Previous Section Back to Table of Contents Lords Hansard Home Page

One of the most important questions in the debate was asked by my colleague and noble friend Lord Jenkin, who asked whether the Select Committee would return to the matter. The answer is not to that question; the answer concerns when we will return to the matter. The practice of the Select Committee, over the last two or three years, has occasioned no fewer than eight follow-up reports, because we do not let a matter rest until we are reassured that it has been, to carry on the metaphor, worried to death both in report and in this Chamber. Perhaps I might conclude by telling the Minister, on behalf of the committee, that when the follow-up comes the first question will be, "What did we learn this time?", and the second will be, "What additional data did we collect that will help us in the future?".

Motion withdrawn.

Smarter Government


6.40 pm

The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Davies of Oldham): My Lords, with the leave of the House, I shall repeat a Statement made by my right honourable friend the Chief Secretary to the Treasury in the other place earlier today.

"With your permission, Mr Speaker, I would like to make a Statement on Putting the Frontline First: Smarter Government, a command paper that I have presented to Parliament today.

This Government are very proud of Britain's public services and Britain's public servants: our doctors and nurses who treat 1 million people every 36 hours; our police teams who brought down crime by one-third; the teachers and support staff in our schools who have helped record numbers of young people do well in their exams; our jobcentre staff who have helped

7 Dec 2009 : Column 947

2 million move off unemployment since last November; and, of course, our Armed Forces, serving with such distinction in Afghanistan and around the world.

We always knew that with the right backing, Britain's public servants could transform the quality and the standards of public service in this country, and over the past decade they have-not by some happy accident but by the work of careful design and determined investment. NHS investment doubled, education investment is up by 60 per cent and investment in public order and safety is up by 50 per cent. We did this while overdelivering by 20 per cent our Gershon review savings of £26.5 billion in the three years to 2008.

Thanks to that effort, we have now reached the point where the investment gap that we inherited in 1997 has been fixed. We have not only reached but exceeded international averages for spending on education and health. We are now at a turning point where, in the decade ahead, we can capitalise on the great strengths that we have created and set out a new way of driving standards in public services up while we drive the deficit down.

I am therefore laying in the House today a command paper entitled Putting the Frontline First: Smarter Government that shows how the Government will set about that task. It draws together over 12 months' work from literally thousands of people from across public life, the private sector, charities and voluntary groups, leaders of public services and those on the front line.

In particular, I want to thank Sir Michael Bichard and public servants from 63 councils, 34 primary care trusts and 13 police authorities who have contributed to our trials of Total Place, and the many local areas undertaking similar work; Sir Tim Berners-Lee and Professor Nigel Shadbolt; Martha Lane Fox and her Digital Inclusion Taskforce; our efficiency advisers Gerry Grimstone, the noble Lord, Lord Carter of Coles, Martin Read and Martin Jay; and leaders from across the third sector who have advanced the relationship between the Government and civic society.

Today's command paper summarises what we have learned from that work. Our starting point is a relentless focus on standards. We are ambitious for Britain's future and we know that we can do well in the years to come, but we know, too, that Britain's families will more readily succeed and do well in life if they are supported by first-class public services. So we will make first-class standards in public services not a privilege for the few but the right of all by setting out new entitlements to high-quality public services in health, education, policing and, in time, social care, backed where appropriate by the force of law.

To help citizens to hold local services to account, we will revolutionise the free availability of comparative information on police efficiency, hospital costs and local authority spending. We will make sure that services, where they can, will fit in with the demands of busy modern life by putting many more services online faster. We will redouble our efforts to get more people online. Today I can announce £30 million more to get 1 million more people online by 2012.

7 Dec 2009 : Column 948

We will free public data created using taxpayers' money, including Ordnance Survey mapping and boundary data, and we will make it easier for civic society to contribute to public life by pressing ahead with a new social investment wholesale bank and testing social impact bonds.

Our second principle will be to free up the front line to innovate and collaborate by cutting back on ring-fenced budgets and national targets. I am therefore setting out today 10 steps drawn up by myself and the Secretary of State for Communities and Local Government to provide our local councils with a range of trading, joint venture and regulatory flexibility. We will cut the cost of local inspection. We will identify burdens on local areas where the cost outweighs the benefit, and remove these in time for the 2011-12 financial year. In preparation for the next spending review, we plan to radically reduce the number of targets.

If we set in place strong rights to high standards and free up the front line to innovate in a more flexible way, then I believe that we can cut back on the overhead costs at the centre. We are already on track to deliver £30 billion of savings between 2008 and 2011. Today, though, I am setting out steps to save £12 billion, and in the Pre-Budget Report we will set out further tough choices towards halving the deficit.

First, we will reduce the costs of the senior Civil Service. I am announcing today that we will reduce senior Civil Service costs by 20 per cent by 2012-13, and that we will seek to move 10 per cent of civil servants' posts currently in London and the south-east to other parts of the country in the medium term.

Secondly, I can tell the House today that Bill Cockburn, chair of the Senior Salaries Review Body, will review senior pay across the whole of the public sector, reporting to the Government in time for next year's Budget. In the mean time, I will personally review all proposals of salary offers of over £150,000 set by the Government.

Thirdly, we are publishing today plans drawn up by every Secretary of State to increase administrative efficiency for which they are accountable in back-office operations, including human resources, IT, collaborative procurement and asset management. I am also today publishing benchmarking information for all central government departments and government agencies showing exactly where we will focus to deliver these gains. I am also today setting a goal of saving £1.3 billion by putting services online, halving the consultancy bill and reducing marketing spend by one-quarter.

Fourthly, I am announcing today the first results of a comprehensive review of arm's-length bodies, to report by Budget 2010. I am announcing today that we will save £500 million a year from changes introduced by the review. I am able to tell the House today that as an interim step, subject to the necessary consultation and legislation, we will abolish or rationalise 123 arm's-length bodies.

Finally, I believe that, as part of this new future, the Government must either sell or transfer to better owners the things that they no longer need to own. I am therefore publishing today an asset portfolio listing the state-owned assets that the Government could commercialise over the medium term. This includes options for the future sale of the Tote, the student loan

7 Dec 2009 : Column 949

book, the Dartford crossing and the High Speed 1 rail link, and for potential alternative forms of ownership for British Waterways agreed by myself and the Secretary of State for Defra. Our policy will also include a new approach for testing where publicly owned assets should be transferred for use by the third sector.

This Government believe that this country is both richer and fairer for the strength of our public services. We will never compromise on high standards, but we will never compromise either in our search for value for money. Today's command paper sets a new path for the future that draws on the strengths created over a decade's work, and I commend it to the House".

My Lords, that concludes the Statement.

6.49 pm

Baroness Noakes: My Lords, I thank the Minister for repeating the Statement made in another place. Noble Lords might think it strange that this Statement is made just two days ahead of the Pre-Budget Report. As usual, the press has been full of stories about what might or might not be in the PBR, but today the Prime Minister chose to steal the Chancellor's limelight by announcing the efficiency component of the PBR and then sending the Chief Secretary along to the other place to explain it. This has all the hallmarks of dysfunctional government, and does not surprise us.

I turn to the content of the Statement and the document, Putting theFrontline First, which basically sets out the Government's efficiency stall in a pretty wrapper of citizen-centred jargon. We should recall the Government's record on efficiency. The Office for National Statistics has confirmed that in the 10 years after 1997 public service productivity fell by 3.5 per cent. Private sector businesses improved productivity by 30 per cent in the same period. Put simply, the Government have mismanaged our public services to a shocking degree.

Back in 2001, the Prime Minister told the Institute of Directors that,

The only area in which the public sector has raised its game is announcing efficiency savings which are not delivered.

In 2004, the Government announced £20 billion of efficiency savings following Sir Peter Gershon's review. The NAO's first look at those savings in 2006 showed that they were "provisional", which is code for "they don't exist". The Government then claimed that they had realised £13 billion of the savings. However, the NAO said in 2007 that only £3 billion had been achieved. The rest was to varying degrees a figment of the Government's imagination.

Since then, the Government have repeatedly boasted, as they did again today, that they have achieved £26 billion of savings. The Minister also said that the Government are on track to achieve £30 billion of savings between 2008 and 2011. The document refers to £35 billion. Can the Minister explain how £5 billion was lost between the document and the Statement? However, all these assertions are unaudited and, given past form, why on earth should we believe a word of them?

7 Dec 2009 : Column 950

Today, we have heard the final chapter of the Prime Minister's long-running fairytale about efficiency savings. We are promised that another £12 billion a year will be realised. But there is precious little detail. The only figure found in the Prime Minister's introduction to Putting the Frontline First is a saving of £100 million from streamlining the senior Civil Service. The Statement referred to a couple more figures, and various other figures are scattered throughout the document, but there is no summary of the savings and little information about when they will be realised. There is no mention of costs incurred in achieving those savings.

My first question to the Minister is whether the Government will place in the Library a schedule which sets out the various savings mentioned in the report, analysed by the year in which they will arise and reconciled to the overall £12 billion. Will the Minister also undertake that the schedule will include the costs of delivering the savings?

Secondly, I ask the Minister to say what contingency lies behind the figures. The Government will be aware that people, whether in the public or private sector, tend to be optimistic about the amount of savings and their timing. For what contingency have the Government allowed in announcing savings of £12 billion?

Thirdly, I have one detailed question for the Minister. Yesterday, the Chancellor said on air that the NHS IT project would be put on hold. He said:

"I think that we don't need to go ahead with it just now".

Three cheers for that; we have been saying for some time that it is a wasteful project. But today there is confusion, with a Department of Health official reported as saying that the Chancellor "misspoke". What, if anything, is included within the totals dealt with in this Statement relating to the NHS IT project?

In many ways, we are immensely flattered by the document. It plays catch-up with many of the things that my honourable friends Mr George Osborne and Mr Philip Hammond have announced during the past few months. For example, we announced a complete re-think on quangos, cutting the cost of Whitehall by 20 per cent, and handing power to front-line professionals. In some other areas, the document does not go as far as us. We have gone further on signing off high levels of public sector pay and on cutting the consultants and communications budgets.

Quite a lot of the document merely reannounces existing policies. We have heard before about community asset transfers, about patient-focused approaches in health, about e-auctions and about reducing ring-fencing in local authority finance. We have heard about the Tell Us Once programme three times already.

There is also a lot missing from this document. One huge cost overhangs our future; namely, the cost of public sector pensions, but there is not a word about it. There is nothing in the document to give any confidence about delivery of savings; for example, about the role of incentives in delivering savings. We are yet to be convinced that the tentative moves towards cost transparency go anything like far enough.

When the Prime Minister was the shadow Chancellor of the Exchequer in 1995, he told the Labour Party conference:

7 Dec 2009 : Column 951

"We abhor waste and imprudence in public spending not because it is electorally convenient to do so or the markets don't like it-but because the victims of waste are not those with money but those who find it difficult to make ends meet and for whom the best form of kindness is efficiency".

What a pity that the Government have spent the past 12 years dishonouring that fine sentiment.

The only reason for today's Statement is electoral convenience. The Government calculate that they can convince the electorate that the years of failure on efficiency can be wiped out by a skimpy document. The only kindness that is now appropriate is to put this Government out of their misery and let a new Government, committed to real public sector reform and efficiency, take control of our economy.

6.57 pm

Lord Oakeshott of Seagrove Bay: My Lords, I, too, thank the Minister for doing his duty, repeating the Statement from another place. The Statement sounds as if it is coming from a new Government taking over a brave new world, not from the same tired old team who have been running the shop so inefficiently during the past 12 years. If so much of what is proposed is so obvious and so easy, why have they not done it already? What have they been doing?

The National Audit Office, in its second review of progress on Gershon targets, pointed out that 23 per cent of the claimed savings could not be proved. So they were funny money. The Statement refers to halving consultancy fees. How on earth has the Treasury alone managed to run up a consultants' bill of more than £120 million just for dealing with the banks during the past couple of years? Is there not anyone left in the Treasury who knows how markets work and can do that job themselves? What are they paid for?

I should declare my interest as a pension fund manager investing in property. I have had a quick look through the asset portfolio programme and must say that there are some wonderful statements in it. I particularly enjoyed that relating to the long delayed sale of the Tote. The Government announce that it is,

Well, as it is the country's fifth biggest bookie, you could say that again. We have the ultimate in unjoined-up government when they say that they want to sell off Ordnance Survey while making a considerable part of its product free. That seems unlikely to work.

I have some more detailed questions. The new social investment wholesale bank is meant to be funded from dormant banks and building societies, but so are community youth clubs and financial capacity training. How much money do the Government think will be generated? How confident are they of being able to fund all those different projects?

We then turn to reducing Civil Service costs. What will be the breakdown of this? How much of it will be done by reducing pay or stopping bonuses, and how much by cutting posts? Indeed, why should any senior civil servant get a bonus at all this year, while Britain is in deep recession and private sector pay is frozen or falling? We also welcome the increasing interest of the Conservatives in public sector pension costs. It is a

7 Dec 2009 : Column 952

great shame that they did not support our amendment to set up a public sector pensions commission to have a rigorous look at public sector pension costs when it was moved during the Pensions Bill, but we welcome their support. When will the Government get a grip on public sector pension costs, which typically add between a quarter and a third to the pay bill for providing front-line public services?

There is now a policy that all salaries in the public sector-or is it the public sector?-of over £150,000, set by government, will be reviewed in detail. The Statement says "set by government", but what exactly does that mean? I wonder whether we could not go considerably further than that and say, "Why should any civil servant or local authority chief-people who are not, frankly, in the commercially sensitive or competitive front line-earn more than £200,000, which is more than the Prime Minister?". How in principle can we justify that? There is also this totally arbitrary figure of £500 million to be saved by cutting arm's length bodies. Where has that figure come from? Where on earth does 123 come from? The target for reducing advisory bodies is a quarter. Why is it a quarter? Why not a fifth, a third or even a half?

As the noble Baroness has said, the asset sales are just a re-announcement. We called them a car boot sale last time. Two months on, the goods look even more shop soiled-like the Government, who review, re-announce and rebrand ad nauseam, but cannot take decisions to save their lives.

7.03 pm

Lord Davies of Oldham: I think that I am grateful to both noble Lords for their comments. Given the success that we have already had with the Gershon project, I find the last statement of the noble Lord, Lord Oakeshott, rather extraordinary. He said that the Government are incapable of effecting savings, but we have a proven record of where we have done so. I hope the noble Lord will at least recognise the strength of that statement, as far as the Government are concerned. I am aware that, like the noble Baroness, he places great emphasis on the comments and conclusions of the National Audit Office. It noted that projects across the programme are making significant improvements to the efficiency of public services. Our £26.5 billion SR04 savings, which were quoted in the Statement, meet the most robust data category of the National Audit Office. It really will not do for noble Lords opposite to suggest that the Government have a poor record on value for money.

I understand entirely their criticisms of the projections for the future because they are not in the business of giving the Government credit for their productive approach to this issue. However, they surely cannot gainsay past achievements. Indeed, the Government have a strong record on value for money. We overdelivered on the Gershon target by 20 per cent; this was in the Statement. We achieved £26.5 billion of savings over three years. I am not going to have lectures about how the Government deal with issues of value for money from the Opposition, who have forgotten how to govern, or from the Liberal Democrats, who probably never even knew-or certainly not in a century that we can readily recall.

7 Dec 2009 : Column 953

The noble Baroness suggested that this was a dysfunctional Government because the programme was introduced by the Prime Minister, who happens to be responsible for the totality of the Government. As the House will have recognised, the Statement ranges right across the totality of government-the whole area of public service. Of course, the Chancellor has a significant role to play. How could it be otherwise when it is the Chief Secretary to the Treasury who is making the Statement because of his discrete area of responsibility? The relationship between these savings, the overall position in the running of the economy and projections for the next few years relate directly to the fact that this Statement is made on Monday and the Chancellor will be making his Statement on the Pre-Budget Report on Wednesday. Far from it being dysfunctional, I cannot think of a better locking together of two propositions, put before the other place in the space of three days and considered, in due course, in this House. They show the totality of how we see our route to map the economy to deal with what we all recognise, as a result of the credit crunch and the recession, is an immensely challenging position for the Government, in circumstances where resources are bound to be scarce.

The noble Baroness asked whether the schedule of savings should be placed in the Library. She knows, of course, that we will be concerned to identify the costs of the programme. I hope the House will forgive me if I go through a little list. We will place the clear figures that we intend to save across a whole range of significant headings. They can be checked against those headings, such as "Increasing energy efficiency"-with a saving of £300 million-and "Reducing consultancy and marketing spend by 50 per cent". That is in the Statement. That is easily checked. We are saying that we intend to save £650 million over this period under that heading. We intend to do so and it can easily be checked. We said that we will rationalise arm's length bodies. We intend to save £500 million there. We are identifying the number of those arm's length bodies that we intend to address. We will have a list in due course. I give way.

Baroness Noakes: I am grateful to the Minister for giving way. He is very good at reading out what is in the Statement. He has given totals for various items. I asked for that to be brought together comprehensively, split out over the years and reconciled to the £12 billion. I hope he will commit to putting that in the Library.

Next Section Back to Table of Contents Lords Hansard Home Page