Examination of Witness (Questions 40-59)
RT HON MR TONY BLAIR, MP
TUESDAY 16 JULY 2002
40. But are you getting out from central control? The Comprehensive Spending Review announced yesterday had new demanding performance targets for every secondary school in the country. There are three new inspectorates announced for health, housing and crime. All this suggests that the centre is actually controlling even more in its desire to improve public services, not decentralising to the people who actually deliver.
(Mr Blair) No, I would not accept that. First of all, these so-called new inspectorates, things like the Housing Inspectorate, will be unifying existing bodies. Secondly, in relation to the targets, I think it is important that if we are spending large sums of additional money, people want to know how that money is spent and that it is going to deliver a result in the end, but how that result is delivered, there is in fact substantial devolution happening. We are devolving more of the schools budget to the average school than ever before. By 2004, as I was saying a moment or two ago, 75 per cent of National Health Service spending will go through the primary care trusts. We have started the process for the first time of getting money directly down to schools so that your average secondary school is going to be getting over a period of three years £1/2 million or, in the more challenging areas, £1 million to spend as they want. Now, no government has ever done that before, so I think there is more to do in this area, but the basic principles of public service reform really are these: national standards and frameworks of accountability and inspection; then local devolution as far as possible to the front-line; greater flexibility in terms and conditions of employment, which is why we have new doctors' contracts, new consultants' contracts and so on, new ways of teaching and all the rest of it; and choice and contestability. Now, as we have put in place the national standards and a framework of inspection, then it is possible for us to take the centre out of the equation, particularly when a public service is performing well. So I am not disagreeing with you, that there is a tension between the centre and the locality, but we are adjusting that in the light of the reforms we are making.
41. How would you respond, for example, to Martin Wolf in the FT this morning, commenting on the Comprehensive Spending Review, where he said, "I am sceptical whether central targets, centrally monitored delivery and reliance upon demand-and-control mechanisms will work. I am equally doubtful whether these approaches can be combined with genuine decentralisation". This is exactly the tension we are talking about, is it not?
(Mr Blair) It is.
42. My view is that from what I can see in the Bills which are passing through Parliament, the Police Reform Bill, the Education Bill, and others, the control mechanisms you have set up, with ten Ministers shadowing ten particular police forces, for example, all that smacks of being very heavy-handed centralisation and that is what teachers and policemen are saying. For example, the Chief Constable of Lincolnshire was saying, "We are in danger of sinking under a sea of targets and measures". Is that not exactly the danger?
(Mr Blair) Well, I do not accept that because I think yes, there is a balance you have to get right, but, on the other hand, if you are spending very large sums of money, then I think the public expects to see outcomes for those sums of money. You cannot simply be in a situation of saying, "Well, here's the cash. Do whatever you want with it".
43. Do you think Martin Wolf is right to say it is not a good way to spend the money?
(Mr Blair) Well, I do not agree with that either. I think where I disagree with Martin Wolf is that that is not all we are doing. If all we were doing was just giving some money to them and saying, "Right, here's your target, that is it", but we are not. We are changing the structure within which these organisations work, so that, for example, as I say, for schools now there is a greater devolution of their budget, there is also greater flexibility, which is one of the things in the Education Bill, as to how they hire their staff and the types of staff that they hire, and we are introducing mechanisms within the Health Service of contestability and choice for the first time. Now, if you are a heart patient and you are waiting more than six months you will have the choice to go elsewhere to get your operation. We are introducing the samepiloting itin London. These are changes and reformsthe opening up, for example, in the health service of diagnostic and treatment centres, where we are bringing in outside providerswhich go far beyond the mere setting of a target. I think they are important. The reform of the criminal justice system, so that the whole basis upon which the police and the criminal justice system works, has changed in order to make it more helpful, to convicting the guilty. These are big reforms too. So I do not doubt that there will be issues in relation to bureaucracy and tension between the centre and the locality, but I think if you were to talk to most peopleand I spend a lot of my time talking to front-line staff in the health service, in the schools and in the policesure, there are always the frustrations you get with a reform programme, but on the other hand I think that most of them accept that policy is moving in the right direction.
44. Good morning, Prime Minister. Do the ambitious plans announced yesterday, £100 billion, mean that by the time of the next election if public services are not improved you will have no excuses?
(Mr Blair) I think if public services do not improve by the time of the next election people will hold us heavily to account.
45. Will these proposals survive a slump? They will survive the ups and downs of the Stock Market but will they survive a slump?
(Mr Blair) Yes, because they are based on the most cautious assumptions. I think the record of the last five years shows that those assumptions have been well made.
46. These are very vast sums and most people have little or no idea of what they mean. How will people notice?
(Mr Blair) They will notice in two ways, I think. First of all, if you take my own constituency, I cannot think of a single primary school in my constituency that does not have something to show for the investment of the past few years. I look at my secondary schools now, becoming specialist schools and investing in new equipmentwhether they are specialist art schools or specialist sport schoolsthere is major investment going in. I think of the new community hospital being built just on the outskirts of Sedgefield village (done under PFI, which may be controversial but, nonetheless, it is a new building taking shape). I think they will notice it in their local communities. The second thing, to go back to the point that John was making about targets (and that is one of the reasons why it is important to set targets), is that they will be able to say we have either met them or we have not. We have got challenging targets in relation, for example, to the health service that, by the end of 2005, there will be no one waiting for more than six months. That is a massive change, and it is going to require a lot of work to do, but that is the judgment they will make.
47. During Gordon Brown's speech yesterday he announced 130 additional targets added to the 300-odd targets that have already been announced in the 1998 Comprehensive Spending Review. However, his Spending Review paper yesterday stated, paragraph 130: "New resources must be matched with performance to deliver results, in which the modernisation of public services is crucial". That is a very bland statement and Parliament does not have sufficient information to analyse these targets and to track them. How are you going to help Parliament in that?
(Mr Blair) I think the basic targets that the Government has, people know. For example, in the health service we set out very, very detailed targets as to what we have got to achieve. If we do not achieve them people will be sitting there saying "You have not done it".
48. What I am saying to you, Prime Minister, is that there is insufficient information coming from the Treasury to Select Committees in order for us to analyse these targets. That is the issue.
(Mr Blair) I was not aware that that was a particular problem, but I am very happy to look at it if you tell me that it is.
49. Can I look at the issue of productivity. That is one of the central elements of this Government's programme, and I know that you and the Chancellor have been very keen on that. In the last four or five years productivity measures have been very disappointing. We see that the public sector in the past four years increased their productivity by 17 per cent, but the private sector increased it by 25 per cent. So we need an urgent step change in productivity in the public sector. However, given these new proposals which will probably add another half-a-million people into the public sector, I do not see how they can achieve those radical and necessary improvements in productivity in the public sector, and they run the risk of crowding-out the private sector and of competitiveness internationally and domestically.
(Mr Blair) I think we have got to take different steps in relation to different public services. If you take the health service, there are two problems with the National Health Service. One is capacity and the other is the systems within which they work. If we take capacity as a problem, capacity is actually about the numbers of people. We do not have enough nurses, doctors and consultants. Occasionally we do not have enough ancillary workers. So I do not think it is wrong to be increasing capacity. Where I think you are absolutely right is that we have to be driving up productivity at the same time. All I would say to you there is that if you look, for example, at out-patient waiting lists, which we were pretty heavily challenged on in our first term of government, as a result of a whole series of structural changes that have been made, and modernisation within the health service, those have come down pretty dramatically. So that you have now got a situation that whereas in 1997 I think there were just over 70,000 people at any one time waiting over six months for an out-patient appointment, today the figure is a few hundred. That is where the extra staff have been used to raise the productivity. I do not disagree with you; I think this is a major question for us over the next few years, as to how we get more productivity out of the additional staff that we are using. However, I do think that in certain services, particularly health but additionally, I would say, in teachingclassroom assistantswe have increased the number of support staff in schools by something like 80,000. I think if you talk to most schools they would say that is necessary. I was in a class the other day myself where the classroom assistant was absolutely vital in helping the teacher. You can measure this in productivity, and there is a challenge for us to do more there, but I also believe there are certain gaps in the staffing that we do need to fill, and if we do not fill them then our public service achievements will be at risk.
50. Is it not the case, Prime Minister, that this Government has in many ways increased people's expectations and now there is an insatiable demand? How are you going to deal with that? How are you going to explain to people that it actually does take a long time, that it is a step change and we all must work together, rather than saying "Overnight we are achieving Valhalla"?
(Mr Blair) I think that is a very good point and it is a problem, because if you are not careful every time you announcethis comes back to something I said earlierextra money for the health service people turn up at the doctor's surgery the next morning and say "Where is it? We want it now and we want all the things it is supposed to buy". I think the way that you manage expectations is, in part, through publishing detailed plans, which we have done, for example, on the health servicethe ten-year plan. We have called it deliberately a ten-year plan because it is going to take ten years. It is not going to happen overnight. Secondly, if I can go back to the issue of targets, that is one way in which you say to people "This is what we are saying we can do by this date." If we look, for example, at the levels of the targets in schools, we are not saying we can get everyone up to the right standard in two or three years' time; we are saying that there is a step change but it takes place bit by bit by bit. That is where I think that the targets, in fact, do have a role to play in helping to manage those expectations, though I agree with you it is a big problem.
51. Lastly, Prime Minister, adding to what John Horam was saying about the Public Service Agreements and targets, can you name a department or a programme that has missed its targets and been punished or a department or programme which has achieved its targets and got more? Yesterday Gordon Brown said that he was going to come down with a thunderous rage on those who missed it. Can you give us specific examples? If you cannot, is it not useless if you cannot?
(Mr Blair) Let me give you a couple of examples of where we recognised that we had to do more and introduce change and where we have, I think, reasonably successfully succeeded and tried to build on that. The first is in relation to the Ministry of Agriculture, where we did not achieve the targets we wanted to achieve, and we actually re-fashioned the whole department, which I think was important and necessary. I think that department is working far better now than it was before. One of the things that the Office of Public Service Reform did was work out a change programme with that department, bringing in new people and reorganising the way it worked in order to make it more effective. Then, I would say, by contrast if you look at the Department of Work and Pensions, I think our record on getting people off benefit and into work is a good one. A lot of people came off long-term unemployment. I met somebody yesterday who had been unemployed for six years on the basis that they were disabled and, as a result of the New Deal for the Disabled, he is now working and working extremely well. That is someone who had no chances before and has got a chance now. What have we done to build on that? What we have done to build on it is to put the Department of Work and Pensions togetherre-fashion thatrather than the old Department of Social Security, and one of the most important things we are doing as a Government is in relation to Job Centre Plus and the merging of employment and benefit offices. I saw it myself the other day, when I went into one of these new Job Centre Plus offices. It is like going to see a bank manager. It is not like someone behind a screen, filling in your benefit form and getting you out of the way as quickly as possible; it is someone sitting down with you and saying "Look, these are the issues that we can help you deal with. Instead of paying you benefit let the first question be `What can you do? What do you think you need in terms of skills to get back into work?'" So, I agree with you, there is no point in doing this unless the bad is dealt with and the good is rewarded, but I think there are examples there.
52. David Hinchliffe, who is Chair of Health, was due to ask the next questions but he was called home at short notice last night. He left two questions which are related, which I will put to you, if I may. The first is that departments draw up policies with nothing in their mind about the health impact of those particular policies. Take, for example, the drawing up of the National Curriculumsport and physical education were squeezed in pursuit of the academic subjects. The partial upshot of that is that we now have obesity amongst children which, of course, is going to cost us a lot in the future, in health terms. Is there any emerging awareness in Government of the need for a joined-up approach, a coherent approach, to a public health strategy?
(Mr Blair) There is, I believe, nowto deal with the very issue you were mentioning, which was sport in schoolsa programme worked out between the Department of Education and the Department for Culture in order to make sure that we significantly increase school sport, and that will meanI think I am right in saying75 per cent of children in the next couple of years should get at least two hours of sport a week and there will be increased facilities. For example, this summer there is a whole series of programmes being run in parts of the inner cities, particularly for the more disadvantaged children, to come along and participate in sports programmes. I think the general point is well taken; there is a general failure, I would say, for all Governments to try and recognise the read-across from one department to another. It is amazing how quickly, in government, departments get into their own silos and stay there. So I do not disagree that there is a general issue, but we are trying to tackle that.
53. A previous Health Committee did make a recommendation that every department should be required to draw up a Public Service Agreement which requires it to conduct a health audit. Is this something you would be willing to consider?
(Mr Blair) I think you have to look at what the implications arein particular, if I can say so, Mr Chairman, as we were talking about bureaucracy a moment or two ago, as to what that would actually mean on the ground. The other thing, if I can say this very honestly to you, is that one of the things I have learnt in five years of Government is that there is always a danger that a problem pops up, you set up some piece of machinery and before you know where you are it is spewing out vast numbers of directives, guidance and all the rest of it and some poor so-and-so down at the ground has to make sense of it all. Perhaps I can come back to you, or David, with a more considered answer on that specific point, but I would not like to commit myself there.
Chairman: That would be helpful.
54. Prime Minister, I was also chairman of the Health Select Committee for five years and have maintained, obviously, a continuing interest in health. Over the past five years your Government claims to be investing many extra billions of pounds in the National Health Service but the facts reveal that capacity is not increasing noticeably. I would give you an example. The overwhelming majority of new hospitals are, in fact, replacement facilities. Another example, where new equipment is purchasedcancer scannersjust creates bottlenecks because people can be diagnosed but then the capacity is not there actually to treat them. Waiting lists are beginning to rise again, as you have already noted, up 11,000 last month. You will be aware of the Kings Fund, which is an independent body with experts on health, and they stated in their five-year health-check in April this year: "Recent increases in patient and day care activity have been surprisingly small, averaging around 2 per cent a year since 1997-98 but in 2000-01 only increasing by 0.8 per cent. This is certainly too low to do much more than stand still, given demand pressures, let along reduce the number of people waiting over six months." Prime Minister, although there has been a substantial increase in funding, why is this not translating into marked patient improvements, bearing in mind you are now in your sixth year in government?
(Mr Blair) The Kings Fund report is an interesting place to start because I think you will also find that the Kings Fund report said there had been considerable progress made in the health service. Virtually every independent report that is done on the health service at the moment says what I think is the truth, that there are real improvements taking place but there is a long way to go. The difficulty is that you tend only to get the second part of the sentence read out, not the first part. If you take, for example, the hospital building programme, yes it is true they are often replacing other hospitals but they are far more effective and efficient in treating people. It is the case, too, that if we look at capacity within the health service, additional numbers of nurses, doctors and consultants are happening. If we look at cancer treatment, I think the most recent reports on cancer indicate that we are beginning to improve significantly the treatment of people with cancer. When we came to office, I think, 67 per cent of people were seen within two weeks if they were suspected of having cancer and it is now 95 per cent. The extra equipment, of course, is far more effective equipment. I have seen some for myself in a hospital the other day, which treats people far more quickly than before. If we look at the health service waiting lists, I think I am right in saying that apart from one small indicator every single waiting list for the health service, in- or out-patient, is in better shape than in 1997. That is not to say there is not a long way to go because there is a long way to go, but there are real improvements being made. It is an interesting thing about the health service, but if you actually ask people whether they are satisfied with their own treatment within the health service very large numbers of people will say "Yes". I think the problem we have had in the health service, to be honest about it, is a capacity problem, which has meant that access to the health service is difficult, so people have to wait too long for operations or wait too long when they are in accident and emergency departments. The only alternative is for a long period of time to increase the investment. Again, I think it is terribly important that we explain this properly. People sometimes say that we have been in five years, we have had all this extra money in the health service, what is it all coming to? The fact of the matter is that yes, we have been in power five years but for the first two or three years we were very tough on spending; we had to be because we had high levels of debt and we had to get the public finances under control. It is really only in the last couple of years that money has started to come to the front line and we need to keep this up year on year, to bring our levels of spending up roughly to the European average. That we will do. I think you will find that in the coming couple of years people do recognise the considerable improvements on the ground. Sure, there is still a great deal to do, but I think it would be a mistake to say that nothing has happened. Interestingly, when the Modernisation Agency did its report a short time ago (and that has the BMA, the Royal College of Nursingpeople, as you know, who can be pretty sceptical about the achievements of any government) they had exactly the same take, that there is a lot of improvement but there is a long way to go.
Mrs Roe: Prime Minister, I wonder if I could just focus on the Government's structural ability to spend money wisely. I would like to talk about social care, which I think is an example of this. The fact that there are separate budgets for the National Health Service care and that provided by local authorities often resultsas I am sure you are awarein patients falling down between the gaps. You will also be aware of the collapse in the number of care home places47,000 since 1997and that has, of course, resulted in a high incidence of bed-blocking. There are currently, I think, over 5,000 beds blocked at any one time, with 40 per cent of these being blocked by the same patient for over a month. This must have a cascade effect back through the health servicecancelled operations, for example, have risen from 50,000 in 1997 to 81,000 in 2001-02.
Chairman: Can we have a question please?
55. Can I put to you: are you ready to consider altering the funding system for social care? Do you accept that the problem in social care for the elderly is, effectively, silting up the National Health Service?
(Mr Blair) I accept entirely there is a real problem here but, first of all, we should get the facts accurate on this. It is correct that there are just over 5,000 delayed dischargesbed-blocking, in other words. I think when we came to power it was just over 6,000, so it has reduced not increased. It is a serious problem. Are we thinking of structural change for social care? Yes. One of the things that we are proposing, as part of the reforms, we have given social services a very significant increasesome 6 per cent in real termsbut what we are saying is that with that money social services are going to have the responsibility of making sure that someone is properly placed, and their money will be dependent on that. That is a system that they have in Sweden, which has been highly successful and we would like to introduce that here. We are also trying to get far better co-operation between social services and hospital trusts locally. So there is no doubt at all that it is a problem and, yes, it is true also there have been some more cancelled operations, although remember, too, that there are over half-a-million more operations happening a year. Also, what is important to realise is that the actual average waiting time for operations is coming down and not going up.
56. Prime Minister, a quick question. You earlier referred to the fact that we have not got enough doctors, nurses and ancillary workers. You also told us about your look at the primary care trusts. When you were considering that huge new budget, did you look at making better use of the herbalists, acupuncturists and homeopaths in the health service, who are largely now working in the private sector? I say this at a time when more and more of the public want access to these therapists and at a time when it is policy to use private health care beds. Do you not think that it is time to make better use of the 50,000 practitioners out there?
(Mr Blair) I have to say we did not devote an enormous amount of time to it, but, on the other hand, it is a perfectly serious issue. There are a lot of people who want to use herbal or alternative medicines. I am not sure what the answer to it is because, at the moment, it is very much, as you say, done in the private sector. I do not know that we gain a lot by trying to bring it all in-house, as it were. I am perfectly happy to have a look at the recommendations that others have made on that. So thank you for that.
57. Prime Minister, if special advisers do not make policy why did you ask Lord Birt of the Forward Strategy Unit to look at the future of transport?
(Mr Blair) Because I think it is a good idea to have lots of different people from outside who can give you interesting insights and ideas.
58. If Lord Birt's work, as it did, costs the department quite a lot of money (between £50,000 and £100,000) and he came out with a suggestion that we should have a bigger road building programme, do you think that is a sensible contribution?
(Mr Blair) I actually do believe that. I am afraid I think that we are going to have to disagree about this. John Birt comes in and works unpaid as an adviser; he is not brought in as an expert on transport, or any other subject. He is brought in as someone who will look at the entire system and give you interesting and good insights, which he does. He did this particularly in relation to crime before he looked at transport. It is absolutely correct, you could perfectly easily say to me that all the information was there in the Home Office, but he collected and put it together in a way that, I thought, brought insight.
59. The present Secretary of State, who you have emphasised, quite rightly, is responsible, has said that he does not think there is a lot of support for a country-wide programme of more motorway building. Would you think that was right?
(Mr Blair) It is probably correct that there is not. The transport policy of the Government is set out in the ten-year transport plan, but I just think that sometimes we should not think that the only insights that can ever be delivered are either by experts or politicians; I sometimes think they can come in from people from the outside who can make a useful contribution.