Select Committee on Public Administration Minutes of Evidence

Examination of Witness(Questions 66-79)




  66. Could I welcome Sir Michael Bichard as our witness this morning. I am tempted to say once more meeting like this because you are a regular attender at our sessions, for which we are very, very grateful. The fact that we keep asking you back means that we like what you say, or at least you challenge us with what you say. I suppose we thought that now you are a free man you might speak even more freely to us than you had been able to before. Whichever inquiry we are on we seem to want to know what you think about it. We are now doing an inquiry into targets, measurements, league tables, all that kind of thing, government by measurement. We want you to tell us your experience of working that system, what you think about it and any alternative approaches that may be helpful. I think you have something to say to us by way of introduction.

  (Sir Michael Bichard) I thought it might be helpful if I just said a few words around targets and tables and we can take the discussion from there. I am not going to go through this line by line but basically what I am saying is that I think targets and performance tables and measurements have an important part to play in improving public services. That is because they focus energy and effort and they enhance accountability but both of them, I think, carry risks and dangers, which is obviously why you are having this inquiry. I think it is important to learn the lessons of experience. As far as targets are concerned those lessons are, amongst others, that targets are best if they are set by people who have actually been involved in delivering operations and targets, and that is not always the case in government. I think, and I am sure that you have come to this conclusion anyway, that they should be small in number. I say that with the benefit of experience having led the Benefits Agency for five years which had 152 targets. It is quite difficult to focus 65,000 people on 152 targets. I think that they should be largely outcome based and certainly not about process. They should be measurable and they should be expressed in terms of client needs. I think too many public service targets do not address the client need and, therefore, do not have much ownership from clients or from staff. Obviously, and again it is a basic point, they should be stretching but achievable. It is important because unrealistic targets do not raise performance, they just demoralise people and sometimes lead to poorer performance than you started out with. There are several points around review which I think are quite important. The way in which the targets are formulated needs to be regularly reviewed because over a period of time any target can begin to distort behaviour and over time any target can be manipulated. I think the formulation of the targets needs to be regularly reviewed and regularly refreshed. I think also the management of the targets itself needs to be regularly policed and audited because especially if you are linking targets to paying bonuses then there is an incentive there for people to fiddle the targets to enhance their salary, therefore there should be clear auditing arrangements. We had serious problems with the Employment Service many years ago when there was less than honest management of the target regime that was in place at the time and the Chief Executive had to be very brave in saying "This is not acceptable. We are going to root this out and approach these in a totally honest way". I think targets have got to cover all levels of delivery. It is absolutely hopeless to set a national target and then just tell local delivery units to go away and achieve those because they have got no idea what that national target means in terms of their performance, what they need to do to improve so that the national target is achieved. I think you need the target set at all levels. They should not be so detailed as to strangle any scope for creativity. Once you get really detailed targets which prescribe precisely how things should be done rather than what you are expecting the outcome to be then I think you take away the scope for innovation and creativity which seems to me to be one of the great keys to public service reform and improved service delivery, which I actually think is a major problem in this country at the moment. The lack of creativity in public but also private sectors is a real issue. The targets need to be owned by staff. That means you need to involve staff in setting the targets. They need to be influenced by clients and by the wider community, so consultation with staff and community consultation is very important. Obviously they need to be rigorously monitored and reviewed. I say "obviously" but I think senior management can send very strong messages by personally being involved in reviewing the performance against targets and making it absolutely clear that the senior management is committed to delivery. I think there are only two other points to make, and they are more general points but they are really rather important. I do not believe that targets can ever tell the whole story. They are important, they can be a good focus, but we should never believe that they can tell the whole story. Some people say the problem with targets is that they deflect attention from all the other things that are going on in an organisation. There is that danger but without them I think people are unfocused and tend to concentrate sometimes on the trivialities, the things that matter to them personally which are not necessarily what matters to the client and the organisation. On balance, again, I think targets are a good thing but they cannot tell the story. Finally on targets, and I know this is almost a waste of time making the point, I do worry about the media response to performance against targets. If I was in government I think I would be increasingly cautious about setting explicit targets simply because I think the media response to a target which is missed even by a small amount is that this is a complete failure. I do not think in the private sector and in the best parts of the public sector that is how it would be perceived, and that is not how it should be perceived. If you are setting stretching but achievable targets, probably 50 per cent of the time you are going to miss them, hopefully just, but you will achieve a great deal more than you would have done if you had not set them. I think the media response to things like literacy and numeracy targets, you will not be surprised to hear me say it, saddens me. I do not want to say much on performance tables, again I think there are advantages and disadvantages. They are powerful but then weapons are powerful and they can do good and they can do harm. I think they can encourage better bench marking, a sense of competition, which I still think is important in a largely monopolistic system. They do enable clients, customers, citizens, whatever you want to call them, to ask questions and I think we in the public service should be prepared to provide answers to reasonable questions. On the other hand, it is quite difficult for tables to take account of external factors. The particular local social pressures are often not reflected in national performance tables and they do not very effectively measure the distance travelled by a delivery unit. It is too easy for those delivering in areas which do not suffer deprivation to be always at the top of the table and therefore feel pretty complacent, but on many occasions they are not stretching themselves. Tables can be demoralising for some because they do not reflect the pressures under which they work and they can encourage complacency in others. Of course they need to measure the things that matter and the data on which they are basing these needs to be reliable. There are advantages and disadvantages. I still believe that they have a part to play in enhancing accountability. I think they have played quite an important part in enabling people, parents not least, to ask some questions which ten, 15, 20 years ago they could not ask.

  67. That is really very, very helpful. Thank you for giving us the note too. I suspect all those issues we shall want to pursue in so far as we have got time to do that. Can I just pick up on the very last point you were talking about because of your own particular experience. I have been reading a letter that I have had from a primary school head teacher in my constituency. She is a dynamic head, came into teaching mid career, absolutely committed, all the school leadership qualifications in sight, works in a primary school in an ex-pit village with committed staff, gets brilliant OFSTED reports and then she writes "Every year we get the SATs tables published and our school is utterly demoralised again and it sets us back, all the stuff we have done during the year". How do I write back to her?
  (Sir Michael Bichard) I think you write back sympathetically. I will not preface every answer with this but Members must appreciate I no longer work in school based education, I am no longer in government, I have not been for 18 months, and therefore the answers that I give are personal answers.

  68. That is what we want.
  (Sir Michael Bichard) I would be sympathetic. I would like to think—I am not quite sure where the department is on this—that we could move to a position where league tables reflect the value added because I think it is sad that some of our really good schools operating in the most difficult circumstances do not get a chance to shine because the kids are coming from backgrounds which make it very difficult for them to deliver academically as well as some other children. I would like us to be moving towards added value, so I would rather you find out where the department is in terms of that because there is work going on.

  69. We have been talking about value added for years and years and yet we still have the crude league tables.
  (Sir Michael Bichard) I think you can have both. I am not suggesting that value added should take over entirely but I would like to see some value added statistics reflected. It does take a long time to get to that point because you need a long reliable run of data and, of course, until the early 1990s we were not keeping data because people said you could not measure what really mattered in education. The thing that one has to say to head teachers sympathetically but firmly is that for a very long time parents and others with an interest in the system had no way of asking questions about performance of the school. It is difficult in those circumstances but I think heads need to be robust in answering those questions. I know how difficult it is but if I were her I would be seeking over a period of time to get the press and the community to fully understand the pressures that she is facing so when the results came out particularly the press were covering it in a mature and responsible way. Locally I think that is possible, local press tend to support local schools and are more likely to attack government and attack the fact that there are performance tables. I do not think it is a lost cause in trying to develop an understanding locally of the pressures under which you are working and the value that you are adding and the progress that you are making. I am sure that head over a period of time has made progress and she should be putting that into the public domain as well.

  70. Thank you for that. I will try a letter of that kind.
  (Sir Michael Bichard) Give her my regards but preferably not my mobile number!

  71. I am interested in what you said about the Employment Service and basically the cheating around targets. We have had the recent report through the Guardian of the cheating around SATs. Is it the case that if you have a target regime cheating is endemic to it, or is it just the case, as you said in your opening remarks, that we need better policing?
  (Sir Michael Bichard) Human nature is human nature and I think there will be some people with a large organisation who will look to find ways of manipulating, if not cheating, targets and therefore you do need to have systems in place which ensure, in so far as is possible, that is extremely difficult and you are checking up on it. I do not think there need to be sophisticated audit checks but people need to know that checks are being made. Nothing comes without risk, as I said at the beginning, so there are risks. I do not think it is inevitable but sometimes we have not put in place all the systems which are sufficient so we have ourselves to blame. I think it can be policed adequately.

  72. Let me ask one last thing before I hand over. When I read you over the years and I listen to you today, a sub-text—not a sub-text, a text—a text always is that there are people around government who do not really understand how organisations work, they have never really done it. I suspect that you have got your eye on some of the young scribblers in Number 10 and you have probably got your eye on the Treasury. When you wrote about this some time ago you were talking about the PSAs, and of course that is code for the Treasury, and you said "PSAs are an irrelevance to the best managed departments and no more than an irritant to the rest".
  (Sir Michael Bichard) I think they were, I do not know what has happened in the current round, which is where I am not as helpful as you would want me to be. Let me cover some of those points. I have not complained about the "scribblers", as you put it, at Number 10. I always worked pretty well with them and I think they are high quality people, it is often a question about getting them involved at an early enough stage. I do not complain about that. What I do complain about very firmly is that I do not think there are enough people at the centre of departments who understand the issues that we are talking about today. I do not believe that they have sufficient sensitivity and experience of operational delivery, for example, to be able to set targets of the kind that I have been talking about. Looking back on it, it looks to me rather like a holding company which is almost entirely populated with people who have never actually managed on the ground and that is quite a dangerous situation. It is really the centre of departments—I am sure that all of this has changed dramatically over the last 18 months since I last experienced it—where I have most concern. As far as the Treasury is concerned and PSAs, my concern about PSAs in their early form was that they were almost being presented as a substitute for business planning, that really all you needed was a small set of targets, they were in the PSA and you got your comprehensive spending money and then they were reviewed. Unless they were, as I have put it, dropping out of the business plan, unless you did the background work which enabled you to focus down on this small number of key targets then many of them were just cobbled together to buy off the Treasury. I do not think that was an adequate response. The way in which they were monitored thereafter was not as rigorous a system as I was suggesting in my opening statement that you should have. As I say, that may have changed but what I wanted to see in place was in every department there to be a very focused business plan from which would fall out your small number of PSA targets and your business plan would be managed, monitored rigorously within the department and the Treasury and the Cabinet Committee would monitor rigorously your performance against your PSA targets. I think a lot of the words were in place, a lot of the rhetoric was fine, but I did not find that the process often matched the rhetoric.

  Chairman: Very good, thank you.

Sir Sydney Chapman

  73. Sir Michael, if I may say so you continue to have a fascinating career. I remember you as Chief Executive of Brent at one time, I think.
  (Sir Michael Bichard) Thank you for reminding me of that, Sir Sydney.

  74. It is an area where I have the privilege to represent but not in the same borough. In 1990 you were appointed chief executive of the Benefits Agency.
  (Sir Michael Bichard) Yes.

  75. When were you appointed permanent secretary to the Department of Employment?
  (Sir Michael Bichard) Employment in 1995 and the joint department at the end of 1995.

  76. So you were not chief executive of the Benefits Agency when these 152 targets were set?
  (Sir Michael Bichard) Yes, I had 152 targets.

  77. You had 152 targets?
  (Sir Michael Bichard) Yes.

  78. They were just presented to you, were they? What I am fascinated to know from your great experience is can you tell me a little more how targets are set. If we are going to judge whether targets are a good thing or not we have got to know if it is the politicians who take the lead in setting them or the civil servants or whoever. What I am interested in is even if it is the politicians or the civil servants there must be an inbuilt incentive not to set the targets too rigorously or too high, must there not?
  (Sir Michael Bichard) I never found that a problem in what was then the DSS. The arrangement then—we are going back several years—was within the centre of the department there was a group, a unit, whose responsibility it was to both monitor the agency and negotiate with me, the agency, on targets. It was there that I felt there was a lack of capacity or a lack of understanding and therefore a desire to have as many targets as you needed to cover everything that the agency was doing. Those were then presented to politicians who would sign them off. I think politicians, secretaries of state, should be involved ultimately in agreeing those targets but it is very difficult for a secretary of state to say "actually I think we should reduce the number of targets. . .." I will leave it at that. I think one of the problems when you have got 152 targets is not just that it is difficult to focus your people on things that matter, you do lose sight of the things that matter. If you take the old DSS situation, for example, one of the key issues in managing that was the priority between accuracy of payment and speed of payment. There is a debate to be had as to what was the trade-off between speed and accuracy because the faster you made the payments the more likely it was that under an incredibly complicated system they were going to be inaccurate. It is very difficult to have that debate. There was a great drive from the centre of the department to have accuracy times which were ratcheted up every year and speed times that were ratcheted up every year because you just could not have a target that was not better than the one you had last year. It is that kind of situation that causes targets to fall into disrepute in the end, I think, because the people on the ground knew damn well that we could not deliver the income support target in five days and do it to a degree of accuracy in 95 per cent given the system that we had.

  79. Targets are begat in this unit in the department, does that unit consist entirely of civil servants or is there any political input, say the minister's special advisor or whatever, in that unit as well?
  (Sir Michael Bichard) I think in most places there would not be a special advisor involved at that stage. A special advisor might well be involved in looking at the proposal that goes to a minister and might say "this looks as if it is a reduction in performance, that is going to be a bit difficult for you", but not at the early stage of negotiation, no.

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