Select Committee on Education and Skills Minutes of Evidence


Examination of Witnesses (Questions 1 - 19)

WEDNESDAY 26 JUNE 2002

MR DAVID NORMINGTON AND DR RUTH THOMPSON

Chairman

  1. It is a great pleasure to welcome the Permanent Secretary, David Normington, and the Director of Finance at the Department, Ruth Thompson, to our proceedings. It is something of a large gap, in terms of our meeting formally, Mr Normington; we last met you, as the old Education and Employment Select Committee, when Michael Bichard did his swan-song performance, and you came as the new boy. But you have had plenty of time to play yourself into the Department now; so that is our excuse for not seeing you earlier. Would you like to make something of a brief opening statement, either or both of you?

  (Mr Normington) I do not think I have a great deal to say, and I am sure you will be wanting to ask how we have been getting on in our first year, and how I have been getting on. If I could say just two things. I am quite pleased by the balance-sheet that is in the Departmental Report, in Table 1, there is a statement of how we have been performing against all our targets; we have not met all of them, we are not going to meet all of them, but the balance-sheet is very positive, and, in the end, I think, that is how we have to be judged. The Government sets those objectives, and we are meeting them; so I am proud of that. I think there are quite a lot of things I am pleased about, in terms of the way in which the Department has been developing in the last year, but maybe we will come on to some of those.
  (Dr Thompson) I have nothing to add, thank you very much.

  2. Does not that rather reflect the situation out there in the real world, in schools, that there is some very real, encouraging performance and improvement of performance, but there are bits of your Department that I would not touch with a bargepole. In fact, when we did our Individual Learning Accounts, there was a whole track record of not learning from past experience, fundamental mistakes that we thought occurred, in terms of the contractual agreement you had with Capita. But would you find that offensive, that I described bits of your Department that I would not touch with a bargepole?
  (Mr Normington) I am very dismayed by what happened on Individual Learning Accounts. I think it has highlighted some problems with the way in which we manage major bits of policy, and the way in which we manage contractors, and so on; and I think your Report highlights those very clearly, and we accept a lot of those things. I hope that that is not reflecting what the Department is like. I have to ensure though that those lessons are learned, to make sure that that is not happening anywhere else, and I am clear that that is one of the downsides of this year.

  3. But you do not find it offensive that I would describe bits of your Department in that way?
  (Mr Normington) No, I do not.

  4. Thank you, Mr Normington. Can we move on to one or two other issues, regarding the general direction of the Department. In one sense, you took over a pretty good ship, when you took over from Michael Bichard, your predecessor. Things looked good, here you have a Government, it could not be better, really, as a Permanent Secretary, could it, that was committed to the three Es, there was a Prime Minister and a Chancellor of the Exchequer extremely interested in educational performance, and there has been an enormous amount of money flowing into education, your Annual Report highlights that. But that is not the feeling that people have on the ground. As we call witnesses, as we attend annual conferences, as we visit schools, there is a feeling out there that that large amount of money is not trickling down in a way that one would expect from the figures; how do you explain that?
  (Mr Normington) I cannot wholly explain it. I hear exactly the same, and I know for a fact that at the top of this funnel there is a large amount of money going in, and it is increasing by over 7 per cent, if you are looking at the schools budget. It is increasing year on year. In the last two years there have been annual increases, of over 7 per cent, in terms of per pupil funding. I think part of it is that that is an average figure, at national level we are talking average figures. The range, in terms of the increase in local authority budgets on education around that 7 per cent figure, it is actually 7.4, is somewhere between just over 3 and 10; and, of course, that is why in some places the pressure is on, and in some places it is not, and you will always hear, of course, from the people whose budgets feel under greatest pressure. So that is some of it. I think there are some other issues about the way in which the money comes to them and whether they feel they have the ability to move it round and spend it on the things they want. We have made a big series of changes in the last two years, in that direction, actually to give schools more ability to move the money around, but they are still nervous that they do not have that ability, and they are still, even after several years of increasing funding, lacking in confidence that the money will keep flowing. That causes them to put some money in their reserves, it causes them to be anxious about the demands on their spending. A third thing is, there are a lot of demands on schools, and I am talking about schools but it could apply to other areas too, there are a lot of demands on schools. The main cost, in most of the business I deal with, is the people, and people sometimes come quite expensive, and it is very difficult to get rid of them quickly, and therefore you cannot make quick adjustments in your budgets. And I think all our institutions, universities, FE colleges, schools, probably feel that.

  5. My colleagues will want to come back to that issue; but can I ask you one other thing, before the questions are broadened. In terms of your job description, when you walked into your first day as Permanent Secretary, presumably you had a job description; how does that job description differ from and how does it complement, or how does it work with, the job description of the Secretary of State? What is the dividing line, what sorts of things do you do that she does not do, and vice versa?
  (Mr Normington) I am her chief adviser on policy, and she decides. I am the one who tries to convert that policy into effective implementation. I am the one who takes decisions about the way the Department is run and organised, in order to deliver the Government's policies. That is true, but it does not tell the whole story. Those lines have to be blurred, because, at the top, the Secretary of State and I have to work very closely together on all those issues, because if she is not happy with the way in which policy is being implemented, or the effectiveness of one bit of the Department, I will talk to her about that, we will talk about the causes of that, and I will then go away and try to put it right. But there are some clear dividing lines, but you have to work it out at the top.

  6. I am very interested in management, and so you would say you were the general manager of the Department, the chief executive?
  (Mr Normington) Yes, in terms of the management of the Department. I think the Secretary of State would say that too, and would hold me to account for that.

  7. But she can interfere with the management process when she likes?
  (Mr Normington) She does not interfere, in that sense. She does, actually, talk to me about whether the Department is working, whether we have got the right people in, whether they are providing the right service; she gives me all that feedback, and she suggests, from her perspective, where things are not going right. If that is interference, it is interference, but it is a legitimate role for her, because, in the end, she is accountable to Parliament and to the public for what we do, and if the Department is not working, of course, she must take an interest in that, but she holds me to account for that, me and my Management Board. But if it is not working she will, if you want to use the word `interfere', yes, of course, she will interfere, because she will want to know that things are being put right.

  8. What does she do, the day after she reads the article, I think in the TES, that a very high percentage of your staff were unhappy with their managers?
  (Mr Normington) We have not had that discussion yet, we are going to have that discussion; because that comes from our staff survey. I am very happy for everyone to see our staff survey, because I am really proud of it, actually. A lot of the performance in the staff survey has gone up, a lot of the perception of how the Department is managed has gone up, but they do not believe it is anything to do with me, or my senior management team; which, after a year, I will just about settle for. The messages from the staff are, "We need you to be more visible, in leading this Department;" but they are also saying, "But a lot of the other things about the Department are significantly more positive than the last time we did the survey." And, in the end, I will judge the Department by that. I have promised the Secretary of State a discussion about the results of that survey, and I am happy to be quite open about the staff's perception of our management skills and our leadership skills; by the way, they have improved, but they have improved from a low base to a base which is a little higher.

  9. Are you getting the right quality of people coming into the Civil Service? One hears, in the educational press, in higher education, more and more young people only want to go into where they can earn the highest amount of money, often the City is mentioned as the preferred destination. Are we getting the quality coming into the higher-ranking levels of the Civil Service and going through the system; are we getting the right sort of quality, or are we getting rather second-best people coming into the Civil Service now, in your Department?
  (Mr Normington) There are two answers to that. At the junior levels, recruitment is very buoyant, people want to come and work for us. Years ago, because I used to do graduate recruitment, people did not put the Education Department down as one of their priority areas; now they do, and I think that reflects the profile we have and the impact we are making. Also, in the last year, of course, I have been recruiting to my senior team from outside the Civil Service. My replacement as Director-General for Schools came from a local authority, he was the chief executive of a local authority, and before that a chief education officer and a teacher; and my new Director-General of Lifelong Learning was the principal of a college. I am absolutely delighted with those appointments; it suggests to me you can recruit some of the best people out there in the education world, and they have strengthened my team immeasurably. I think probably Michael Bichard would say that that was one bit of luck I had had.

  Chairman: I cannot imagine why a boy from Bradford Grammar School could have described himself as a Martian to any of his staff.

Jeff Ennis

  10. Looking at last year's restructuring of Government Departments, Mr Normington, given your extensive background in employment, you must have been personally disappointed that the old Department was broken up; is that not true to say?
  (Mr Normington) A little; but you live with Machinery of Government changes, it is part of the job, I think. The Prime Minister decides it. I was pleased about two things. One, I was pleased to be the Permanent Secretary; and, secondly, the way in which the dividing line was drawn, when Employment was taken away, preserved in the Department for Education and Skills a very coherent set of responsibilities. If the dividing line had been drawn further back, in the Skills area, and had recreated the divide we had had pre-1995, I think that would have been a really retrograde step. A lot of the gains we made in 1995 were preserved really in the Lifelong Learning area. So, a little disappointed, but it is life, really, I got on with it.

  11. Did you play any part or any role in where the dividing lines were eventually drawn up?
  (Mr Normington) Yes, sort of; in the sense that the Prime Minister had signalled to us during the election campaign that if he were re-elected he was likely to make this change, and I and my counterpart in the DSS worked on a set of propositions, which were then put to the Prime Minister when he came back into office. It was then his decision but I was able to have that influence, and I was fortunate in that regard, that we had about two and a half weeks to do that work, and, in fact, it was one of the first things I did when I came into my job. In fact, I was Permanent Secretary at the Department for Education and Employment for two and a half weeks.

  12. So there was agreement between the two Permanent Secretaries there?
  (Mr Normington) Yes, and we were working with the Cabinet Secretary, who, of course, is the person who advises the Prime Minister, at that point.

  13. What do you perceive to be the advantages in the new Department, in the new structure, as opposed to the old structure, and are there any disadvantages?
  (Mr Normington) The advantage is in the coherence of it. The agenda does fit together; unlike some other Government Departments, there are not a lot of things that are sort of attached to us but do not really fit. It is a very coherent set of responsibilities, which enables us to focus on the agenda for Education and Skills very precisely. In that staff survey I mentioned, 91 per cent of our staff are very clear what the purpose of the Department is and know how their work relates to it; only 3 per cent say they are not, and I am looking out for them. That is a very, very high number, and I think that is partly because of the work we have done, but partly because people are very clear what our main responsibilities and purposes are. So I think the coherence is there. I think that the only downside I would want to highlight is a managerial one, in that the loss of the Employment Service, which was a very important part of the Department for Education and Employment, takes away from us a lot of operational experience, and a pool of staff there that we used to bring into our head office. People who knew about operations and delivery. And we have an understanding still with the Department for Work and Pensions that we will share staff; and one of the advantages to us of that is that we hope to be able to attract some of those people with very good operational skills into our head office.

  14. Would it be true to say, under the old Department, that staff employed in the Employment division, felt that they were a part of a Cinderella service, if you like, compared with Education, and is that one of the reasons why it was transferred over?
  (Mr Normington) I do not think that was why it was transferred over. I think it was transferred over because of the priority the Government was giving to the sort of whole Welfare to Work agenda really. I think some of what you say is true. The Department for Education and Skills has some of the same issue, in that people think we are just about schools; that is what takes 75 per cent, maybe 90 per cent, of the press attention, and certainly quite a lot of the attention within Government, and one has to work to make sure that people in other parts do not feel that somehow they are second-class citizens. I think, if you look back over a lot of years in the Department for Education, the schools area has always seemed like the premier league.

Chairman

  15. But is not the new Cinderella the Skills bit of your Department? We hear very little about Skills in the Department, and there seems to be one unholy mess going on between what seems to be the demise of these National Training Organisations and their replacement, or possible replacement, by the Sector Skills Councils?
  (Mr Normington) Sometimes it may seem that the Skills issues do not have so much profile outside; they have a lot of profile inside, it is just that you do not get much noticed for them. I think that the aim behind the transfer from the National Training Organisations to the Sector Skills Councils was intended to be a stepping up of the importance of sector training bodies. The National Training Organisations, it was felt, were very variable in quality; the aim is to create some much more powerful sector skills bodies which can be a counterbalance to what is a very strong element in our policies, which is regional and area based, and traditionally there has been much more emphasis in Skills on delivering through area bodies, and there has not been enough emphasis on the needs of key sectors of the economy. And that is what the change is about. As part of my attempt to signal how important this is, I have agreed to be on the Board of the Sector Skills Development Agency myself, so that nobody thinks that senior management are not taking that just as seriously as everything else.

  16. No, but the Minister who identified with that big process, John Healey, has now gone, after 11½ months; well what does that say to the morale of the Department?
  (Mr Normington) There is a very good Minister in his place, is there not, who is going to give it a lot of priority as well.

  17. But do you not find it frustrating; you have had a couple of Ministers in 11½ months, off they go, they have just played themselves out of a job, they have been there less time than you, and off they go? And this Committee is not very happy at the news that we are hearing, that there was going to be announced a replacement to Individual Learning Accounts very soon, within a couple of weeks, but with a change of Minister it may not happen until the new Parliamentary session. That is very frustrating, when this Committee has asked very clearly for an early replacement?
  (Mr Normington) Obviously, the Prime Minister reshuffles Ministers; for me, that goes with the job too, and I do not think perhaps I ought to comment on that. If you want me to talk about Individual Learning Accounts, I can talk about that. We have already said we are going to replace the ILA1 scheme. It is very important to me, as the Head of the Department, that we do not announce the successor scheme until we are sure that we have a properly-designed scheme and that we can run it effectively. I am anxious about rushing into an announcement myself. I am quite glad that Ministers have decided not to, until we are absolutely sure we have in place a successor scheme.

  18. It has been a three or four months' delay, on something that we have pressed that this should be—and it is frustrating, when one clearly hears the Minister was going to make an announcement imminently, he goes, and for some reason, just because of a change of Junior Minister, that is going to be delayed by three or four months?
  (Mr Normington) I think he has taken a look at it, with the Secretary of State, and they have decided that we do not yet have an assurance that we can run a successor scheme, and we do not have all the pieces in place, and until we do we should not announce it. And I am comfortable with that, because, as Accounting Officer, I am very clear that we must not repeat the mistakes that we made. The whole story is very frustrating, it is very frustrating that a really good idea, which was working, has been so damaged. We have a lot of work still to do to make sure the replacement scheme is effective and works; we really cannot afford to repeat those problems, your own Report actually says that.

  Chairman: Thank you, Mr Normington. I want to move to spending on education.

Mr Chaytor

  19. Over the last five years, Mr Normington, there has been a significant shift in the patterns of spending, and, basically, schools have gained to a very large extent, and higher education has lost significantly. How do you measure the effect of that, in terms of the educational outputs, what processes do you have in the Department to monitor the effect of those increases and decreases in spending?
  (Mr Normington) There are two things going on. In each area, we have very clear targets and output measures, and, obviously, we have very clear measures of inputs, which are not just about the total amounts going in but are also about unit costs; and, in a sense, in each sector, we are looking to see what outputs we are getting for the money we are putting in, and we have pretty good performance measures in quite a lot of our areas. I think, in the higher education area, they have been improving, but they have been lagging behind a bit, in terms of their improvement.


 
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