THURSDAY 18 OCTOBER 2001
__________
Members present:
Tony Wright, in the Chair
Kevin Brennan 
Annette Brooke
Mr David Heyes
Mr Ian Liddell-Grainger
Mr Anthony Steen
Mr John Lyons
Mr Gordon Prentice
Mr Michael Trend
Brian White
Mr Anthony D Wright
__________
Memorandum submitted by the Cabinet Office
Examination of Witnesses
THE RT HON JOHN PRESCOTT, Member of Parliament, Deputy Prime Minister and First 
Secretary of State, LORD MACDONALD OF TRADESTON, CBE, Minister for the 
Cabinet Office and Chancellor of the Duchy of Lancaster, and MAVIS McDONALD, 
Permanent Secretary of the Cabinet Office, examined.

	Chairman

1.   On behalf of the Committee could I welcome our witnesses this afternoon, Deputy Prime 
Minister, Minister for the Cabinet Office, Permanent Secretary of the Cabinet Office.  Thank you 
very much all for coming along.  It is in the nature of the Cabinet Office, even more so now since 
the recent reorganisation, that you range wide and I suspect the Committee will want to range 
fairly wide in its questioning to you, but I am sure you are prepared for that.  Do any or all of you 
want to say anything by way of introduction?


(Mr Prescott) Yes please.  I think I took your warning on The Today programme, Mr 
Chairman, that you do range wide.  We have been in the job for four months and we will try to 
give you the best answers to your questions.  I would like to thank the Committee for inviting us 
here to set out our role in the Cabinet Office and to discuss our contribution to the delivery of the 
Government's key objectives.  You have a memorandum which sets out the detail of that but 
there are just one or two points I would like to make, if you would allow me.  The Prime Minister 
has, indeed, made it clear since the election that the Government's key priority for this term is to 
deliver world-class public services, built around the four key principles which again are set out 
in the memorandum.  That indeed is no small task.  I think anybody looking at the particular 
problems involved would agree with that.  To succeed needs the commitment of everyone and 
indeed a strategic dirction from the centre of government which I think your earlier report, 
Chairman, pointed out. The Prime Minister too was concious of the need to make changes at the 
centre and through the creation of my Office of the Deputy Prime Minister and the restructuring 
of the Cabinet Office, we believe we are better placed to help ensure that all departments deliver 
on those key priorities and objectives which the Prime Minister has set for us.  I have looked 
carefully at the Committee's Seventh Report.  Indeed, only being in office for only four months 
in this particular job I have had a valuable insight into the kind of problems that we face coming 
new into these matters.  You did raise a number of interesting points about the role of the centre 
and to Lord Macdonald and I with only four months in the job, it gives us an invaluable insight 
into the challenges. I hope you will agree that the changes we have made so far in that limited 
time have strengthened the centre and met some of your concerns.  We have strengthened the 
government offices in the regions.  We are bringing them under the Cabinet Office to help that 
co-ordination and delivery.  The Delivery Unit will be focusing on improved outcomes not just 
outputs, another recommendation that you made in your report, and we look to develop better 
public services.  You were also concerned about the centralisation of government and, indeed, 
I have always felt you should decentralise it, being an advocate of regional government.  It is one 
of the responsibilities I have got at present to bring in more decentralisation although I hope the 
work on regional governance in the coming White Paper we will address ourselves directly to 
that concern of your Committee.  In my role as the Deputy Prime Minister I hope - I leave it to 
you to make the judgment - you have the powerful Cabinet Minister for which this Committee 
called to help in the direction and delivery of those services.  The responsibilities that the Prime 
Minister has asked Lord Macdonald and myself to undertake have a major role to play in 
delivering those priorties, but for my part I have a number of other tasks, again set out in detail 
in the memorandum.  Principally, I support and deputise for the Prime Minister at home and 
abroad and I help to oversee the delivery of the Government's key priorities. I am assisted in 
doing so by the chairmanship of a number of key Cabinet committees that I hold but I also have 
a number of specific responsibilities.  These include social exclusion - and you have been 
complimentary about the work of the Social Exclusion Unit - regional governance and the role 
I continue to play in the international climate negotiations representing the Prime Minister.  
Indeed, yesterday I  returned from a visit to Russian and the Ukraine where not only did I discuss 
on behalf of the Prime Minister a number of bilateral issues, but also how we may develop the 
global action, not only against terrorism but how we can deal with the coming UN conference, 
the Global Summit, next January, and I think that is quite an important part for Britain to play. 
 I discussed that with the Presidents and Prime Ministers of those countries.  Where cross-cutting 
issues arise which are of interest to both Gus and I we work closely to ensure a co-ordinated 
outcome.  I know the Committee is also interested in how we work with the rest of government. 
We work of course very much in a role of partnership and the Cabinet Office is there to support 
and assist departments in achieving successful delivery of services.  It will work with these 
departments to set out the framework for delivery and it will provide strategic direction and 
evaluate and monitor success. Finally, chair, the Cabinet Office has been significantly 
strengthened in order to play its part in all of this.  In addition to the staff in the Government 
Offices our London staff are in many different buildings.  We will reinforce our efforts to create 
a stronger centre by bringing as many as possible of the London staff together in nearby locations 
next summer.  These are the main points I wanted to make.  They are in detail in the 
memorandum.  I am grateful to you for allowing me to make that statement and now we are at 
your convenience.
2.   That is very helpful, thank you very much indeed for that. Perhaps I could just tell you 
that the Committee has said that it wants to spend a short time at the beginning exploring with 
you some of the recent events that you were referring to obliquely at the beginning and then we 
can move on in the remaining time to the main business.  Could I just begin by asking you about 
this.  Lord Macdonald; when you were asked about the Jo Moore business in the Lords earlier 
this week you referred to it, as many people have done, as a "serious error of judgment".  Could 
I put it to you that what  many people feel is that is precisely what it was not, that it was gross 
professional misconduct.  It was an attitude that was reflected, not a judgment of one course as 
against another.  It displayed an approach to the job which was inconsistent with any notion of 
public service.  Is that not the point?
(Lord Macdonald of Tradeston) I think the Prime Minister made it very clear yesterday just 
how abhorrent he felt some aspects of that statement were. I do not think you could have asked 
for a more abject apology than we got from Jo Moore and it seems to me that the Prime 
Minister's key phrase was he did not think that an individual's whole career might be destroyed 
for one error of judgment, no matter how horrible or distasteful that error of judgment might be. 
 I understand, of course, that the Secretary of State did reprimand Jo Moore and indeed formal 
action was taken by the Permanent Secretary and it is now for that Department, I think, to decide 
what the course of action is next in terms of Jo Moore.  I think the Prime Minister has made it 
very clear that he backs the judgment of his Secretary of State.

3.   With respect, I think that answer would work if it was an error of judgment we were 
talking about.  If it is something else then it probably does not because if I look at the model 
contract for special advisers, again issued in September, just last month, it could not be clearer. 
It says: "Your employment requires performance consistent with the high standards expected of 
senior members of the Civil Service".  On any test surely that test has not been passed?
(Lord Macdonald of Tradeston) That is right, but I think the question is should someone be 
sacked for any transgression of a contract, and that is surely a judgment that has been made by 
the Secretary of State, by the Permanent Secretary and now by the Prime Minister.
4.   We are talking about someone who only lives as an appendage of a Minister, a political 
appointee whose career in that sense expires with a Minister anyway.  So it is not a normal career 
pattern.  Let me put this to you or perhaps to Mr Prescott.  If a Minister had done this C
(Mr Prescott) --- Not unknown for Ministers C
5.   --- Would the Minister still be in the job?
(Mr Prescott) The issue about an adviser not a Minister.  You may argue that the Minister 
has reprimanded the individual and has decided that it is not a sufficient case for sacking, which 
is the view taken by the Secretary of State in this case and, indeed, the Prime Minister.  It is an 
error of judgment of the worst kind, "stupid action" I think it has been described as, and I 
certainly feel that is so, but it is one for which she has apologised, for which she has been 
reprimanded and the Prime Minister now as head of the Civil Service has made it clear that he 
did not think it was a sackable offence.
6.   Had it been your special adviser, you would have taken the same view?
(Mr Prescott) I think all of us who are in ministerial positions and have employees who are 
special advisers have to arrive at their own judgment, and in this case it was the judgment of 
Stephen Byers.  The Prime Minister has looked at the matter, the Permanent Secretary was 
involved in it, there have been reprimands, apologies made, and I think in those circumstances 
we have to accept that it is not, in the view of those people, a sackable offence and I have nothing 
more to add to that.
7.   Is her position still tenable?  Can she still do her job?

(Mr Prescott) That is always a consideration when somebody makes an error of judgment, 
however bad that error is and the one who employs him, and  employees is what special advisers 
are, and they were not advising me in this case; the special adviser was advising this Secretary 
of State and he has to make a judgment.  He has made the judgment, she has apologised, and  the 
Prime Minister nor the Secretary of State that it is a sackable offence.  Frankly, it does not rate 
against all the other problems we are dealing with, does it?
8.   You do not think it turns on trust in government?
(Mr Prescott) I think it turns on trust between the individuals involved certainly because they 
are better placed to make an judgment as to whether this was an error of a more permanent kind 
or one that they slipped into and had not taken fully into account, and they have made a  
judgment.  I am bound to say that if the same criteria were placed on the House of Commons 
none of us would be in there very long, would we? Nevertheless, it is a judgment that that 
individual has to make and they have made it.  I hope if I am placed in such circumstances I will 
make my judgment and I hope the people might agree with it.  But I do not know until the event 
occurs and you would not ask me to comment on it.
9.   If it turned out that the individual concerned, as has been alleged, had been asking a 
senior civil servant to do things which it was improper for a senior civil servant to be asked to 
do, would that change things?
(Mr Prescott) I have heard it alleged.  I hear a lot of allegations in the papers.   If I had to act 
on every one of them I would be in a considerable amount of difficulty with time.  No-one has 
made an official complaint, as I understand it, on this matter and where there has been a 
disagreement about the matter of judgment in this case it has been dealt with by the Permanent 
Secretary and the Secretary of State.
10.   But if it turned out to be the case, whether a complaint had been made or not, then 
the question.

(Mr Prescott) It does make a difference if a complaint has been made.  At the moment it is 
down to the level of allegations.  Have you spoken to the individual as to whether a complaint 
has been made or have you read it in the paper?
11.   I am asking you.
(Mr Prescott) I am sorry, the substance of the allegation has to be important if you are asking 
me to comment on something like that.  Until that is justified I do not think it is fair to continue 
the discussion based on an allegation as a means of extending the questioning about Jo Moore 
and the action of Stephen Byers.
12.   Let us remove it from the individual.
(Mr Prescott) I got the impression it was very much about the individual and in fact special 
advisers are individuals.  Not every one acts in the same way and we are dealing with one 
particular act.
13.   As you say, we do not know the facts.  If we remove this individual case as 
alleged, can I ask the general question - and I point to the terms of the special advisers' code - and 
say if any  special adviser were found to be prevailing upon civil servants to do things it was 
quite improper to ask them to do, what consequences would flow from that?

(Mr Prescott) If it is improper for them to do it - and there certainly are cases and that is 
envisaged in the Code to which you refer - there are means by which you deal with that.  There 
are different disciplinary measures, for example it would certainly involve the Cabinet Secretary 
who said to your Committee here when you dealt with this in your inquiry that he would have 
a responsibility to address himself to that.  At the moment it is the Secretary of State who has 
dealt with the circumstances as he has seen them..  If it is worse than that presumably there would 
be a responsibility for others.  As I understand it, you have the Cabinet Secretary coming here 
in a week or ten days' time and you will be able to address him on that.   Can I tell you also that 
 hopefully by then we will have our response to your Committee.  I would like to offer my 
apologies that perhaps it has been longer than normal.  I do not want to plead special 
circumstances but I will do all I can while I am in the job to see there is no further delay in 
responding to your Committee.

	Mr Trend
14.   Was the Cabinet Secretary involved in the present matter, in the Jo Moore matter? 
 Was he consulted?  Did he or anyone else require an apology to be made?  How does that work?
(Mr Prescott) I have been away for two or three days but, as far as I understand it, it was not 
referred to him because the matter was dealt with internally by the Permanent Secretary who is, 
of course, connected very much with the Cabinet Secretary, and whether there was a conversation 
between them, I do not know, but the matter was dealt with in a professional manner and she was 
reprimanded by the civil servant involved in this case which was the Permanent Secretary.
15.   Perhaps Lord Macdonald knows, was this matter referred to the Cabinet 
Secretary?
(Lord Macdonald of Tradeston) It is the practice in both the public and private sector that any 
complaints from staff are handled as matters of strictest confidence by  the department concerned 
and that would be the proper procedure.  Sir Richard does not propose to hold a separate 
investigation. He believes that this has been handled in accordance with the proper procedures 
in the employing department which is the DTLR.
16.   In some sense you have overall responsibility for the special advisers and this 
matter must have been referred to you at some stage?
(Lord Macdonald of Tradeston) It has not been referred to me.
17.   Do you know whether Miss Moore made the apology of her own volition or was 
she required to do so?
(Lord Macdonald of Tradeston) No, I do not.
18.   Mr Prescott?

(Mr Prescott) It is a matter of record if I believe what I read in the paper. I see also that she 
appeared before him, he reprimanded her, you must know that as well as I do, and I take it as his 
admittance that he did reprimand her.  I think he has made statements also to the House to that 
effect.

	Kevin Brennan
19.   Could I ask a slightly more general question about the Code of Conduct perhaps 
in the light of the events that have taken place recently.  Are you confident that the Code of 
Conduct is fully understood now by Ministers and special advisers and if that is the case I notice 
that within the Code of Conduct one of the duties that the special adviser is given as one of their 
major responsibilities  Code of Conduct is "devilling for the Minister".  What exactly does that 
mean and could that sort of phrase within the Code of Conduct perhaps have led to a 
misunderstanding in this case of what the duties of the special adviser are?
(Mr Prescott) I have got some sympathy with the question.  I certainly approached it the same 
way enquiring what was meant by "devilling", but no doubt our journalists will tell us tomorrow! 
In those circumstances, I think the rules are clear about honesty, about integrity, about not 
directing civil servants, about what those limits are.  Special advisers are political appointees, 
albeit they are civil servants.  I think the Code makes that clear. What we are concerned about 
is can anyone direct a civil servant to do something improper?  No, it is in the Code, and if they 
do then they face very  serious penalties.

	Mr Lyons
20.   Can I go back to the question of the reprimand from the Permanent Secretary.  
Was that the outcome of a disciplinary hearing, a formal charge against Miss Moore?

(Mr Prescott) I am not too sure about that.  I shall certainly bring it to the attention of the 
Secretary of the Cabinet who will be here before you and perhaps will tell you the detail of how 
the Civil Service machinery dealt with it.  As I understand it, it was not a complaint..  I think it 
might have been referred perhaps by the Secretary of State himself.  I am not exactly sure about 
that. Whatever the process, she appeared before the Permanent Secretary and was reprimanded 
for her action.

	Mr Liddell-Grainger
21.   I want to bring you back to this - and we do not know the full circumstances - the 
circumstances were that there was an e-mail C
(Mr Prescott) I was referring to the other allegation.
22.   The allegation is that an e-mail went out.  I believe that there are 81 special 
advisers.  Do you not think it is time - because this is going to happen again, I suspect, human 
nature being as it is - that it was tightened up and the entire relationship of special advisers to 
Ministers and civil servants is debated on the floor of the House and we have a proper debate to 
take this forward?
(Mr Prescott) I know that is a concern of this Committee, indeed I think it is one of your 
recommendations, and it is one of the responses we want to give to you. But I am glad that at 
least you are generous enough to say there can be errors of judgment, and in this case there was. 
The rule did not make any difference and in fact was not taken into account when the decision 
was made.
23.   Is the answer that you would like to see it debated formally?
(Mr Prescott) It is open to anybody to have debates and I think when we get the response to 
the Code we will have opened up that debate and, as I understand it, we wish to include it into 
Civil Service legislation which will be put out to consultation and will be debated, so no doubt 
a debate will come and perhaps we will all benefit from that.

	Annette Brooke
24.   If I could return to the departure of the senior civil servant to another  department. 
 What I am not quite clear about is how you know there has not been a breach of the Code of 
Conduct in that, as far as you are indicating, I believe up until today there has not been a senior 
investigation and yet there is certainly a lot in the press about it.  I think this is a matter of 
concern.  You said there is not a formal allegation  but surely for there to be confidence in the 
future of this particular senior adviser, this matter does merit some investigation, so that you can 
categorically say there has been no breach of the Code of Conduct?
(Mr Prescott) If there is no complaint and we read the allegation in the press by an unknown 
source are you saying that we should investigate it?
25.   It is a matter of serious public concern.
(Mr Prescott) Would you be satisfied with that approach? It is a serious matter, and she has 
apologised for it. It is clearly getting a lot of attention in the press.
26.   There are two issues which have come to light.  I am referring to the one that we 
do not know very much about.
(Mr Prescott) Is that the possible direction of civil servants to do something improper?
27.   Exactly and I think that is very worrying potentially, certainly to me as a 
newcomer, if that has happened behind the scenes.  If you could assure me that somebody fairly 
senior has carried out a full investigation to see there was no breach of the Code of Conduct, then 
I could sit back and feel fairly comfortable but I have not heard that from you this afternoon.

(Mr Prescott) No and I do not think I can give you a proper answer to that.  I would suggest 
the chief civil servant is coming before you and you may want to ask that.  There is another 
offence which has been committed and that is leaks from inside the Department to the press, and 
I see nobody asking or demanding that there should be investigations into every one of them.  
That is not a proper answer to your question.  It is one I feel is a matter of imbalance between the 
way this matter is pursued and the way others are.  But the chief civil servant will be here before 
you and we will have produced answers to your recommendations on the Code and you will have 
another opportunity to pursue it.  If the Committee were still not satisfied, I am quite happy to 
appear before you again and give you further responses if that is the wish of the Committee.

	Chairman
28.   We are grateful for that.  I think the point of the last question was of course we 
do not know what went on, but my information from within the Civil Service is that this did 
happen and therefore it requires something to be done about it.  I think the feeling that something 
is not to be done about it does help to damage people's faith in the political system.
(Mr Prescott) I would be grateful for any information you can give me as to who gave that 
information or if you could pass on to that person that they should make the complaint, we would 
be delighted to investigate it.  The complaint has not been made by the person this is alleged to 
have happened to.
29.   We know what happens - people get moved sideways into other jobs.
(Mr Prescott) I am afraid if you are going to call in hand those pressures, I know those 
problems in all sorts of directions.  There is this great thing that everybody should be independent 
and I am not sure independency  --- I will probably get into troubled water.  The things that we 
write down that we would like to happen do not necessarily happen in the way that we would like 
them to happen.

	Mr Trend

30.   Can I return to a loose end.  It is a general point, not a specific point about the 
case.  Do you not think it would be better if these things were more transparent?  This touches 
on the whole relationship between Ministers and special advisers, the press, who they feed and 
the general public, who in an important sense have a right to know how they are being governed. 
 There has been a lot of confusion about this.  Two of the most powerful people in the country 
appear either not to have known, not to have been told, not to have discussed it, or not to have 
tried to work out exactly what happened in this case.  It may be that we need to talk to other 
people about this.  This is not good for the governance of the country or the confidence people 
have in their government.  Naturally the press are going to run away and invent - maybe not who 
can tell - all sorts of fantasies.  Is this a good  way to run a country?
(Mr Prescott) You believe that all the allegations that are made should be investigated and 
people would feel more confident about that?  I agree and I am not trying to be trivial in my 
answer, serious matters should be investigated, and any direction of a civil servant in an improper 
way is a serious matter.  If you are asking me about allegations, I have no evidence to believe that 
that is the case.  If there is, I can only point you in the direction of the appropriate authority to 
deal with it, the person who is directly responsible for all these matters in regard to the Code and 
its operation, as they are civil servants, in special circumstances admittedly, who may have 
sometimes fallen short.

	Chairman
31.   I hope you will understand that as a Committee we do have responsibility in this 
matter C
(Mr Prescott) I do not doubt that for a second.
32.   --- So we do have to keep an eye on what is going on.
(Mr Prescott) I am not surprised there are these questions.
33.   Can we now move on to look at the organisation of government at the centre 
which you described at the outset.  Could I ask you just to say in a nutshell C
(Mr Prescott) --- While all the press are leaving and we can get down to normal business.
34.   To say, as someone who has long experience of these matters, what was the 
problem at the centre of government to which the new arrangements are the remedy?

(Mr Prescott) It is a very important question and one that you spent some time in your 
Committee dealing with.  I think you made a very powerful point about government - that it is 
too centralised in this country.  That is one important thing and there should be a process for 
decentralisation, which is part of what I am dealing with in my job.  Secondly, there is the point 
that public services are not delivered as effectively and efficiently as they could be.  Not only has 
your Committee made that point but others have as well.  So there was the appointment of a 
Delivery Unit to make sure the machinery is in government to deliver - this is your point  about 
outputs in this matter - and we have made changes in that direction.  What is important of course 
is the cross-cutting activities of  government in the Social Exclusion Unit, which again your 
Committee has recommended, and is doing a particularly good piece of work.  Also  the analysis 
and work can often be done and recommendations made across department but it does not always 
get implemented, hence the need for somebody who  has a direct responsibility to do that.  I think 
as the Office of the Deputy Prime Minister - it really started with Mr Heseltine- there is a need 
(which your Committee identified) to have a strong political force inside that Cabinet Office to 
do that.  There have been other Ministers of the Cabinet as well but I think that the office I hold 
carries more weight with it by the position I have and by my relationship with the Prime Minister. 
 And the other thing which I have always felt very strongly about in government, is the fact that 
there is so much demand on the Prime Minister's time to do things, particularly if a Prime 
Minister wants his government to be successful, that could be done by his deputy and I have 
always argued that is a good role for the Office of a Deputy Prime Minister.  That is what we are 
now establishing.  We think that is important.  Indeed, the whole process of decentralisation of 
regional governments  in the White Paper, where the Cabinet Office has a special responsibility 
to develop this with the Secretary of State for transport and local government, these are the 
reasons why they are spelt out in the memorandum, and I am delighted to do that job.
35.   There is a feeling that obstetrics has come to the heart of government and it is a 
maternity unit at worst.  What I really want to know is who is "Mr Delivery"?  Is it you as Deputy 
Prime Minister?

(Mr Prescott) We are all delivering in government.  This job of delivery is very important. 
 All administrations have found perhaps that they have not been able to deliver as fast as they 
could or deliver the things they had promised. It has become quite a cardinal issue in politics and 
therefore  - certainly in the last Election - we, probably more than any other government, laid 
down what we were going to deliver, and we had better deliver or  we are going to have problems 
of a major kind.  That requires action to be taken in the way we have addressed it.  Working to 
the Prime Minister I can relieve him of some of the problems that he has and the massive 
demands on his time, especially internationally but on the domestic scene as well, and I will play 
a part in helping to deliver it.  At the end of the day this is very much the construction of how the 
Prime Minister wants his government to deliver and I am just helping him to deliver it.
36.   The reason I press this is I thought you were going to become Mr Delivery, this 
powerful Cabinet Office figure that we asked for in our report, but then I am struck by the fact 
that none of these new units, the Delivery Unit or the Office of Public Service Reform, reports 
to you.
(Mr Prescott) They do.  We work together.  Gus Macdonald is very much looking at the 
detail of the delivery of the programme.   We have people who get involved in the PSA.  You 
said that the Cabinet Office should be involved in that and it should not simply be left to the 
Treasury.  We sit on the Committee that deals with that and sets new targets.  The day-to-day 
detail of making sure the Departments' programme are generally fitted to achieve that (because 
we cannot always assume that is the case and there is plenty of evidence for that) Gus Macdonald 
deals with.  I deal with an awful lot of activities on the broader picture but Gus and I regularly 
meet, we co-ordinate.  As you are well aware, Gus Macdonald cannot appear in the Commons 
unexplained, we are accountable in Parliament, and I cannot afford to be ignorant of what Gus 
is doing.  I wish him well on that and I get on with the jobs I have got.  We think that is a more 
effective arrangement.

37.   We called for this greater strategic capacity at the centre and we need to try and 
find out if we now have it or not, or whether, in fact, we have new sorts of coordination problems 
set up by the new machinery. I am struck by people who have looked at this, for example, 
Malcolm Dean in The Guardian says, "the changes were a badly designed structure which 
broke", what he calls, "the three iron rules of effective management by unclear lines of 
accountability, confused focus and overlapping remits".  David Walker, and I speak as observer 
of these things, says that the Cabinet Office is "in a right old mess".  You can see why people 
wonder if we have sorted out the ---
(Mr Prescott) I cannot see why.  All that is is a conclusion, whether I agree with it is entirely 
another matter.  Overlapping is the very issue of cost-cutting.  You complain constantly that 
departments do not take account of other departments and yet they are cost-cutting.  I can recall 
a minister making a statement a little while ago, I shall not name the particular minister, who 
wanted a particular course of action and a change indirection of his department.  It was with 
regard to speeding cameras - I show my hand by saying that - and I had to point out to him that 
the targets then set for the Department of Transport was to  reduce accident death.  If he took all 
of the money off that and then put it in to reduce crime figures there would be a conflict, so we 
would not achieve one objective but we may achieve the other.  Our job is to make sure that 
confusion that exists does not allow it to happen, there is a cost-cutting situation.  I have a 
Cabinet Committee to work out disagreements if secretaries of state cannot work it out 
themselves.  We think we are moving in the direction to get that kind of agreement.  He 
mentioned three points, the one about confusion.  He said there was one about ---
38.   A lack of clear focus, a lack of a clear line of contact.

(Mr Prescott) I do agree when you are working in these areas it means we have to have a 
clear understanding between us about his responsible for what in the system.  In the way of 
accountability I have to be accountable on the House of Commons floor for doing it, I cannot say, 
"I am sorry, this is done by Lord McDonald", neither can he say in the House of Lords, "I am 
sorry, this is done by somebody else".  We do have this divergence of thinking, our agreement, 
our objectives but we specialise in the detail of achieving certain objectives.  In Gus Macdonald's 
case it is designing and making sure that departments with their  department delivery department 
meet the objectives we have set for ourselves.  I have other wards on decentralisation.  I would 
be activity involved in the White Paper on regions - you might say that is something that I have 
particular interest for - I want to see it delivered on a further decentralisation scheme in the 
regions.  That fits in with your argument of greater use being made of regional government and 
decentralisation, I get on with the detail of that and producing the White Paper.
Chairman: Thank you very much.  I am sure colleagues will want to explore some of the 
issues.

	Mr Steen
39.   Can I, first of all, say it is a great pleasure to have an opportunity to ask you some 
questions, I know you are going to be as helpful as you can in your answers.
(Mr Prescott) Always, Mr Steen.
40.   I am quite a simple Member of Parliament with very complicated people here. 
 I do not understand the complicated words we use.  You get a lump of money to do something, 
you argue how much money you are going to have and you have some people in your department 
who are going to see where the money goes.  If you are going to build a new railway, which I 
wish you would do, somebody has to plan it --
(Mr Prescott) That is a matter we inherited.
41.   -- somebody has to spend money on it, somebody has to buy the land.  I do not 
understand what this complication is about the delivery?
(Mr Prescott) It is too simple in one aspect, we do not decide where the money goes, that is 
a matter for the Chancellor or the Government, our job is to make sure that once the money has 
been decided and how much it is and that they have to produce a certain outcome are they going 
to do it with the machinery they have.  That is our responsibility.


42.   In your evaluation unit you were evaluating whether you were getting value for 
money?
(Mr Prescott) That is certainly a consideration.  It is also for the secretary of state when he 
negotiates the targets for a PSA target they get it has to show value for money in order to justify 
disclaim for that claim on the budget.
43.   The point I am after is this, the American Canadians have suffered from this for 
many, many years, there is a neurosis in society about value for money and evaluation, you 
always have to have somebody checking somebody is not spending too much, and so on, and you 
end up with a bureaucracy which often prevents the delivery of the very thing you want because 
there  are so many people round checking, evaluating and so on.  Have you, this is not a facetious 
question, are you ever going to see yourself evaluating the source round the actual delivery of the 
goods which is inhibiting the actual delivery because there is so much bureaucracy round it 
caused by the pressure from the media, by Members of Parliament and everybody else to actually 
see if you are getting good value for money. The result is that the on cost is enormous.
(Mr Prescott) It is difficult, I agree.  You, no doubt, like the Public Accounts Committee 
want to see that we are spending money properly and that is a proper way of checking if we are 
spending money properly.  The difficulties for delivery, to which you refer, I wonder whether 
Gus Macdonald can answer those problems, they are what they have to address them to.  We 
defeat our purpose if it is going to cost us a lot more.  That extra cost must be considered as part 
of the improvement.

(Lord Macdonald of Tradeston) I agree with the thrust of Mr Steen says.  We have to have 
a very clear focus on trying to deliver the outcome that your Parliament voted the money for.  I 
disagree with the journalist who said that we are unfocused.  In any organisation you will get 
confusion on focus but it is our job in  the delivery unit, in the particular areas of priority, to 
ensure that that focus is maintained.  That is a very tough job for any group of senior managers. 
 I have some sympathy, coming from a management background, with the Civil Service and the 
task that it faces.  Our delivery unit is made up of only 30 people but you can see that we will 
work very closely with the departments because in the end it is the departments with their 
thousands of staff who must deliver in the leadership of millions of public sector workers.  That 
is why we have try to apply the general principles of reform which came out in the early 1990s 
in the Citizens' Charter and we, again, tried to update and refocus in our four guiding principles 
which you have made reference to in your past work.  In that way I believe that we through the 
delivery unit can help the departments maintain their focus and find solutions to some of the 
particular problems.  My role is part progress chaser and reporting to the Prime Minister, it is part 
traffic cop, if you like, to stop the units bumping into one another.  As the Deputy Prime Minister 
says overlapping activities are sometimes quite useful and inevitable if you are looking for 
cost-cutting activities, there is bit of brokerage involved and there is a bit of management 
consultancy of a very  occasional kind.  It is all in an attempt to put delivery at the heart of this 
administration in a sharper way than was the case in the first four years of the previous 
administration.

	Chairman
44.   Is your sense so far, I know it is very early days, clearly you will review this as 
you go long, that you really have a structure now that is capable of doing this delivery job that 
we all know is so central?
(Lord Macdonald of Tradeston) It is too early to say given the huge magnitude of the task. 
 What I can say is that we started well in terms of relationships with the department, they have 
been very ready to meet with us and talk about possible solutions and share their problems. We 
have already established a very good working relationship with the Treasury.  We are working 
very well with the Deputy Prime Minister's units and his activity and, of course, as the Deputy 
Prime Minister says, a lot of this activity is in the end clasped together through the Cabinet 
Committees.  The Deputy Prime Minister chairs the Domestic Affairs Committee which is sitting 
there sharing the central importance in all of this, the PSX Committee chaired by the Chancellor. 
 We have bound a lot of this together quite quickly now the challenge is to see whether we  can 
deliver.

(Mr Prescott) I think the Committee properly dealt with the examination of what motivates 
Government to get best value, and we have gone through various things. Privatisation was an 
idea of getting the market to do it cheaper, it is clearly about cost.  Compulsory competitive 
tendering is another example of that.  We have used best value.  The concentration has been on 
cost, what we are trying to say once again is this argument about the quality of the service, can 
we measure quality and then can we measure it by that? That is what we are trying to do.  It has 
not been done that way before.  There are difficulties and I am ever hopeful that we will be 
successful in it.  What I am quite sure about is the pursuit of the cost way has not necessarily 
given us the best value, perhaps we should do it a different way, as, indeed, recommended in your 
own report

	Brian White
45.   I am not sure who one has the responsibility for the e-envoy.  There has been an 
OFTEL report and several reports recently which point Britain several places down the league 
table, depending which set of these tables you use.  My understanding is that the e-envoy has 
something like 100 projects under his wing.  I am just curious as to how 100 projects is  going 
to help deliver Britain to be the number one e-business within the next three months, which is 
the Prime Minister's target?
(Lord Macdonald of Tradeston) As I am sure you are aware Mr White the e-envoy reports 
to Patricia Hewitt and the DTI and they have an e-commerce minister there in Douglas 
Alexander.  My particular interest is in the e-government side of it. In the progress to date we 
have established that there are 521 central government services now and of these 42 per cent have 
been enabled for transmission on the Internet.  We have 73 per cent likely to be enabled by 2002 
and, as you know, we are hoping to achieve 100 per cent total by 2005.  My particular interest 
is in that area of e-government. The e-envoy certainly has a very big job on his hands but I can 
assure you from my short acquaintance with him in the last 4 months he is very energetic.


46.   Most of the actual projects are about e-government, there are about two or three 
about e-business.  How do those projects actually transform the way that government delivers 
services?
(Lord Macdonald of Tradeston) First of all, you obviously look at the definition of delivery 
services and what the definition of electronic delivery is.  If are you 'phoning a call centre rather 
than going on the  Internet then that would be defined as electronic delivery if they have the 
means in front of them to call up the information that is coming through to the request from the 
customer.  We have over 1,000 government websites, we are obviously trying to rationalise those 
through the deployment of UK on-line for a start.  Of course the government gateway, which 
will, as you know, it is a very secure piece of infrastructure, and I think the first of its kind in the 
world, and that will allow business to be able to transact with government in way that has not 
been the case before.  Probably most famously the ability to do your tax through, but I am assured 
by my colleagues that is not yet easy.  There is an awful lot of work to be done in some of these 
areas.  We have made a start. The government gateway appears to be one of the leaders in the 
world.  UK on-line we are trying to develop.  We are looking to create more access, as you may 
know, with the on-line centres, of which there are currently 1,500 across the country, and we are 
aiming to have 6,000 by the end of next year.
47.   One of the things that concerns me about the way public service is delivered is the 
way that we set up pilots and the tick-box mentality, I call it, the Treasury allocates the money 
so it ticks a box, the  department produces a White Paper and it ticks a box, there is project 
design pilot which is shown to ministers, it is wonderful.  That happens in one small geographical 
area, the rest of the country do not see the improvements and services and at the end of the pilot 
the people running the pilot have to run around trying to find a replacement for that project 
money. How do you get those pilots and projects into mainstream delivery across the whole 
country?

(Lord Macdonald of Tradeston) I think the office of the e-envoy is a way in which those kind 
of problems you describe are treated much more quickly and seriously than they would been in 
the past and the appointment of ministers with special responsibilities in these areas I think also 
helps in that regard.  We have tried to make sure that each department does maintain a strong 
focus of activity in this area, it has been put very high on their agendas.  I have every reason to 
hope that is being delivered.  I will confess that only four months into the job my information is 
not comprehensive and I suspect my knowledge of this area does not match your own.
48.   Can I push you on this a bit, we have a lot of people out there who are spending 
their time trying to get money to keep very valuable projects  going rather than spending money 
on delivering.  Part of that links into the PSA programme and the coming Comprehensive 
Spending Review, what are you doing in this department to make sure that whole emphasis of 
changing pilots into mainstream delivery is going to be the focus so that at the end of the four 
years of this Parliament we will have seen this delivered?
(Lord Macdonald of Tradeston) I think the next Spending Review process is due to start in 
earnest in the months ahead but that is where I think the Deputy Prime Minister, with his 
particular concern to ensure that we have more joined-up government through the Cabinet 
Committee, will be in a very special position to help.
(Mr Prescott) I do not know any more than what Gus Macdonald has said.  I would be happy 
to look at it and write back to the Committee to see if I can give you more information.  If there 
are further questions you would like to put to me either now or later I will certainly meet with 
you and discuss how we have to develop it?
49.   Can I suggest that one of the areas that you need to look at is the whole question 
of Treasury rules and the way that the public sector is divided?
(Mr Prescott) I hate Treasury rules.
50.   The government, quite rightly, moved to  resource accounting, and that was a 
major step forward, is that the end of the process or do you see further changes in the way public 
sector money is defined, what money is defined as private sector, what is public and what is a 
mixture?

(Mr Prescott) That is a very important step forward and there is a lot of work to be done on 
it.  Treasury rules, which are largely to do with financing, I always have had my arguments from 
time to time.  I think they are changing, there has probably been more changes and less treasury 
rules than we have seen before, particularly in the transport environment and local authority lots 
of changes would be made.  Of course the whole business of public/private partnership, which 
the Committee is going to be looking at as well, is a matter of further examination and will 
require resource allocation considered in a different way, it is certainly a major part of the finer 
changes in Treasury rules at present.

	Mr Wright
51.   Can I change tack a bit to go on to the regional government.  Quite rightly, Mr 
Prescott, you mentioned the fact that so much time is required of the Prime Minister and all of 
the responsibilities that come down to you ultimately, Climate Change, Cabinet Office, social 
exclusion as well, what concerns me is  the split between the government agencies of the regions, 
where you are ultimately responsible for the government offices and not the regions and the DTI 
is responsible for the RDAs.  Who is ultimately responsible at the end of the day for developing 
the policies for the regions in that scenario?

(Mr Prescott) It is a very good question because while I was wise the Secretary of State for 
the Department of Transport and the Regions I did have a responsibility to bring in the Regional 
Development Agencies. Of course it did mean that the DTI dealing with Europe had to deal with 
the grants and so, to a certain extent, there was a certain amount of cost-cutting involved and the 
regional government offices were really trying to deal with that.  I think as your report pointed 
out again they were not working very effectively.  We had a separate report which was 
commissioned by ourselves and they were not working as efficiently and effectively as they 
could.  One of the changes we have made is to get all departments involved, not all departments 
were involved, that is a major part, and the direct responsibility is to the Cabinet Office.  It is true 
that the RDAs have been passed over to the Department of Trade and Industry at the present 
time, which has been connected with grants.  This is always one of the  problems, you can put 
two or three of them together or you can put them all into one.  Frankly if we move towards a 
regional government structure I do believe those RDAs should be accountable to the regions. 
 These discussions have yet to go to the government in a White Paper presentation.  Obviously 
there will have to be central government negotiating with Europe, and that presumably, will 
remain with the Department of Trade and Industry, and we will put together the regional 
government offices and the RDA and then the existing regional assemblies at the moment, to 
which we have to ask ourselves, what is the level of democratisation that is to apply within the 
regions.  At the moment it is a little untidy but I think in the White Paper we will do something 
to tidy this up.
52.   Will one of the issues within the White Paper address possible problems between 
government, the regions and the RDAs?  I can think of an example, which I will not go into now, 
where there may well be different policies.  Ultimately the decision was taken at a higher level 
and what policy would be adopted. What would happen in the future in terms of determining 
policy for the regions, would it be ultimately yourself?

(Mr Prescott) Central government make this decision or  it will apply as a policy.  For 
example, if you want to designate a certain area in an objective one or an objective two the 
government have to negotiate in Europe, there is clearly going to be a government role.  Once 
you have decided the policy the regional government offices are there to make sure it is 
coordinated, all departments work to those objectives. Do remember the responsibility I would 
have on a White Paper is to recognise what we as a government promised, that is that we would 
have a regional government system and it would be based upon the unitary local government 
system and the people would make a decision as to whether they wanted it.  It must raise the 
possibility that some areas might vote to have such a regional government and some may not. 
 That is a commitment that we made that it would be the choice of the people for that and we 
would have to take that into account in our White Paper, that the Regional Development Agency 
have been successful.  They do take into account the regional strategic planning that we asked 
them to do and I think they have shown a lot of coherence and agreement on the policies which 
ever region they are working in, although every region is different and the balances are bound 
to be different.  As an agency working to government direction I think they work quite  well. 
Under this Cabinet Office now we can be sure that the government's policy is clear enough and 
they implement it within the regions.

	Chairman
53.   Even if we were not sure who Mr Delivery was there is no question you are Mr 
Regions now.
(Mr Prescott) That is a very point, I will be responsible with the secretary of state, my job is 
not to take over the secretary of state's job and it is important that somebody who has to work 
with secretaries of state - we may have disagreements about certain policies - with my Cabinet 
Committee role I have to try and find an agreement.  My job is not necessarily to run their role 
but in this case it has been decided that I will be responsible with Stephen Byers to prepare the 
White Paper.  I will then present it to Parliament and he then has the responsibility, once the 
policy is decided, to implement it and legislate for it.

	Annette Brooke
54.   I do apologise, I am having huge problems with the whole concept of the centre.
(Mr Prescott) Join the club
55.   I have decided I need a picture to help me.  Somebody tried to find one for me on 
the web but it is all out of date, it was a Cabinet Office organisation chart.  Before I started this 
I was  wondering if we could have the picture in due course and a line coming out of it, but then 
I think I might get a better understanding.  I do think that is really important for the future.
(Mr Prescott) Can I say to you that we will arrange for that to be done.  There is one being 
prepared and I know that the Committee evidence had a diagram.  We will do our best to provide 
you with it.

56.   That would be helpful.  I have a number of questions, I will just ask one little 
section at the moment, that is really pulling out your function and responsibility.  Again, that is 
why we need the chart since this is all about responsibility and accountability at the end of the 
day.
(Mr Prescott) People who worked with me understand it pretty well.
57.   One of my colleagues recently submitted a question for you to answer, the 
question is not important ---
(Mr Prescott) Was that Mr Oaten.
58.   Yes.  The question itself is not important.
(Mr Prescott) That was me!
59.   Not in this context. "What role was played by the new Cabinet Office Delivery 
Unit in place  of the Railtrack administration?" I thought that would have been a question you 
would have answered but in fact the reply, Mr Prescott, was...
(Mr Prescott) That is not our responsibility.
60.   The role played by the new Cabinet Officer Delivery Unit.  The answer to the 
question is being deferred to the Prime Minister.  If it was just a straightforward answer that it 
is not your responsibility that would have been the answer but the whole question is being 
referred on to the Prime Minister.  I can put this in the general but what I cannot conceive is 
exactly where you are accountable and where you are answering a question like this on the 
Cabinet Office Delivery Unit and not being answered by you?
(Mr Prescott) That is because Mr Oaten has asked the question of the Cabinet Office because 
that his responsibility in opposition.  I do not know whether the Prime Minister might say, "it is 
not my responsibility go somewhere else", we must wait and see the paper trial.  The question 
is, do we have responsibility for the administration system in Railtrack? No, why would we? That 
is the secretary of state's job and as I used to do that job I can clearly understand the resentment 
if it was being done by  somebody else other than myself as the secretary of state for transport 
who has the direct responsibility.

61.   It still does not answer my question.
(Mr Prescott) The problem is Mr Oaten rather than me.

62.   I feel that the question gets thrown on.  What I am really trying to get at are the 
bits that you definitively and my Lord Macdonald definitively answer up on within this structure, 
that is really where my question is heading.
(Mr Prescott) I tried to understand what you meant by the question.  It may well come from 
my own experience in that department, knowing that money has to be made available and 
promised to a particular body at a point in time and then at a different time, as happened in this 
case, there was some question as to whether it had to be put into administration.  We had to give 
money and did give money to Railtrack as the secretary of state.  I really cannot see now the 
Cabinet Office would be involved in a matter of delivery.  Once the money has been decided, the 
investments given and the 10 year plan decided the delivery department, and Gus Macdonald 
would be involved in seeing that we have the mechanism to make sure the outcomes we want 
from it have been achieved.  We did have a little bit of a discussion about this, we are at a 
difficulty to see  how anyone has at all any responsibility for ourselves.  If it is that we are 
delivering so it is that we should be in charge, that would take us right across government.
63.   That is the difficulty, in a sense you are so far ranging and then we come to the 
specifics and it is not your responsibility.
(Mr Prescott) I will check it out again for you and see if there is anything that I missed out 
in that response to correct.  I will send the Committee a letter

	Chairman
64.   If I have this right, I think it is not the answer but it is the question which is the 
issue and what it says about responsibility.  Why was it referred to the Prime Minister when it 
was a question about a Cabinet Office Unit.  The question that would flow out of that, we may 
get to it at some point, is the Cabinet Office now some big Prime Minister's department by 
another name?
(Mr Prescott) Is the Cabinet Office the Prime Minister's department? The Cabinet Office is 
the department of the Prime Minister at the end of day.  Am I confused about this?

65.   This is interesting.
(Mr Prescott) What we have is the Prime Minister's department in the Cabinet Office and I 
am directly  responsible to the Prime Minister and the secretary of the Cabinet has a 
responsibility to the Cabinet.
66.   There have been a lot of new units set up located in the Cabinet Office.
(Mr Prescott) At the end of day there is no doubt the mountain top is the Prime Minister.
67.   When a question is asked about these new units ---
(Mr Prescott) I precedent will try and find a proper answer to the point you are making, why 
was it accepted as a question to be given and then passed on to the Prime Minister.  I do not 
know the answer now but I will certainly do what I can to find an answer to it.

	Mr Trend
68.   I too am very confused, former members of this Committee will remember the 
organogram (sic) , it was very interesting, although there was some gaps in it, and nobody under 
the one we had the last time round.  I am pretty sure the one next time will be considerably more 
complex.  Certainly nowadays there are few people who follow matters in the Whitehall, David 
Walker, wrote a piece in The Guardian, which you will have read.

(Mr Prescott) I do not think so.
69.   I warmly recommend it to you.  He put a question, it is quite simple, "how will 
responsibility  for health care be shared between Alan Milburn and the Department of Health on 
the one hand and the thinkers of progress chasers in Number Ten in the delivery unit and the 
office of public service rapport on the other. The delivery unit reports to the Prime Minister under 
the supervision of Lord McDonald and the office Of Public Service Reform, which is located in 
the Cabinet Office, although it falls..." It seem to me to be reasonably complicated already.
(Mr Prescott) I think he has made it unnecessarily complicated, he has actually picked out 
all of the different people who have some responsibility.  The question is, how can the Cabinet 
Office or the delivery Unit play any part with the Department in delivering a better policy and 
achieving its objectives, that is not difficult, we come together, we look at the programme 
designed by the secretary of state, we then pass a view as to whether they can achieve that.  All 
this is about keeping on with the department to make sure they do not slip in the programme, that 
they do not find in the third year what they should have done in the second year.  You can write 
all of this clever stuff about who is connected to who but in reality it is very clear
70.   In reality either somebody take the credit or somebody will take the blame.
(Mr Prescott) We will know who will take the blame basically because the Secretaries of 
State have responsibility to do that.
71.   I hope they are all hearing this.

(Mr Prescott) They have the responsibility for it.  The Delivery Unit questions them about 
their programme of delivery, that is quite proper.  The reality is we know departments do not 
deliver.  In the Labour Governments and Tory Governments it has not always been 100 per cent 
delivery and all of us politicians at election time have to try to explain why it has not.  We are 
talking about equality and we are going to try and say Ahave you got a programme to deliver on?@ 
In reality the programmes and the targets are very tight to achieve.  If you do not do it in the first 
year and take the appropriate measures you will not achieve the follow up.  We have to do it.  
Therefore, we help departments but the Secretary of State is responsible.  If the Secretary of State 
presumably disagreed with the Cabinet Committee and said AI do not like the plan@, no doubt I 
would be first in having a discussion and then the Prime Minister is there if necessary.  I think 
that is a proper way of keeping pressure on departments to deliver because the evidence is they 
do not always.
72.   I understand you understand this and the people and the players in this will 
understand this.
(Mr Prescott) Mr Walker should understand this.
73.   They get up in the morning and they make sure that no-one has parked a taxi on 
their lawn and then get on with their day but in structural terms, in administrative terms, it is 
extremely difficult to understand.  Where final accountability will lie and where responsibility 
will lie has traditionally been an important matter for the Government to explain.  How big is 
your Department?  How many ministers have you got?
(Mr Prescott) As it says in the detail I have Barbara Roche, who is my Minister of State.  I 
have Chris Leslie, who is another Minister.  It is the same size as it was before.  Gus Macdonald 
is involved with us.  We now have someone dealing with equal opportunities.  I think the size 
of the Department is no bigger than it was before except in the major transfer of Government 
civil servants.  On Ministers there is not a great deal of difference.
74.   You say Gus Macdonald is connected to you, does he report to you?
(Mr Prescott) Yes, he reports to me.
75.   And to the Prime Minister?
(Mr Prescott) Yes, of course he does.
76.   In different areas for different things?
(Mr Prescott) No, on the same things he is doing because I need to know and report to you 
in Parliament what he is doing.  I cannot say ARing up Gus Macdonald@, can I?
77.   So he would report to you on Delivery Unit matters?

(Mr Prescott) Yes, of course he does.  
78.   Before he would go and see the Prime Minister?
(Mr Prescott) He has Mr Barber.  Gus will explain it.  We have to report in different ways. 
 One, the Prime Minister is hands-on, he wants to make sure it is delivered, he is very keen about 
that so he has got this unit to make sure it is delivered.  I have to answer for that.  We meet 
regularly to see how it is going and we discuss with Gus and the officials in his Delivery Unit 
whether we are achieving it, indeed I have a direct responsibility for that, and if it is not then 
perhaps have a word in one or two Secretaries of States= ears about it.
79.   I am concentrating on your Department.  How many people now do you employ? 
 Do you know how much it costs?  Who is the Accounting Officer?
(Mr Prescott) The cost is not a great deal more.  Why do we not ask the Permanent Secretary 
to deal with this.
(Mavis McDonald) I am the Accounting Officer.
80.   You are.
(Mavis McDonald) We have pretty well doubled, largely through the addition of the 
Government Offices of the Regions, since before the election.  So we are approaching 5,000 staff 
where we were something over 2,000.  These are estimates yet because we have not got the final 
resources agreed for the new structure for the remainder of the year.  In total we expect to be 
spending about ,170 million a year more on administration resource costs which is largely staff 
and capital.
81.   Are these administrative costs, the ones that are unique or the main responsibility 
of the Deputy Prime Minister, allocated to you and others allocated to No10?  I think there is a 
suspicion in some people=s minds that there is increasing confusion between what was 
traditionally No10 staff and traditionally the Cabinet Office staff.  Is the budget shared?
(Mavis McDonald) I am the Accounting Officer for all the units, including the staff at No10.
82.   A reverse takeover.

(Mavis McDonald) This is for the purposes of the formal accounting and in the Departmental 
Report we send to the Committee we give quite detailed break downs of that and I would expect 
you to see the new attributions as we get them through in supplementaries shortly.
(Mr Prescott) And the Cabinet Office has been involved in that.  I cannot remember the term, 
I think Mr Heseltine called it the dust can or something.

	Chairman
83.   Bran tub?
(Mr Prescott) Bran tub he said, yes.  Then he said that each Cabinet Office comes along and 
picks up different pieces, it has got the drugs and that goes to the Home Secretary, and you must 
make a judgment as to whether that is right or wrong.  It has been a bit of a rolling stone on 
occasions and I suppose that is a reflection of the importance that the Prime Minister has put to 
things.  Somebody was saying to me the other day AYou have got to make sure science is in 
No10", I said AWhy should it be in No10", AIt used to be before@.  It has picked a lot of things up 
and we all have to be judged on the actions we take and what that balance is and we are 
presenting to you today our balance.
84.   Just as a matter of fact, perhaps to the Accounting Officer, it would be the case, 
would it not, that No10 has invented these new units, it happens to have located them in the 
Cabinet Office?
(Mavis McDonald) Yes.
85.   They will not count as an expansion of No10 because they will count as an 
expansion of the Cabinet Office, is that right?
(Mavis McDonald) The whole account is published as one account for No10 and the Cabinet 
Office.  If we are negotiating with the Treasury for resourcing in the Spending Review then we 
are negotiating for the whole lot together.
86.   In terms of numbers of staff, numbers of staff will be counted as having expanded 
in the Cabinet Office despite the fact that these units are working to No10 in fact.

(Mavis McDonald) I think it will be quite clear where staff are located.  They are located in 
the Cabinet Office, some of the heads of the unit work through the Cabinet Office through 
Ministers to No10.  Some of the units are based in No10, not in the Cabinet Office.
87.   It is not a question of whether it is good or bad but we are trying to get an account 
of it.
(Mavis McDonald) We have been spending some time bringing units in and sending units out 
and setting up the new units.  We have also redistributed some of the work that was going on 
before to fit in to  the new agenda and the new units.  That is why we have taken a little time to 
produce the organisation chart and update our website.  We should have that for you very, very 
shortly.
88.   We look forward to that.
(Mr Prescott) And it could be easily identified.

	Mr Trend
89.   Is it possible that before the Secretary of the Cabinet comes to us we could have 
the order  because last time there was a great delay and it was irritating to both of us?
(Mr Prescott) I am interested to hear there was a delay before.  It is just total hell, all of these 
things, because everyone is concerned about their position on it.
90.   Exactly.

(Lord Macdonald of Tradeston) To help Mr Trend and his definition of the Delivery Unit, 
as the Deputy Prime Minister said earlier his responsibilities are broad and strategic; mine are 
very specific with the Delivery Unit with day to day oversight of, as I say, 30 people working to 
the Prime Minister who holds regular stock takes with the Secretaries of State, at which we are 
present.  We report regularly to the Prime Minister on how his priorities are progressing, whether 
they have been achieved or not.  We also try to offer some solutions to specific problems as they 
emerge or to identify those problems.  In looking to bring those solutions forward of course I 
work very closely with the Deputy Prime Minister and try to ensure that the other units inside the 
Cabinet Office, many of whom I have got no formal association with, try to use their efforts to 
bring us the solutions that are needed in the four priority areas of health, education, transport and 
crime.
91.   But why is it not sufficient for the guy in the Treasury to do this as part of the PSA 
exercise?
(Lord Macdonald of Tradeston) We work very closely with the Treasury but they have got 
160 PSAs so their public sector teams obviously have a very wide spread of responsibility across 
Government.  What the Prime Minister has said is that there are particularly challenging areas, 
not necessarily more important but more challenging, on which this Delivery Unit will 
concentrate.  My day to day business is to report as regularly as necessary to the Prime Minister 
on what is going on there and to ensure that the Treasury also understand what difficulties might 
be emerging.  I think you will find if you have the opportunity to talk to any Treasury officials 
that they will now see that we are able to dive under the surface of problems in a way that would 
not be possible for their units with such a broad sweep of responsibility.

	Mr Prentice
92.   Can I stick with this Delivery Unit business.  I think there are two imperatives 
driving the Labour Government and they may be contradictory.  One is to modernise structures, 
let us take the Health Service, and the other is to deliver outcomes.  At the moment there is huge 
upheaval in the Health Service.  If I just look at my own area in Lancashire, we have got a new 
Primary Care Trust, we have got the merging of two NHS trusts, my own one and the one 
covering Jack Straw=s constituency, we have got the creation of a new Mental Health Trust in 
Lancashire and we have the abolition of the East Lancashire Health Authority.  That is one of the 
16 health authorities in the north-west which have been collapsed down to three.  And we have 
got all the changes on patient representations, CHCs and so on.  I just wonder if it is possible to 
deliver the outcome that the Government wants to see at a time of massive organisational 
change?

(Lord Macdonald of Tradeston) We are looking at a perspective of four or five years for this 
Parliament and inevitably at a time of change there will be distractions clearly for the people 
involved.  But by changing the structures, of course, you might judge it much more likely that 
you will deliver the outcomes that you need for the patients, for the customers there.  That is a 
decision that has clearly been taken in a number of areas, many of them, of course, having gone 
through as Acts of Parliament.  I accept that, of course, there are difficult times in prospect for 
those in the process of change.  I accept too that it is our job to try to reduce the complexity by 
ensuring that one of the principles of public life is to try and put as much of the responsibility 
down to the front line as is possible.  We can have national frameworks for accountability and 
performance but the Prime Minister is very insistent in trying to get the responsibilities down to 
the front line, as we have done quite successfully in schools for instance.  Those are the priorities 
that we are pursuing, not just for the Delivery Unit but, for instance, the Regulatory Impact Unit 
has been working and trying to strip out red tape from elements of the Health Service as well as 
the Police as well as the educational establishments.  We want to try to focus all of the activities 
of these various groups on these key concerns which are the four priority areas.
93.   You are much more than just progress chasers obviously.  I am interested in the 
relationship between the Delivery Unit and individual Departments.
(Mr Prescott) Reform.
94.   Reform, yes.  What we have been talking about is whether the Departments 
respond to the Delivery Unit initiative or whether you sit down with the Departments and work 
out what is possible jointly.

(Mr Prescott) I think this is an extremely important point.  If I look at New Deal for 
Communities I get the similarity of all these Departments= programmes and our job is how can 
you bring them together to deliver and focus on one area, whether it is health or the New Deal 
for Communities.  This is a real problem for us in delivery, I do not think there is any doubt about 
it.  That is why the Prime Minister often mentions reform is necessary for the delivery.  You 
cannot just provide the money, it is the outcomes we are talking about and are they just simply 
money in and then they will deal with it.  All the evidence shows that it is not.  I must say in 
some of the evidence we have got returning where we have been measuring the outputs and 
seeing how we have done on the outcomes we have seen an improvement.  I think it was done 
in teachers, was it not?  It was done in teenage pregnancy.  It is this cross-cutting how we get to 
achieve it.  We will not achieve all those targets unless we can achieve that interface and the 
reform.  That is what we are very much trying to do.  At the end of the day though if we find that 
you cannot deliver it ---- Let me perhaps give you an example which always struck me as right 
for us to do what we are doing without perhaps giving an indication of Ministers involved.  We 
had a particular programme for something and we said that should be done.  I will not get into 
all the controversial areas about it.  We set it on our cards, I went round the country and then we 
found that the Department did not think that was an important priority and we did not discover 
that until 18 months in and that is the first period of a government.  I think the Department 
probably had the best side of the argument in this.  We had made it a commitment and at the end 
of the day they just were not delivering it.  If we do not know that earlier than 18 months before 
we are going to have real problems about delivery.  It may argue that is not the right one you 
should have been promising, and I am sure there are many arguments, but we learn from 
experience that perhaps targeting was not done properly to begin with, perhaps we have got to 
change it if we want to be successful.  I have no doubt the question that has been posed by 
yourself, how we reform delivery, how we actually perhaps lift the burden of too many 
commitments in too many areas and indeed be focussed on what we really want from people is 
something that this Committee has always been concerned about and we have got to be as 
concerned about the delivery and the reform of it if we are to achieve those targets.  

	Mr Steen
95.   This is in relation to one of the points Gus Macdonald just mentioned about the 
Regulatory Unit.  Something which I have majored on for many years is deregulation.  You 
mentioned the Regulatory Unit as trying to tackle red tape.  The reality is that the Deregulation 
Select Committee, of which I am also a Member, has only deregulated in three areas since Labour 
came to office.  That is on dancing, you can dance more in this country, you can drink more at 
different times and you can gamble more.  Those are the three deregulatory areas which the 
Government has been successful on.  I would like to compliment you on that, we have a much 
happier society.
(Mr Prescott) As a drinking, dancing Member of Parliament.
96.   There is a real problem about deregulation, that it just is not happening - just is 
not happening.  You as an industrialist must realise that what the Tories did was the easy bit.  We 
deregulated and really we repealed by secondary legislation.  We repealed things that would take 
ages to go through the Commons and the Lords and we found a new device.  As far as lifting the 
burden, and I know the Deputy Prime Minister has been interested in this as long as I have, it is 
not happening because society is getting more and more complicated, there are more rules and 
regulations coming out of Europe, and I am on the European Select Committee as well.  I just 
think the reality is very different from the window dressing.  If you have got 5,000 staff in the 
Department I say to myself Athere is the start of the deregulation, cut that to 50".  That would be 
your start of deregulation.  The best way to deregulate is to cut the number of staff because they 
then cannot enforce.
(Mr Prescott) That happened in your previous administration and you ended up with more 
regulations than you started with and less staff.

	Chairman
97.   When we had Michael Heseltine in front of us one day in the last Parliament, I 
may not have the words exactly right, he said something like AI did not believe a word of it 
anyway@.
(Mr Prescott) I am in that school, I am sorry to disappoint you.
(Lord Macdonald of Tradeston) In reply to Mr Steen, I was indeed one of those businessmen 
called before Mr Heseltine and I took what he said very seriously at that time.  I had no doubt that 
his intention was to slash away at red tape and I am sure it is an aspiration of every government. 
 We are perhaps more worldly now in realising just what a difficult job it is.  
(Mr Prescott) It did not help in the food industry.
(Lord Macdonald of Tradeston) There may be some trends that will help us.  Chris Haskins 
and his Task Force are doing good work.  Lord Haskins believes, for instance, that the amount 
of regulation coming out of Europe will now lessen considerably that we are through a particular 
phase there.  I think too we should not underestimate the commitment that this Government has 
given to it.  As you say, we brought in the reform which offered the Regulatory Reform Orders 
and I hope that Parliament will be as eager as we are to see those processed efficiently because 
I think that is an important new route for changing legislation quickly.  I have got a panel for 
regulatory accountability which calls Ministers to account for their Departments= regulatory 
performance.  We have got plans requested from every Department so that we can make an 
assessment of whether they are trying hard enough on this front and there is a Minister for 
Regulatory Reform in every Department.  I can assure you that the Prime Minister is more 
passionate about it than even I remember Michael Heseltine being.  I think he means every word 
of it.

	Mr Steen
98.   The real test is if you want to dance more, if you want to drink more, if you want 
to gamble more, thank Labour, but anything more has not actually happened.  I want to come 
back to why and that is hygiene, because every time you want to make something cleaner 
everybody says Alet us pass a new regulation and a new rule@, so there are hygiene regulations 
coming out from everywhere, and yet, in spite of that, there have been more incidents of food 
poisoning everywhere than ever before.  Then safety: as a result of the current world security you 
cannot stop safety regulations coming out, there will be more safety regulations, and security, 
there is no limit to the amount of regulations on security.  What I am saying is we ought to be 
honest and your unit ought to say Alook, we are not going to succeed on this, it is like King 
Canute, they are coming out from every angle, hygiene, safety, security@.
(Mr Prescott) Europe.  Most of it comes from Europe.
Brian White: The Committee has actually asked for the Minister to come to the Regulatory 
Reform Committee.  You were not there on Monday.
Chairman: I feel a speech coming on, Anthony.
Mr Steen: I have finished it.
Chairman: We have heard it before and it is a very good speech.

	Mr Lyons
99.   Can I come back to the Delivery Unit and regional government.  Who will make 
the assessment about whether the regional government objectives have been met in some way?

(Mr Prescott) Our view is that regional government will lead to a much more efficient and 
effective way of delivering public services through the process of decentralisation.  I suppose you 
can make a judgment if you look at Scotland or Wales whether they have achieved that because 
that is a matter of devolution.  Our judgment would be, therefore, in delivering services as we 
have at the moment because most of the agencies are local authorities who deliver in most of our 
processes.  
100.   I am referring particularly to the establishment of regional government.
(Mr Prescott) How would we know it is delivered?  I think what motivates most on regional 
government is democratising many of the decisions that are taken by various quangos.  I know 
you had a report on quangos.  We have seen in the north-east, for example, various bodies and 
partnerships put together.  Just in the north-east alone there are about 134 without any 
accountability whatsoever.  The question about regional government is also about 
democratisation as well as decentralisation and that is an important question for us.  You may 
argue is that the more efficient way to do it and if it is more democratic, and we can have 
arguments about that, but the political principle is very clear.  What we have to do in the White 
Paper is look to a framework of what is the regional dimension which are many strategic 
functions which the London Authority has here and allow that to be accountable in the regions. 
 Yes, it is motivated by efficiency and effectiveness but it is also motivated by the democratic 
concern of having many of these decisions that affect the regions decided sometimes by regional 
officers but within a democratic framework.
101.   Would the Delivery Unit want to see some progress on regional government by 
the end of this?
(Mr Prescott) I do not think it is the same as local government.  This is a very important 
question as to what its function is.  Is it to have executive powers or is it giving advice on 
strategic functions, whether it is housing, transport, planning, all very important issues.  On 
balance, therefore, you will be judged upon what executive function you will have and that is 
right at the  heart of what kind of local government structure you want fitting within that regional 
government.

(Lord Macdonald of Tradeston) If I could clarify.  The Delivery Unit is, as I say, only 13 
people working on these four particular challenging areas.  The delivery in health, education, 
crime, transport, of course has that very important local dimension.  That is why it is very 
important that the Delivery Unit has to liaise very closely with the Deputy Prime Minister and 
the people for whom he is responsible because he has got the overarching responsibility, 
therefore, of delivery.  The Delivery Unit is separate from that, Mr Lyons, I am just making that 
clear distinction now.  We would want to work with the Deputy Prime Minister=s unit to know 
what was coming through from local government level.  For instance, they have now got Public 
Service Agreements like central government but the Regional Communications Unit works 
closely with our people to keep us well informed of what is going on at local level.
(Mr Prescott) That is the Government Offices acting to implement those programmes really.
102.   It is a subjective science to some extent, delivery, depending on where you are. 
 Who will objectively stand by and make an assessment of whether something is being delivered 
or not?
(Mr Prescott) Let us say if you are going to send so many doctors or there is going to be an 
improvement of health, those kinds of things, that can be measured quite easily.  On the regional 
one, which I think is the response, it has to be on some function that can be measured unless you 
want to measure democracy and is it better that it is more accountable than less accountable?  Are 
there less quangos than there were before because they are now accountable to a democratic 
structure?  I think it is much more difficult to identify in the delivery sense.  There is no point in 
having delivery if you have not got very clear what you are asking to deliver from it.

	Mr Liddell-Grainger
103.   I was looking at a report about the Forward Strategy Unit which would do Ablue 
sky policy thinking@.
(Mr Prescott) It has got a ring about it.
104.   It has unfortunately.  The report then goes on AIt has been considered very 
valuable to have a body which is slightly out with the Whitehall process@.  Who is responsible 
for this if it is slightly out with the Whitehall process?

(Mr Prescott) It is chaired by Lord Birt and one or two others who would then give some 
ideas and thinking to the Prime Minister himself.
105.   It is by Geoff Mulgan.
(Mr Prescott) Geoff Mulgan is the one who does PIU and he probably sits on that but I think 
it is Lord Birt who has been set up to do it.  The Policy Unit, which I think originally was set up 
by John Major in these areas, and we have adopted the same principle, they are the ones that 
actually looked at cross-cutting looking at various policies.  I think their reports have been 
commented on by this Committee as being a useful way of looking at policy.  I hold a strong 
view as well that party policy should also be intervening in this.  I hear all these blue skies 
policies but  just to balance out with the parties as well, that is the red sky one perhaps.
106.   Maybe.  I cannot argue with that.  There was a reply to the hon.  Member from 
Nottingham North about annual reports from government in which you announced they would 
not be putting out government reports.
(Mr Prescott) Annual reports.
107.   Annual reports, I do apologise.  If we have then got blue sky committees slightly 
outside Whitehall, how are they then going to be accountable to Parliament if there are not going 
to be annual reports coming from yourself?
(Mr Prescott) They are only advising the Prime Minister of the long-term thinking on policy, 
that is all they are doing and it has happened time and time again.  I think you have got a dozen 
outfits in yours giving you advice about that.  They are not civil servants, they are not 
accountable to Whitehall, it is the Prime Minister looking ahead at what he needs to do.  The PIU 
looks across these policies and publishes reports to give an indication of the government=s 
thinking on these areas.  I do not think that is complicated or a problem.
108.   Who are they paid by?
(Mr Prescott) They are civil servants.

(Mavis McDonald) Lord Birt and the groups of advisers who are advising the Prime Minister 
are working part-time on an unpaid basis.
(Mr Prescott) The PIU ones are paid though.
109.   The annual report and the reporting back to Parliament is no longer going to exist. 
 You do say that Ait will come back in a variety of means, such as reports, statistic bulletins@, I 
love those, A and ministerial statements and parliamentary questions@.  
(Mr Prescott) Do not forget the website!
110.   Are we not going to have one coherent way of finding information from both Lord 
Macdonald and your Department?
(Mr Prescott) Can I ask Gus because he has direct responsibility for that.
111.   It was his letter to the Prime Minister.
(Lord Macdonald of Tradeston) On the annual report, I think we can all agree that it was not 
a universally lauded document.  I know that the Committee felt there was some value in it but 
I think the judgment, if you are weighing costs against benefit, was there was a great deal of work 
going into that chasing perhaps a chimera of objective assessment and it turned out that it was 
politically contentious inevitably and subject to scrutiny which was often very subjective and 
perhaps unfair.  It was felt that four years on there were not many other ways in which we 
communicated information across Government.  I would commend you from my experience of 
DETR, of course, to annual reports which are a huge source of information.  It was simply felt 
that we should not proceed with that because there are so many other ways of getting the 
information over nowadays.

112.   Can we take a specific case as you said annual reports.  The RDA in the south-
west has put an annual report in and when you look at what it says it bears no relation to what 
is reality.  I am talking specifically about the Objective 1 position in Cornwall.  The report from 
the RDA says they are making it work but the reality I think you will find in Cornwall, which I 
am not a  Member for, I am Somerset, is that is not actually the position.  Surely we should be 
told more information about how you are actually achieving what you would like to do, which 
certainly in the Cornish position is Objective 1 which is vitally important to Cornwall which I 
do not think anybody would disagree with in this House or anywhere else.
(Lord Macdonald of Tradeston) We believe that we have expanded the supply of information 
and it now comes through many different mediums and you will be able to access that 
information more readily than in the past.  Certainly I think that will have more value than the 
sadly overly contentious document that has been produced in past years.

	Chairman
113.   I think the Committee=s view on that, just to be fair, was that it was a very, very 
good idea to produce an annual report which joined up accountability within government and we 
would have liked to have seen it improved and meet some of those criticisms rather than 
abandoned.

(Mr Prescott) We have not totally abandoned the concept.  For example, Departments all 
produced their reports and Select Committees would look at them but what the annual report was 
trying to do was bring them all together, which was quite an exercise and, as you know, made 
one or two little mistakes in what was reported, whether it was Sheffield or something like that, 
and it was used to that kind of ridicule in a way.  The annual reports are there but our view is on 
cross-cutting things, like social exclusion, there should be some kind of thing that you will not 
get from an individual Department, how it pulled together.  If you take the one that you are 
talking about in Objective 1 and what happens in the economic development, that is very much 
dependent on the number of Departments producing in different areas.  We are looking at how 
we can make an effective report on issues that normally would not be in the Departments= reports 
or seen on the web but can still make a report of how successful are we in the cross-cutting 
exercise and improving the targets that we have set out for ourselves.  We have not ruled out 
doing that, it is just that the annual report served its purpose in the sense of we have tried it, we 
think we can do it in a different way and we will welcome your views on it when we give a 
response on it. 

	Kevin Brennan
114.   You mentioned previously your responsibility in relation to regional government 
in England.  Could you explain to us what your responsibilities are in relation to devolution in 
the devolved nations in the UK?
(Mr Prescott)  I cannot think of the title but there is one committee that deals with devolution 
in the British and Irish Council and I have one direct responsibility to chair there between the 
implementation of the devolution of settlements both in Scotland and Wales.  We meet about 
once a year annually.  The last meeting was in Scotland where we reviewed the settlement and 
the difficulties that might have been associated with it, things like job subsidies, do they have to 
be the same in every area and we get difficulties between different areas to work out.  The next 
meeting I think is to be in Cardiff and that is the one I do chair but at the annual meeting the 
Prime Minister comes and we have that annual meeting and assessment of the programme.  There 
is also a statement as well that we are working out the terms and reference of agreements between 
us.
(Mavis McDonald) Yes, a memorandum of agreement.
(Mr Prescott) A memorandum of agreement, which is always a controversial issue when you 
are discussing with the constituent parts of the United Kingdom.
115.   I just wondered whether as part of your responsibility you had encountered any 
reluctance  in Departments within Government to allow devolved nations to exercise their 
powers in the fullest possible sense or whether you have seen differences between one 
Department and another in the way they deal with devolved bodies?

(Mr Prescott) I do not see a problem between the Departments that may, say, have the 
responsibility for the English regions in properly recognising the devolved power that Parliament 
has agreed should be given as in the settlement for Wales and Scotland.  I do see problems that 
sometimes come from people thinking Ain Wales it is not the same as Scotland and should we 
not have that?@ and perhaps they want to demand more resources or more powers.  That reflects 
itself in discussions but the Committee I am on is basically to make sure the agreements we have 
at the moment are properly implemented and co-ordinated across the constituent parts.
116.   In terms of the Civil Service, are any difficulties encountered at the centre with 
having a Civil Service that is apparently serving one master, a unified Civil Service but it is 
apparently serving one master in one part of the UK, and possibly serving another master where 
there are policy differences in devolved parts?  What I am getting on to, I suppose, is what 
lessons have been learned from the preparation of policies for devolved regions?
(Mr Prescott) These are always evolving, the pressures in each part, whether in Scotland or 
Wales for what should be the powers and resources in these areas, those debates go on and 
sometimes they are pushed to expression inside the committee.  For example, they may decide 
to do something more than they have got money for and the argument is should we provide more 
money or not.  These are arguments that come out of operating the present agreement and this 
committee is a chance of settling them.  Let me give you one which is a difficulty, if you like. 
 Do you agree that in regional policy the job subsidy should be the same for all parts or should 
it be argued it should be more for one area than another?  I think in those kinds of issues, in 
which I have a role to play, I certainly hold the view that it should be the same for all.
117.   Is there any attempt to co-ordinate policy announcements that, perhaps, although 
they do not appear to be so in the media, only affect England, for example, with the policy in the 
devolved nations?

(Mr Prescott) I think the devolved areas tend to reserve the right to say AI want to do it this 
way@ and we acknowledge that.  I think the latest example was the Education White Paper where 
the Welsh said they did not want to follow certain parts of our Education White Paper and then 
drew up their own and published it.  Providing it is within the devolved powers and agreed then 
they have a right to do that.

	Mr Prentice
118.   This is to the Deputy Prime Minister.  In your memorandum that you sent to us, 
in paragraph 13 you told us that the changes had given greater strength to Cabinet government 
and the committee system.  My question is really about Cabinet government.  There are people 
who say maliciously that we have a presidential system masquerading as a Cabinet government.
(Mr Prescott) We are talking about the press again, are we!  I am joking.
Mr Trend: Talking about me.

	Mr Prentice
119.   I just wondered what your response to that would be and if the changes have led 
to greater discussion within Cabinet because, again, I read in the press that the Cabinet does not 
meet very often and when it does meet the meetings do not last for very long.
(Mr Prescott) How do they know?
120.   I suppose colleagues put down parliamentary questions.  I am just asking a 
straightforward question and would like a straightforward reply.
(Mr Prescott) I am probably reflecting some of the exasperation when you see these 
journalists who write all this from the side really.  
121.   You must not be exasperated.

(Mr Prescott) How long should the Cabinet take over its business?  As long as it needs to 
discuss it I assume.  I have read, and I am sure you have, that under previous Labour 
Governments, and Mr Heseltine=s resignation in the Cabinet, they take longer when you have 
difficulties inside a Cabinet.  We have not experienced that difficulty in this administration.  We 
deal properly with it, every Cabinet Member is able to raise it.  We do it in the period of an hour 
or an hour and a half.  You can ask is that as good as having a Cabinet meeting of four hours 
where everyone is rowing?  I do not know.  I am just saying that we have sufficient time in 
Cabinet to get on with the job.  On the question you asked, which is an important one, about the 
Cabinet government, in the main we have not been as effective in utilising Cabinet committees 
as perhaps we could have been but that is because we found agreement among Ministers.  
Cabinet government is about where we have agreement and you send something round and we 
can do it by sign off.  I have to do an awful lot of that in this job.  Now it is very clear, 
particularly now I have a new domestic committee, most of the things can be referred to that 
committee where there are disputes and disagreements and it has to be agreed through that 
process.  That is strengthening the Cabinet committee, it has been more actively involved, we get 
more agreement that way.  I think as you get longer in Government you might possibly get some 
more disagreements and if you get disagreements you have to settle them some way.  They either 
go to the Prime Minister and he settles them or you go through Cabinet government.  The Prime 
Minister has made clear in restructuring the Cabinet committee that that is the first place you 
work out.
122.   That was what I was getting at really.  We are talking about a system of 
government which is based on bilaterals between the Prime Minister and individual Ministers.
(Mr Prescott) But that always has been so.
123.   But, to a large extent, there must be a lot of Ministers who are outside the loop 
because the Prime Minister will decide who he wants to consult on a particular issue and if 
referring a matter to Cabinet will take up too much time and there will be too much discussion 
it is easier to decide things bilaterally, then that is quite a big change, is it not?
(Mr Prescott) My experience is that it is not necessarily the Secretaries of State who will sort 
it out and if you do it that way they are forever knocking on No10's door, are they not, and the 
Prime Minister is then actively involving himself trying to sort it out.  I think I am available to 
do that job, and I am doing it.

124.   A final question on this.  The Joint Cabinet Committee with the Liberal 
Democrats, what has happened to it?
(Mr Prescott) I do not know, I never sat on it.  As I have already said, as they are not going 
to do it, it is not a problem for the future either.
125.   It is a serious question.
(Mr Prescott) I am sorry I have tried to give you the best answer, I did not sit on it so I do not 
know what it does.  I had no intention of sitting on it and I did not.
126.   Does anybody know what has happened?
(Mr Prescott) It was a means by which we chatted with the Liberals.
127.   It was a formally constituted committee.
(Mr Prescott) You are right.  We did have an agreement in the election on constitutional 
matters to discuss with the Liberals and a committee was set up to deal with that.  It followed 
from a commitment we gave in the manifesto.  I am pleased the Prime Minister did not require 
me to sit on it.  After it had completed that work, what else was there to do?  I believe the 
Liberals felt it was not worth pursuing any further and the Leader of the Liberals said they are 
not going to do any more about it and I am quite happy with that.

	Chairman
128.   I think we have got the idea on that.  Before Gordon strayed into all that, can I 
take you back to the first part of his question which is the nub of this in a way.  In the 
memorandum that you have given to us helpfully for this meeting it says two things.  It says that 
the job of the Cabinet Office is Ato support collective government@.
(Mr Prescott) Yes.

129.   And then later on it says that all these changes that we are talking about are to do 
with Astrengthening and deepening of the relationship between the Cabinet Office and No10". 
 I put it to you, and I thought this was what Gordon was asking, I cannot read these changes in 
any way that strengthen collective government but what they certainly do is beef up the Cabinet 
Office/No10 relationship.  I wonder why we have to be so coy about this all the time?  Why can 
we not simply say that we are developing a Prime Minister=s Department?

(Mr Prescott) I do not think we are intending to be coy about it.  I suppose you could say AI 
am a politician, I am here to help@ and you could put your interpretation on that.  You may be 
genuinely intending to help but that is our role in the Cabinet Office, to work with the Secretaries 
of State to see that they can deliver, they want to be successful.  Look at it like this, the 
Secretaries of State have to get the resources to do whatever they want to do and it has to have 
the procedures and the policies to carry out that programme and hopefully it will be successful. 
 There can be arguments with Treasury about whether you should have resources in these matters 
and Treasury has a direct responsibility but when we have a collective outcome, and in those 
discussions where we all sit round there can come a collective decision, that can impinge upon 
these areas of collective responsibility.  While it is a departmental trade-off largely between the 
Treasury with most of the Departments with PSA they come to an agreement but any aggrieved 
Secretary of State who feels this is not satisfactory and cannot reach his targets will then be 
coming through the Delivery Units and will be in the PSX group where we will decide a 
government policy.  This Cabinet Committee is helping, it is hoping that we can help Secretaries 
of State to deliver on their programmes and it is beneficial to both.  At the end of the day we will 
stand on the final result and that is a collective responsibility with a collective government.
Chairman: I will ask colleagues for very snappy questions, we are just into the last few 
minutes, and perhaps we can have fairly snappy answers too.

	Mr Trend
130.   If I can make an observation following what you have said.  If this had been in the 
last Parliament, and I think it is true that nobody has mentioned this phrase at all, we would have 
spent a great deal of time talking about joined-up government.  I am sure other Members of the 
Committee remember this, it was the jargon of the day of course.  With the disappearance of the 
annual report and nobody on either side of this exchange discussing joined-up government and 
more focussing on beefing up the centre, some of us think there is a sea change going on slowly 
but surely in the way in which we are governed and it is no longer so clear as it was where 
accountability rests.  It cannot be attractive a job to be a senior Cabinet Member unless you are 
close to your party leader.  I would argue it is a transfer to a presidential system of government 
and when that Freudian slip was made in the other House and someone referred to the Prime 
Minister as the President the whole House burst into laughter.
(Mr Prescott) I think it was one on your side.
131.   It was indeed.  I think was unintentional but everybody knew what he meant.  If 
the Prime Minister wishes to change the system of government and the Civil Service has to be 
moulded, it does leave lots and lots of loose ends and loopholes in terms of responsibility.
(Mr Prescott) It is a serious matter and it is a judgment about the power of No10 office.  I 
think that question could be raised right through decades of political activity.  If you look at 
Wilson=s government, which you referred to, in the 1960s he established the Cabinet Office, and 
it has grown and it is no coincidence so have the political advisers who have doubled under every 
government in that process.  This is a real and proper question.  Is this the same kind of 
government that it was 60 or 80 years ago?  There are differences.  I thought Mrs Thatcher was 
pretty presidential, was she not?
132.   Would you personally think that there ought to be some cap or level on this where 
it is more exciting and important for somebody to go into the spin doctor trade than become a 
Member of Parliament like you did?

(Mr Prescott) I hope they would make the judgment that I made.  I find it is better than 
working for a living.  Leaving that aside, I do find it a difficult question to give a proper answer 
to.  It is a real question for each and every one of us and that is at the heart of the argument about 
Select Committees and accountability of government, the role of the Prime Minister, how these 
things play a part.  I have just come back from Russia and the Ukraine which are trying to 
develop their democratic systems and they think somehow if you get press freedom that will 
solve everything.  I said Acome over to Britain and have a look at it@.  It is a balance.  It has got 
to balance.  I do not know what the real answer is.  I notice the trend and I am pleased to be 
actively involved in it and to be accountable to people like yourself but at the end of the day I do 
not know where we will end up, will Prime Ministers become more powerful or less powerful? 
 I suspect the trend through all political parties has been that Prime Ministers want to deliver, 
they want to be successful and they feel they actively have to intervene to make sure that they do 
deliver.  This Prime Minister has made delivery the issue more than any other Prime Minister and 
he is a hands-on Prime Minister.

	Brian White
133.   Can I come back to the whole issue of private sector involvement in the public 
service.  One of the lessons that certainly local councils learned was that if they did not put 
resources into project management and contract compliance when services were dealing with the 
public sector they lost out.  We should treat that as red tape and cut that bureaucracy, as Anthony 
Steen was talking about.  How is the Government going to square that circle of more resources 
in project management and getting the skills, which we have always been bad at, and managing 
the relationship with the private sector?

(Mr Prescott) I do not really know.  I think we have all had to learn from the private sector 
as the public sector.  I come from a thinking that was very much public orientated but the 
experience we have seen over the last 20 or 30 years show there are gains to be made by working 
in both public and private, and we all say things about that.  We have had difficulties because we 
have been too ideological in how we settle some of these matters.  I think there is a fresh thinking 
to that although it is not without its problems and we can see that at the present stage and there 
are lessons to be learned.  I was thinking when you were talking before about computers.  We are 
always amazed in Government Departments just how something becomes so expensive and then 
fails completely.  You have taken all the best advice, you have paid hundreds of millions out to 
consultants, and they are the only ones who really gain anything in this process, and you find it 
fails.  It is difficult and it is frustrating but it is the nature of Government.
134.   Because we do not put resources into project management.
(Mr Prescott) I think that is an important argument that we have used for resources as well. 
 I think the resource management argument, the changes that have been made in the Treasury, 
are the same kind of thinking.  I cannot give you an adequate answer on the budget one, I will 
just follow it up.
(Lord Macdonald of Tradeston) If I could just come in on project management.  There is a 
very central issue for us and we have an Office of Government Commerce now under Peter 
Gershan and I know Sir Richard and others in looking at the skills that the Civil Service needs 
feel very strongly that we must try to train up people with an expertise in project management 
and also, as you say, in contractual matters too, the handling of complex contracts.  There is also 
the IT area where there would not be natural expertise inside the Civil Service.  I can assure you 
that the Civil Service seems to be very alert to these concerns and is working to try and repair it 
as quickly as possible.
(Mr Prescott) Plus, if you look at the way we have done it in the Treasury over the years 
governments have tended to say Atighten up the finances, force them to do it properly, 
compulsory competitive tendering will bring in the elements@ but I am afraid looking back on that 
it does not, it would be better if we did project management but also generally improving the 
quality of management itself.

	Mr Heyes
135.   Much of the questioning of the Committee has been about trying to trace lines of 
accountability and you yourself have referred to the importance of accountability through the 
democratic process.  The key task, according to your memorandum, for yourself is to produce a 
White Paper on Regional Governance, as it is described in the document.  I think there is a subtle 
distinction, is there not, between regional governance and regional government and that is what 
I want to try to get to.  You talked about one of your decisions needing to be about what is to be 
the level of democratisation in the regions.  I do not recall that when we were discussing 
devolution to Wales and Scotland that we used the term Adevolved governance@, we were talking 
about Adevolved government@.  Does this imply something very much more watered down for 
the regions?  If that is the case, if that is the use of the word Agovernance@, what are the 
implications in that for accountability through the democratic process?

(Mr Prescott) I think that is a very important point.  Governance may be another word that 
you are using instead of government but I would draw the distinction that government is directly 
elected representation, whether it is local government or central government.  We have said as 
a government that we will allow the people in the regions to make the decision whether they want 
to go to a directly elected assembly or whatever.  In regard to Scotland and Wales we have set 
out what it would be and they could say yes or no.  What we have said is that it may be different. 
 There is some doubt as to whether all regions of the United Kingdom want that.  I remember 
they said that about the Regional Development Agencies but every region took them.  Leaving 
that aside, I have to accept the possibility that if it is up to the people to make a decision whether 
they want to go to some form of regional government and it is elected, fine, that is government, 
but if other regions say they will stay with the regional chambers they have at the present time 
to give advice on strategic matters while the administration of government in the region is carried 
out by the existing local government structure, that is not government as I see it, it is a body that 
is indirectly elected, if you like, to carry on with it.  There are different shapes of government that 
would take place and would flow from the argument if you give people the choice to say which 
one they would have.  A White Paper has to address itself to that because government does not 
finish if they say they do not want a referendum on whether there is regional government and we 
have to contemplate the differences that there will be in different regions.  
A good example, I will finish on the point is if you look at our commitment that it should be built 
upon unitary government, we have said based on the unitary local government.  If you are into 
the north-east region something like 62/63 per cent of it is covered by unitary authorities, if you 
go to the eastern region of this country it is no more than 15 per cent.  So you do have a local 
government structure and a government issue in those various aspects that we have to direct 
ourselves to in the White Paper.  Governance tends to cover them all so I went along with the 
modern word. 

	Annette Brooke
136.   You are coming back with some reading C
(Mr Prescott) We are going to have quite a post if you ask me for something else.
137.   I shall look forward to it.  You are head of the Cabinet Office - I am still trying 
to get my head slightly round this - and we have these questions about is this really a Prime 
Minister=s Department.  What I do not quite understand are the people, jointly or individually, 
who, as far as I can see, are located in the Cabinet Office, maybe they just a rent a room, but do 
not actually report to you.  The women=s unit is one that I am particularly interested in, for 
obvious reasons, but that does not seem to report to you at all, as far as I understand it.  I believe 
the Chairman of the party, Charles Clarke, is in the Cabinet Office but I cannot see how he links 
and how he reports to you if you are head of the Cabinet Office.  We have covered Lord 
Macdonald does not really report to you, we discussed that earlier, but do you think you could 
just take those two examples.  Can you explain to me how you co-ordinate all the work of 
Government through the Cabinet Office and yet there are exceptions there where as far as I can 
see perhaps you say Agood morning@ to them but that is about it?

(Mr Prescott) No, again the Prime Minister is the head of the Civil Service, he is head of the 
Cabinet Office also.  He has the whole Prime Minister=s Office in that and we are all included 
in that Cabinet Office.  The special functions and roles you pick out, particularly the one on 
equality, Baroness Morgan has the obligation to report to the Secretary of State who has the 
responsibility for carrying out that function in her Department and that role.  She sits, again, with 
me if they want to come into my own Committee but I have more of a responsibility with Gus 
because we are delivering the same areas.  On the equality issues, she is directly responsible to 
the Secretary of State, now also to the Prime Minister, as the Baroness has chosen to do in that 
matter.  Now, Mavis, do you want to answer on this since you are drawing all these graphs up?
(Mavis McDonald) Traditionally the Cabinet Office has provided a home in terms of a base, 
if I can put it like that, for accounting and housekeeping purposes for a variety of Ministers who 
are not part of that team dealing with the Cabinet Office core business.  So, for example, the 
Leader of the House of Lords has been traditionally based within the Cabinet Office.  So if you 
look at our annual report then we cover a range of people who do not quite slot there but in the 
case of Charles Clarke, for example, to the extent that he gets any support as a part of his official 
duties as a Member of the Cabinet, then he has to have a channel providing support.
(Mr Prescott) Which was the same under the previous administration.
(Mavis McDonald) Yes.  We are used to living with a picture which is broader than the 
traditional, if I can say, kind of front line department where you are more used to the formal 
hierarchy.  So there is a broader group of ministers there.  By and large, as the Deputy Prime 
Minister says, on some occasions they will come together and on others they do not.
(Mr Prescott) So we have still got a bran tub.

	Chairman
138.   You are going to provide us with a diagram with all the arrows going in the right 
direction so we can understand it.
(Mavis McDonald) Yes.
139.   We look forward to it very much.  As we end, because it is our business amongst 
other bits of business, just so we are absolutely clear about this, we are charged with the 
responsibility of looking at the Civil Service.  Could I just ask you who now has Cabinet level 
responsibility for the Civil Service?
(Mr Prescott) For the Civil Service?
140.   Yes?
(Mr Prescott) Well, the Prime Minister does and that has always been so.  The Secretary of 
the Cabinet reports to him directly on that, in matters where we have described there is the 
division of certain responsibilities for it.  Have I got it correctly?
(Mavis McDonald) Yes, that is right.
141.   We have asked the Prime Minister to come and talk to us about these kinds of 
things.  He said it was somebody else=s responsibility, Mo Mowlam=s.  Now we have not got a 
Cabinet Minister responsible.
(Mr Prescott) Well, we have somebody who will directly answer for the questions in these 
matters which will be Chris Leslie in the House of Commons.  
142.   Not a Cabinet Member?
(Mr Prescott) No, he is not a Cabinet Member but there is a responsibility.  Certainly the 
Cabinet Member is the Prime Minister.

	Mr Trend
143.   We must ask the Prime Minister again.
(Mr Prescott) You have the Secretary of the Cabinet coming, good luck.  
Mr Trend: Not quite the same.

	Chairman
144.   Can I just ask, in addition, without going back to stuff we were doing at the 
beginning, I just would put it to you, the Government is committed to introducing Civil Service 
legislation. Would this not be the way of just showing people that if this was the first government 
that had actually put the Civil Service on a basis which gave it some statutory constitutional 
protection it would see off all these criticisms somehow about politicisation, contamination and 
all that?  So instead of us annually saying that we are in favour of all this, why you not just get 
on and do it?
(Mr Prescott) Well, part of that is to do with legislative time.  We are not disagreeing in 
principle.  I am not so convinced, and I have heard you on a programme and read you in evidence 
saying that people feel this, I do not think in the main people share those views.  But, leaving that 
aside, you have properly expressed that and represent the people for that.  We have promised to 
do a legislative framework and I think as you will see when the Cabinet Secretary comes, and I 
indeed will answer to this effect, we do intend to do that.  We do not necessarily totally agree 
with everything you have said on that.  Quite a lot of what you have said is so and we will 
produce that legislation.  I will make it clear that it is the view of this Committee to the Prime 
Minister and others that you very much feel it should be an order of priority in our legislative 
framework.  

Chairman: We are very grateful to you for coming along.  We share absolutely the 
Government=s commitment to make delivery central.  We look to you as the midwives and we 
shall no doubt want to get the midwives back at some point to ask how the delivery is going and 
also how you see the system that has now been set up, as to whether it itself is proving effective 
in doing the job that is being done.  Thank you for coming and talking to us so openly and 
frankly. 

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