabinet Office: you may recall that in May the BBC reported the leaked contents of a memo by the CBI. It said specifically, "The Government was not prepared to run the political risk of fully transferring services to the private sector with the result that they could be accused of being naïve or allowing excess profit making by private sector firms." First, do you agree or disagree with that position, and what should the role of profit-making companies be in the Big Society?

Francis Maude: The bit of paper that appeared in the public domain was an inaccurate record of a conversation I had with the Director General of the CBI. There is a huge role for profit-making companies in our society and our economy. Already there are significant public services that are delivered by profit-making companies. Is it universally perfect? No, because we are not always that good at commissioning, procuring and managing contracts. The point I was making earlier was that it is a capability we need to grow, frankly, whether we are commissioning from voluntary organisations, social enterprises or for-profit organisations, or supporting, as we are, the creation of public service mutuals, which are groups of public sector workers who take themselves out of the public sector to continue to provide the service on a contractual rather than a managed basis. So yes there is a huge role for profit-making companies in providing public services. The point I have been making is that we have moved away from the old model where there is a binary choice between public services being provided by monopoly, in-house public sector providers, or by fully for-profit commercial providers. There is a much more mixed economy and a more sophisticated array of providers, which includes social enterprises, VCS organisations and mutuals.

Nick Hurd: One of the initiatives I am most excited by at the moment is an initiative totally led by business, Business in the Community in this case, in response to a speech by the Prime Minister called Every Business Commits. He challenged the for-profit sector to play a bigger role in society. They went away and thought about it and came up with a programme called Business Connectors where organisations such as Sainsbury’s and Greggs, big British businesses, said that one thing they would like to do is second, pay and fast-track people in their businesses to play a community role. They would play an important role in going out in communities and making better connections between what communities need and what local businesses have to offer. Most of us know from our constituents that connection does not work as well as it could. The for-profit sector have seen that need and opportunity, and is actively developing it with our support. That is a classic case of a response to the Big Society message from the for-profit private sector. The aim is to have 1,000 of these in 450 communities around the country; there is a need there and it is very exciting.

Q591 Charlie Elphicke: I completely agree with the central point that we have moved beyond binary choice-sometimes I agree too strongly. How can mutuals, social enterprises and charities effectively compete for public services, assets and so on with the private sector on a completely level playing field so they get a fair crack of the whip?

Francis Maude: That is a very good question. It is not yet right. The key elements are that you need to chunk up projects more into smaller bites so that smaller local enterprises, whether for profit or VCS and social enterprises, are better able to bid effectively. You need to run a procurement process that is less onerous. A big national charity bidding for a local authority contract to run one of the big services recently told me that the local authority had taken the perfectly sensible view that they wanted it to be run not in-house but by an outside provider, and it had so far cost the charity £800,000 just to bid for it, which is nonsense. We need to be much better at commissioning in a way that creates a genuinely level playing field. It is too easy to do things that are risk averse, with big contracts requiring a performance bond and a minimum turnover requirement for the bidders, which excludes a lot of smaller providers, particularly social enterprises and VCS providers. Then you end up with an oligopoly of big, national and multinational providers, which is not what we want to see.

Chair : We have already covered a great deal of ground but we need to get through a lot of questions, so could we have shorter questions and shorter answers?

Q592 Kelvin Hopkins: What provisions are there to ensure that services and the public money used for services devolved to the community-however we define it-or community groups, remain accountable?

Francis Maude: Greg might want to comment on this. The same way they are now. If there is a route of accountability through an in-house provider and line management, there are still exactly the same connections but through a contract rather than through line management.

Greg Clark: Sir Bob Kerslake, the Permanent Secretary in my Department, at the request of the Cabinet Secretary has published a paper on accountability arrangements in a decentralised world, which has been submitted to the Public Accounts Committee. It reiterates the point that Francis makes: there is always an accounting officer and they are responsible for making sure the systems are in place in devolved organisations to be able to account properly and rigorously for public money.

Q593 Kelvin Hopkins : I have some knowledge of small local organisations, and I know they are regarded very nervously by local authorities on the one hand and regional offices of Government on the other. What happens about monitoring quality on behalf of the public and ensuring genuine financial accountability, so the money does not slide into private pockets or is managed incompetently? How do we deal with public complaints when things go wrong? What happens if the service is just not being delivered properly? Is the local authority going to pick up the pieces and is it going to cost a lot of money and make everyone look foolish?

Greg Clark: First of all, what has been set out clearly is that it is important that the accounting officer has confidence in the systems to guarantee that all those things are both detected and rigorously managed. However, the important point to make is that there is sometimes a perception that in some ways it is riskier to deal with a voluntary group-there might be a greater instance of fraud or incompetence or whatever. Actually, studies have shown that there is no appreciable difference in terms of the loss of public money if you contract with the voluntary sector rather than doing things inhouse or contracting with other public sector bodies. I think it is important that the message is understood: there is no greater intrinsic risk in dealing with voluntary organisations compared with the mistakes that are made in every council over time. It is important that people do not have an exaggerated view of this, but it is equally important that the systems are in place to make sure that public money can be accounted for.

Q594 Kelvin Hopkins: What if a constituent comes to me who has had a terrible service from one of these voluntary groups-it has all gone badly wrong, it used to be done by the local authority-and I write to the council and they write back saying it is not their problem as they do not run it any more?

Francis Maude: It is their problem; they have let the contract and it is exactly their problem. That is a lot easier to deal with.

Q595 Kelvin Hopkins : So these will be contracts handed out from local authorities, not just independent devolved groups?

Greg Clark: The responsibility is with the council. If it is their service and they are devolving it, they are responsible for ensuring that the quality of that service is delivered and that value for money is secured. As constituency MPs we all sometimes have complaints that the council itself has not been responsive or efficient. The point I am making is that there is, I am informed, no appreciable difference or no consistent difference that would require you to have a prejudice against devolving. You are absolutely right; you need to be clear that the council is responsible for the quality.

Q596 Kelvin Hopkins: Democratic accountability means that the council have to stand for election from time to time, which puts a real force on them, and they have central Government in control of their funding fairly directly, and if they do not do it right the local audits will sort that out. Of course the media will get on it if there is a failure of social services, over child care, for example. All those forces on local authorities make them much more accountable and democratic. With local community groups, which are devolved to the community, whatever that might mean, surely accountability cannot be the same unless it comes directly through a local government service.

Greg Clark: The local authority is accountable for the spending of money on contracts. Whether they are placed with a voluntary group or placed elsewhere, the local authority is responsible for ensuring that the quality of service is sufficient-they have mechanisms in place to ensure that-and money is spent properly. That is absolutely clear and needs to be understood.

Q597 Kelvin Hopkins : And when it all goes badly wrong, do they just take it back in-house?

Francis Maude: Well no. It is a really important question and it is important we are clear about this. If the contractor, whether it is a community group, a VCS organisation or a private contractor, fails to abide by the terms of the contract, it can be terminated. It is all much more accountable. It is more accountable than in a conventional, line-managed bureaucracy, because there will be a contract, which increasingly-because of our transparency agenda-will be publicly available, and people will be able to look at it and see what it says. The contract can then be awarded to somebody else or it can be brought in-house; there are a number of different remedies available.

Q598 Kelvin Hopkins : At great expense?

Francis Maude: Not necessarily at great expense, possibly at less expense. You assume that the only way things can be done is through bureaucratic state organisations.

Q599 Kelvin Hopkins : No, through democratic organisations.

Francis Maude: Democracy lies in councillors being elected, not in a bureaucracy. Bureaucracy is not, in itself, democratically accountable.

Kelvin Hopkins : An office is accountable. But anyway, I have made my point.

Q600 Greg Mulholland: I would just like to ask Greg a slightly broader question on the Localism Bill. The principle is wonderful, the rhetoric is bold, but unfortunately isn’t the reality that a lot of what is in there is a little timid in what it will deliver? One example is the socalled community right to buy, which is not really a community right to buy; it is a community right to try. It allows a community a little bit of time to get together to come up with a bid, which can then be entirely rejected, whether it is for post offices, shops or pubs-an interest of mine, as you know. One estimate is that in about 10 years the community right to buy will save something like 10 pubs, which is not really empowering communities. Do you feel that the Localism Bill is not going to deliver the kind of local empowerment that we would all want?

Greg Clark: After 60 years of the trend being in the other direction, for increased centralism, this is a decisive reversal. It increases the powers of local authorities, such as the general power of competence, the right-for the first time-for communities to bid for an asset. This has been debated in the Commons and the Lords, so it has had a great deal of scrutiny.

What I would say on the community right to bid for assets is that a lot of communities see important assets, be it post offices, pubs or other facilities, disappearing from under their noses without the chance to put together an opportunity to keep them in community use. They simply do not know an asset is going to be for sale, and they only hear about it because a sale has been completed. The commitment we made in the Localism Bill was to give them the right to know if something of community value was being sold, and there would be a register of assets of community value. The community would have to be notified if anything on that register, which councils will put together, were to be sold. Then they will have a window to be able to put together a bid that can keep it in community ownership.

The Bill has not yet completed its passage in the Lords, but there seems to be a degree of consensus that it is a significant step forward but does not end up confiscating property that is genuinely held by people who depend on it for a living. It is an opportunity for the community to come together to prepare a bid. That is a big step forward from where we are, and that is recognised by the community groups that have been very instrumental in calling for and shaping this.

Q601 Greg Mulholland: It is a step forward, but it only applies to things on a council-held list and people can reject it. We will have further discussions about that. What are you going to do about the real concern in communities out there, particularly in rural communities, as well as suburban and urban communities and the Back Benches of both the coalition parties, that a lot of things in the Localism Bill are going to get swept away by the thrust of other Government policy? That particularly applies to the national planning policy framework and the drive for more development. Do you not accept that there is a contradiction there, and how are you going to ensure that localism does mean something when all this comes out the other end?

Greg Clark: Localism is absolutely central to all these reforms. For example, on the planning aspect we are getting rid of a great deal of the bulk; we are distilling down national policy. One of the reasons for that is that if you have over 1,000 pages of national policy it is very difficult for local communities, who we want to be in charge of the planning process, to understand the obligations and requirements. Similarly at the moment the regional strategies impose on every council in the country, and require things to be in their plans that often bear no relation to what is wanted by communities. So our purpose is to make the local plan the centre of determining planning applications and for every council to have a local plan. That is what we want to do. Throughout my whole political life I have been passionate in my belief that things should be decided by those who know their area and know the issues they want to promote. They are the best judges of these things. All of these reforms are to that end.

Q602 Robert Halfon: Do you agree that the fundamental premise of the Big Society is that it should help the little society? There are concerns from organisations like NAVCA that, instead of small community groups delivering public services, there is a danger that "contracts will be won by bigger national organisations without local knowledge". Another view is that, in essence, what you have done is ask Tesco to rebuild corner shops.

Francis Maude: That is the point I was making earlier: there is a danger that we parcel things up in too big lumps so it is much more difficult for smaller organisations to participate effectively. That is one of the concerns we have, which we can, to some extent, drive through central Government. In the wider public sector, where localism means that our writ properly does not run, all we can do is encourage.

Nick Hurd: The Big Society vision and agenda goes much wider than public service delivery and the ability of small or big charities to win public service contracts. What we are talking about, through the social action programme and the localism agenda, is trying to create opportunities for small, local community groups to have a much greater role and a much greater voice in shaping local priorities and getting things done at a local level. It is about connecting people with their power to make a difference in their communities. That applies directly to small companies.

Q603 Robert Halfon: If you talk to genuine, grassroots charities, very small organisations that do not have access to big national charities, they say that it is much harder to get a look in when it comes to the Big Society because a lot of it is coming through intermediaries. If you just take the Communities First fund, which is a good thing, with £80 million, and the Communitybuilders Fund, which is endowed with £97 million from CLG, that is gifted to the Adventure Capital Fund run by Sir Stephen Bubb’s organisation. Then there is the Community Developed Finance Association, who were given £60 million via BIS. For the smaller charities there is huge confusion over fragmented funding landscapes. Why should so many millions of pounds go to an organisation like Sir Stephen Bubb’s? I do not have anything against his organisation, but would it not be much better for that to be given directly to the real, grassroots charities rather than through intermediaries? It is the same with the Big Society Bank; Big Society Bank funds are being passed through intermediaries.

Nick Hurd: In the case of Big Society Capital, as we must call it now, the whole purpose of setting that up is to make it easier for social entrepreneurs to access capital. We have had to set it up as a wholesaler, for reasons that we can discuss, but the intent is that it should be a catalyst for providing more social finance to make it easier for social entrepreneurs to access capital, because there is a real need. In terms of the Communitybuilders Fund, which is an inheritance from the previous Administration, as I understand it that money is being lent to exactly the type of organisations you talk about. The Communities First Fund, which we are responsible for, is about putting small amounts of money into the hands of exactly the type of organisation you are talking about.

Q604 Robert Halfon: I have a couple more questions, Mr Chairman. Shelter, for example, gets £10 million a year from a state subsidy, which is fine, but that kind of organisation is going to be much better at accessing funds whereas a little organisation probably only wants a few hundred pounds and they are not getting that money. The money is not filtering through even with the economic climate; there is money available, as has been shown. There seems to be a huge bias in favour of the Tesco-type charity, or Tesco-type quango charity organisations. In some ways the Big Society has become somewhat corporatist.

Chair : Why not give parish councils the right to hand out grant funding?

Nick Hurd: In the Communities First Fund project, the money will be handed out and the decisions will be taken at a very local level, at a ward level, by citizens in those communities. We are trying to do it in a very different way to make exactly that point.

Q605 Robert Halfon: The Transition Fund required a £50,000 annual turnover, and very small grassroots organisations are not going to have that kind of turnover. Again, that was a bias in favour of bigger organisations. Would it not have been better to have a micro transition fund on top of that, or as part of the budget?

Nick Hurd: I am not discounting your fundamental point, which is that the funding environment for small, grassroots organisations is incredibly tough. Through our programme we are trying to encourage the giving of more time and money. We are trying to help that. Specifically on the Transition Fund, as we have discussed before, we had a limited pot of money to try to help those organisations most vulnerable to a cut in a public grant or contract. The information we had was that above that threshold you were likely to capture most organisations that were in that situation. We had to prioritise and that is the decision we took.

Q606 Robert Halfon: In an interview with the Third Sector magazine, Jeremy Hughes, who runs the Alzheimer’s Society, said that charities face pressure to get bigger and more centralised. He gave the example of the Alzheimer’s Society, saying it had to tighten control over many of its local offices. I have seen that locally. This has upset volunteers but was designed to satisfy Government procurement criteria. What are you doing to try to stop this centralising pressure?

Nick Hurd: It comes back to what Francis was talking about before in his answer to Charlie Elphicke’s question about what we are doing to try to level the playing field in that respect. We have touched on some of the various themes. I come back to a fundamental point, which is about impact. The whole context for this is that the country faces really significant economic and social challenges, which are deeply embedded. The whole premise of this Big Society vision is that we have handed over too much power and responsibility to Government, and it is time to rebalance that and encourage fresh thinking.

If we are going to take a fresh approach to tackling some of these really difficult social problems-keeping people out of jail, off drugs, getting them into work and so on-we have to contract with the people who are going to make a difference and an impact. Most of us know that for some of the most difficult stuff, some of the most brilliant work is often done by very small, local organisations. What we are trying to do is create space for those organisations to do more. That is a massive culture change in the system and we do not underestimate the difficulty. Things like the right to challenge in the Localism Bill are extremely important in that.

Robert Halfon: Do you not feel that we need to stop giving millions-

Chair: You have had a long run. Mr Flynn, please.

Q607 Paul Flynn: Could I support my comrade Robert over there, as always, and remind you, Francis, that you said you estimated that 35% to 40% of the value of contracts in the Work programme would go to voluntary and charity bodies. Where is the evidence of this? I can see two examples. There were 18 prime contractors and only two of them were in the not-for-profit sector. There was a group of 40 contracts for the Work programme and only two of them went to the not-for-profit sector. Again we are in the position where it is a shining dream but an ugly reality.

Francis Maude: The reality underneath the prime contracting level is that there is a great deal more being done by voluntary and charity organisations and social enterprises. Exactly what the pattern will be will take time to emerge because it is a payment-by-results model, so organisations that deliver the results of getting people into sustainable work will get the reward.

Nick Hurd: There are approximately 300 voluntary organisations in the supply chain at the moment and it is expected to evolve. The Minister responsible is on record as saying that he expects those organisations to earn at least £100 million a year. It is hard to be exact because it depends on results, but there is a major opportunity for the sector to play a very important role. Now, are there concerns in the sector about how it is working in practice? Of course; we are at an early stage. Is the Minister responsible aware of those concerns? Yes. Is he on top of them? I believe so.

Q608 Paul Flynn: Forty per cent is the promise and the dream, but 5% is the reality. Francis, when you wake up at 3 o’clock in the morning and imagine writing the manifesto for the next general election, I wonder if you will look back at your five years in power and say, "We created an ineptocracy." There were so many wrong turnings, so many U-turns and dead ends, and so many policies that promised so much but crumbled. Isn’t this what you are looking forward to: an "ineptocracy"?

Francis Maude: That is not a question; it is invective.

Q609 Paul Flynn: But that is what is happening, isn’t it? Nothing is working for you. I am trying to be helpful; I am trying to steer you to the path of doing something useful.

Francis Maude: As I said before, I completely appreciate the helpful spirit in which you offer those comments, but when you make the absurd statement that nothing is working and everything is going wrong, all I can say is that I profoundly disagree.

Q610 Alun Cairns : I would like to speak on a rather more positive note about the Big Society. As the cultural change is brought about and the Big Society filters through to the community groups to empower them and give them greater strength, what about the risk to continuity of the service that they will hopefully pick up from local authorities and other organisations? What steps are you taking to ensure that the transition is smooth and there is continuity?

Francis Maude: Continuity when an outside organisation picks up a service?

Alun Cairns : Yes.

Francis Maude: Very often the same people will be TUPEd over into the new organisation. Sometimes you do not want there to be continuity. If things have not been done very well, you want there to be a change. Far too often when we, the public sector, commission outside organisations of whatever nature to deliver public services, what we tend to do far too much still is over-specify and over-prescribe how the service is to be provided. We need to be much more in the realm of specifying the outcomes, prescribing what the outcomes are and allowing the bidders and providers to find innovative ways of providing those outcomes. Far too often we lock in old ways and the status quo. Quite often you do not want there to be continuity; you want to engage those who have found a different and better way of doing things, so that the money can go further and yield better results. Continuity is not always a good thing.

Q611 Kelvin Hopkins : Does the implementation of localism mean that the public should expect different levels of service depending on where they live? Already there are constant scandals about the postcode lottery, even with existing public services. A major concern of the electorate is equity and fairness across the country. Will this new localism mean that diversity and equality of provision get worse across the country?

Francis Maude: I always dislike the phrase postcode lottery, because it suggests it is completely random. There will be differences. Where there are differences by postcode it is because somebody somewhere has made a decision; maybe the voters have voted for different priorities in the local authority, or professionals have decided to make different decisions about clinical priorities in the health service. So are you going to see more differences in the way things are provided? Yes. That is not just about level or standard; a lot of it will be about different priorities, reflecting what different communities and different people care about. The idea that everything should be absolutely uniform across the country in the name of equity is actually a recipe for stultifying mediocrity.

Q612 Kelvin Hopkins : Obviously differences in style of provision is one thing, but when there are gross differences in the level and quality of provision, people will be upset and quite rightly so.

Francis Maude: Well, yes, but one of the things we are doing is aggressively driving a transparency programme, where we disclose much more about what the different outcomes are. This can have dramatic effects. Some years ago, under the last Government, Sir Bruce Keogh, who is now the Medical Director of the NHS and the doyen of cardiac surgeons, persuaded his peer group of cardiac surgeons voluntarily to make public the outcomes from cardiac surgery, including mortality. This was a very brave thing to do and highly commendable. It disclosed quite wide variance in outcome between different centres and different surgeons. The consequence of that was that some bad practices were eliminated. All the outcome measures have dramatically improved since then. One of the measures has improved by 50%; the one that moved least moved 22%-improvements in mortality rates.

Q613 Kelvin Hopkins : Can I just take that point? Giving more independence to local hospitals actually saw the appalling tragedy of the Staffordshire Hospital where there were 400 unnecessary deaths, driven by financial concerns, it seems, because it was given more independence. Is your proposal to develop more localism not going to make that kind of situation more frequent?

Francis Maude: It is not obvious that you avoid that by having more direct, topdown control. That was a really badly run hospital. The transparency measures we are now putting in place would have thrown up much more quickly that there was something going wrong there, and would have enabled patients and GPs, when they were sitting with their patients to decide where to send them for their operation, to say, "I do not like the look of that hospital because their outcome measures are dreadful." People very quickly start to ask what they are doing there that is leading to those outcomes. Why is that hospital up the road in StokeonTrent, or wherever, looking much better, and what are they doing that Stafford Hospital is not doing? Therefore you start to get the spread of good, often innovative practice, which produces better outcomes.

Q614 Kelvin Hopkins : Don’t the electorate just want every hospital to be a good hospital, and isn’t it the Government’s job to make sure that happens?

Francis Maude: Of course everyone wants everything to be good; that is a statement of the obvious. The question is not whether everyone wants everything to be good; it is how do you achieve that? The key thing you are focused on, which I think-from your line of questioning-is a fundamental difference between what you think and what we think, is that you think the only way of achieving that is by top-down diktat: dictating practice and service levels from the top. We think the right answer is to empower those who are delivering frontline services, make them much more accountable to those to whom they are delivering the service, increase transparency, and enable the people who are going to benefit or suffer from the service to see what the outcomes are. We think that is a much more progressive way of driving better public services.

Q615 Paul Flynn: I just feel I have gone back 40 years to departments of universities, when they were talking this populist, vacuous and optimistic view that you have now.

Francis Maude: I apologise for being optimistic.

Q616 Paul Flynn: I suppose I should congratulate you for not blaming the European Union or the last Labour Government for any of the problems now. You are giving more power to professionals in the health service, rather than insisting they are more exposed. You are giving them a position where they can conceal more.

Francis Maude: I do have to deal with that because you could not be more wrong. You have made a lot of effort today to be more wrong than that, but actually that takes the biscuit. We are making it impossible for professionals to conceal the outcomes.

Q617 Paul Flynn: If you succeed in that you will have succeeded in doing a great deal, because this has been a problem that has been around for the 25 years I have been in Parliament. I have traced many areas where the drug companies and professionals in the health service have concealed practices that were leading to unnecessary deaths.

Francis Maude: That is precisely the culture that we are challenging.

Q618 Paul Flynn: It has been something taken on by all parties for a long time. In evidence given to us, David Lewis, Professor of Social Policy at LSE, talked about how the voluntary sector may well offer the possibility of better services but not necessarily at better value. There were examples given of this: of how in fact you might find that you are in conflict, and if the voluntary bodies do take over services, they will in fact add to the costs. What evidence do you have that this is not happening?

Francis Maude: If there is a competitive process, then the winning bidder needs to show not only that they are able to deliver the quality but they are able to provide good value.

Q619 Paul Flynn: What comparative costs do you have where you have measured one against the other?

Francis Maude: You have a competitive process that should show that whichever bidder wins the contract is doing it for the best value.

Q620 Paul Flynn: The voluntary services said to us that "the perception that paid voluntary sector and public sector posts can be substituted by volunteers devalues the particular professional skills of the employee, fosters a perception of the voluntary sector as a cheap alternative and undermines the credibility of the Big Society." Isn’t that a fair point?

Francis Maude: No, frankly. For example, in the field of youth services, in general inhouse, local-authority-provided youth services do not mobilise volunteers, so the money does not go very far. Most local authorities are now spending less on youth services, but if they are engaging the voluntary sector in the provision of youth services, those voluntary bodies are able to mobilise volunteers to a much greater extent and the money goes a lot further. You can actually multiply the amount of activity for less money. Do people feel degraded by that? Actually, I do not think so; I think it is a really insulting attitude.

Q621 Paul Flynn: Even with your blunt metrics, when do you hope to present an assessment of how the Big Society is doing?

Francis Maude: If you tell us which metrics you would like us to measure, we will do our best to measure them.

Chair : We may well do that.

Q622 Paul Flynn: Do you have any at all? You say you do not have any sharp metrics. How on earth are you going to assess whether this is a success or a failure when we have to take our decisions on which party we support in 2015?

Francis Maude: Obviously it is going to be an open question in your mind.

Paul Flynn: As always.

Francis Maude: I have said that there are not any obvious metrics for measuring how big society is. You can do things like counting how many formal neighbourhood groups there are, how many civil society organisations there are, but a lot of this is happening beyond the view of officialdom, and so it should be.

Q623 Paul Flynn: It is "trust me, I am a politician". "I am a politician, trust me, trust my rhetoric." You have nothing to prove whether it is working or not.

Francis Maude: Is that an invitation?

Q624 Lindsay Roy: Are public services going to be too big to fail? We have the example of 2,000 schools that will be required to have direct intervention from Whitehall rather than from the local authority if they fail.

Francis Maude: I do not fully understand what the question is.

Q625 Lindsay Roy: Will there have to be a safety net to support people if there is failure?

Francis Maude: It depends what you mean by failure. If a provider fails to meet the terms of the contract in terms of providing-

Q626 Lindsay Roy: Criteria, objectives, outcomes.

Francis Maude: Yes, if they fail to comply with the terms of their contract, the contract can be removed. Where there is a rich ecology of different providers, you have the possibility of either bringing it in-house, as we talked about earlier, or engaging a new provider to take over the service.

Q627 Lindsay Roy: Do you feel there will have to be Government intervention in such cases?

Francis Maude: In some cases that will be the case, yes.

Q628 Lindsay Roy: Is there a fund for that?

Francis Maude: A fund should not be needed. If there is a service being provided, there is a stream of funding for that service.

Q629 Lindsay Roy: No additional resources would be required?

Francis Maude: You can never completely exclude the possibility that no additional resources would be required because life is not a wholly predictable business. However, if a contractor providing a public service stops providing it for whatever reason-because they go bust or because the contract is terminated for failure to deliver-there is still a continuing funding flow to fund the provision of the service; you just need to find another provider. In some cases that may need more resources, but it is very much case by case.

Q630 Lindsay Roy: If there is a vacuum, is there any intervention funding available?

Francis Maude: I cannot quite visualise what kind of vacuum you have in mind.

Q631 Lindsay Roy: Take, for example, a free school that does not meet the outcomes and there is still a need for education within the community. Does the transformation take place immediately?

Francis Maude: Do you mean if it is failing to deliver?

Q632 Chair : What happens if a free school gets into financial difficulties? What happens? Does the local authority come in and take it over? Does the Department for Education rescue it? What happens to stop the children being thrown on to the street?

Francis Maude: The school continues to exist, the building is still there and the teachers are still there. There is a flow of funding attached to the children and there are a number of ways of dealing with it: it could go into local authority control; it could be taken over by a different management or by the management of an academy locally.

Q633 Kelvin Hopkins : A private company?

Francis Maude: Well no, because we have said that they will not be run by for-profit operators, but there are many different outcomes. There is no central regime.

Q634 Chair : We would like to ask about Big Society Capital in the last few minutes, if you could stay an extra few minutes?

Francis Maude: I would be delighted.

Q635 Chair : Are there any other matters not covered that colleagues would wish to cover before we do that?

Kelvin Hopkins : There is one question about some charities believing they are being used as "bid candy" in the Work programme process.

Chair : I was so looking forward to Mr Flynn asking that question, but would you like to address that particular point?

Francis Maude: What was the point?

Q636 Kelvin Hopkins : It has been reported that some charities believe they were used as "bid candy" in the Work programme process.

Nick Hurd: I have heard the expression and I have heard the concerns. The reality is that if you are contracted on a payment-by-results basis, and this is the biggest ever done, then the prime contractor is extremely interested in delivering results. Therefore they are fully incentivised to work with those who will deliver those results. That is the economic driver underpinning this. If you talk to the Sercos of this world, as I have done, about the Work programme, they are subcontracting most of it because they recognise that they are working with parties that have a better chance of delivering results than they do. Are there concerns in the voluntary sector about how this is working? Yes, but it is early days and, as I said to Mr Flynn, it is being monitored very carefully because the expressed desire of the Government is that the voluntary sector gets a very good crack at this because we want the results.

Q637 Kelvin Hopkins : I cannot be too pointed about this, but I know of a situation where a consortium of local providers and voluntary groups who put in a bid for local government were not even shortlisted. It turned out that they were not shortlisted because of the advice of a consultant sent down by central Government, not because of the local authority’s decision. That is something I am currently fighting and I shall be writing to you about it.

Francis Maude: We would be interested to know about that.

Q638 Kelvin Hopkins : It looks like private companies and "bid candy".

Nick Hurd: All I can say is that Chris Grayling, the Minister responsible for that, is on record as saying he will act very robustly with prime contractors who have been proven to be acting irresponsibly with their supply chain. He is monitoring this very carefully and we are helping him with the granularity and the specific examples of where things might be going wrong.

Q639 Chair : Thank you. We will be writing to you with some specific questions about Big Society Capital, but I want to ask about a specific matter. We are going to visit an Emmaus community as part of this inquiry. I have one in my constituency, in Colchester, and I am advising Emmaus nationally on how to approach the Government with regard to Big Society Capital and what you call payment by results-directly funding charities for outcomes.

We have had a meeting with Mr Letwin, Mr Grayling-the Minister responsible for the Work programme-and Grant Shapps, the House Minister. Emmaus wants a single contract. They deal with people who are homeless, who have mental health difficulties, who are drug or alcohol dependant, who are out of work and are faced with huge challenges. Some of them will never work, so they cannot be in the Work programme. The Work programme cannot deal with people with mental health difficulties. They want to be able to expand to Emmaus communities across the country, for which they need capital. Big Society Capital should be able to provide that capital against an income generation scheme based on their very successful track record of producing positive outcomes. They are going to have to deal with three, four or five separate Government Departments, even in respect of single, individual cases. What is the Government going to do to enable them to have a single contract with central Government to produce these outcomes, which are so desirable?

Francis Maude: There are things we can do, but we cannot solve it all. Community budgeting, which Greg may want to say a word about, is one way of doing it. What you need to do in some of these circumstances is to try to funnel all the funding there is, because some of the families and individuals you are talking about, as well as the social misery and human unhappiness, are a massive cost to the taxpayer. We are still far too often ineffectively managing the symptoms of failure. It is really difficult; there are huge cultural and institutional challenges in pulling together funding streams, which may come through the NHS, through the criminal justice system, policing, local government, the welfare system-

Q640 Chair : Ex-offenders, they have them too.

Francis Maude: -and then trying to get an organisation like Emmaus to be able to configure the services the individual or family needs.

Q641 Chair : Is there not a case for the Cabinet Office holding a central budget for this type of contract on behalf of the other Departments?

Francis Maude: But it would be the Government’s budget.

Q642 Chair : Yes.

Francis Maude: My point is that it would be a huge chunk of the Government’s budget.

Q643 Chair : At the moment we are presented with no solution to this.

Francis Maude: It is the welfare budget, the NHS budget, the police budget and so on.

Q644 Chair : But people’s problems do not fit into departmental silos.

Francis Maude: Life is very untidy and there is not a simple institutional way of solving it.

Q645 Chair : I think there has to be one.

Francis Maude: Ideally there would be solutions to every problem. There are ways of addressing some of this on a much more local level. Community budgeting and local, integrated services is one way of doing it.

Greg Clark: The community budget programme is designed to reflect precisely that reality; that you have multiple symptoms of commons causes. If you just treat the symptoms, you do not address the causes. So there is work going on across Government that brings together the different Departments, in both particular areas and particular groups of people, to try to bring those budgets together. If this is something the Committee wants to go into more detail on, I can supply some evidence.

Q646 Chair : Maybe I could bring Emmaus to meet you? Maybe this accumulation of budgets from different departmental headings could be held and contracted at local level?

Greg Clark: My colleague Baroness Hanham is the Minister responsible, but I would be very happy to meet you and Emmaus with her.

Chair : This is something we want to address in our report and it is something we want to make some positive recommendations on, because it affects many more charities than Emmaus, where they are dealing with people with multiple needs and multiple difficulties.

This has been quite an electrifying session, if I may say so. I am extremely grateful to the three of you for giving up so much of your time. I have to say I am not clear about the shape of our report even at this stage. We are collecting some written reactions to the Open Public Services White Paper. We are nevertheless extremely grateful to you for being with us this morning.

Prepared 19th October 2011