Select Committee on Public Administration Minutes of Evidence


Examination of Witnesses (Questions 160 - 179)

THURSDAY 15 NOVEMBER 2001

LORD HASKINS AND MARTIN TAYLOR

  160. Which leads me neatly on to the question of vaccination. What did you advise the Prime Minister to do back in March? We read that he was uncertain in his own mind whether we should slaughter or vaccinate and you told us earlier you were an adviser. What was your advice?
  (Lord Haskins) A lot of us were asked. I was asked in this particular case as a supplier of foods to the great British public. The question which was asked was whether the great British public would accept food from vaccinated animals. A number of retailers and manufacturers were brought together and the answer after a lot of discussion was yes. The second question was whether we would be happy to sell food from vaccinated cows, milk from vaccinated cows, without labelling it. The answer was yes. That was a very good answer to that because animals are being vaccinated all the time. The head of the Food Standards Agency, Sir John Krebs, said that if we had to label it, we would have to label every product which came from the dairy herd, "Might have been subject to vaccination against pernicious diarrhoea", which is a very common and friendly sort of vaccination which we give to calves. Therefore we would be labelling all products, "This might have been . . .". We won that argument and most people accepted that people would be safe in taking their food from vaccinated animals. But in the end the Government did not vaccinate.

  161. So your advice was set to one side.
  (Lord Haskins) It was. Other factors were considered. There was the issue of the foot-and-mouth-free nature of Britain and if you vaccinated there was then a problem. There was the issue of whether it would be effective. The proposal at that time was purely to vaccinate the cows which were in sheds before they went out to pasture. The decision was taken not to do so. I suspect it would not have made very much difference. Introducing vaccination at that stage in the crisis was probably too late. When we come to review this, we shall have to look at vaccination much more seriously.

Kevin Brennan

  162. I was interested earlier on when Martin Taylor said that the only thing the private sector could bring to the table in the public sector was competition. Then you went on later on to say that private sector management was superior to public sector management. Which is it? What is the reason for involving the private sector. Is it to introduce competition or is it to introduce better management?
  (Mr Taylor) The management is superior because it has the discipline of competition. That is the point. The crucial difference between the public sector and the private sector is that the private sector is subject to competition. Business people do not do energetic things or risky things or all that because they are fundamentally dynamic, they do it because if they do not they go out of business. That is the spur.

  163. Another thing you said later on was that civil servants and possibly Cabinet Ministers had more interest, as far as the Health Service was concerned, in avoiding political trouble than in improving patient care. That is a very serious accusation to make and in terms of our investigation of the public service ethos, if that is the outcome of a public service ethos, then it means that the public service ethos is a pernicious influence on delivery. What evidence do you have for that damning indictment of public service.
  (Mr Taylor) You have been quoting from my assorted journalism and as you know journalists are not required to produce evidence. Let me give you a parallel. One of the things for which the new Labour Government has been rightly praised from many sides, was the decision to allow the Bank of England to set interest rates and take it away from the Treasury. There is absolutely no doubt that the interest rate policy setting process before, and I mean for many decades before, was a highly politicised one and that we very often got the wrong interest rate because Ministers were involved who took a political view when an election was coming up, based on whether there was some embarrassing news around in some other way. To have got ourselves clear of all that seems to me to be an enormous advance. I would go further and I would praise the Chancellor not only for giving the Bank of England the freedom to do this, but for not badmouthing the Bank in public when it does inconvenient things. His silence on this score is magnificent and it contrasts with what people are doing on the continent at the moment where every Finance Minister sounds off every week. I take that diversion because I think what happens in Health is somewhat similar. Targets are set which are essentially political targets. The target we have at the moment is waiting lists. That is by no means the only or even the major determinant of patient care. I think that if one of Lord Haskins's entirely unaccountable agencies were setting policy for the NHS, a devolved NHS, without reference to political pressures, they would not start there. I do not blame the officials and Ministers for the situation. It is the natural consequence of excessive promises made in the past and a kind of national hysteria. It is just unlikely under those circumstances that the right things will be done. It is very unfortunate.

  164. How do you overcome, or does it matter that you cannot overcome, the tension which exists when you do things that way between accountability and delivery? How can you maintain accountability if you hand over the whole shebang to an independent agency?
  (Mr Taylor) It is immensely complex and you would not in fact just do that. You should start thinking along those lines. I do not sense, maybe I am just uneducated on this matter, that that is the way the Government is thinking, in terms of changing the long-term governance of the National Health Service. Any intelligent government would long to be free of the incubus of the Health Service; it is a source of constant ministerial embarrassment and it is set up to be for the next ten years.
  (Lord Haskins) On the targeting thing, Government should be very careful. If Government think that the private sector is run by a whole lot of targets being set and everybody achieving them, the cheating that goes on in the private sector in achieving targets is as spectacular as it is in the public sector. The opportunity for a manager in a large company to use bureaucracy to achieve a target is actually quite extensive. The only target that matters at the end of the day in the private sector is earnings per share, profitability and all that. It is a very simple target. In the public sector you do have to develop other targets. The ultimate target in the public sector is that Parliament and the people are satisfied with what they are getting. That is the ultimate target.
  (Mr Taylor) What I also know from the private sector is that if you have one key target and you subordinate all else to that, things will go wrong elsewhere to try to get you to meet that target.
  (Lord Haskins) Absolutely.
  (Mr Taylor) It is a dangerous temptation that we keep falling into.
  (Lord Haskins) If you take some of the remuneration schemes, the share options, these can be very, very disruptive targets set within the private sector. You will find managers taking wrong decisions to achieve those sorts of outcomes. I would just be very careful of targets. They have to be there but make sure that you recognise their limitations.

Chairman

  165. The more I listen to both of you, the more I am struck by this thought. You both think that if only you could get politics and politicians out of the picture somehow everything would be okay. Surely this is the infirmity of the business view of government over the ages, is it not?
  (Mr Taylor) Let me defend myself while Chris thinks of some witty riposte. No, I do not think that, but in a sense politicians have brought this on themselves. They claim credit for all sorts of things which happen quite naturally without them, so they naturally get blamed for all sorts of things over which in fact they have no control. The difference over the last 30 or 40 years is that we live as businessmen in a consumer society and so do politicians now. People are constantly going on about their rights and expectations. Their rights and expectations are much higher than they were and so they should be and the hurdle is constantly being raised. Politicians are always more impressive to me when they do not promise immediate results, but when they state their objectives over a long period and move sensibly towards them. Unfortunately, promising miracles is not taking politicians out of this, it is taking that kind of instant tabloid politics out of it because I think that is where they get into trouble. But then I am only a businessman.
  (Lord Haskins) As far as Parliament is concerned, the policy, the strategies have to be determined at that level. We are daily talking about the way we deliver those strategies and the mechanism for delivering those strategies, those integrated mechanisms, the increasing assumption that every Minister is responsible for every action within the National Health Service. It has to be faced that that is unworkable and a step should be taken back from that. You have to make those independent agencies accountable. There is a quite sensible way of making them accountable to Parliament on a day-to-day basis, through for example the Audit Commission and the National Audit Office. Let us recognise that Ministers should be humble about how much they can deliver personally. They always fall into the trap of promising over-delivery.
  (Mr Taylor) Like chief executives.

  166. The other bit of the picture then is also a mythology about the private sector. I had a letter the other day from a major British company, a high street retailer asking me whether I would like to join them at a gala Labour Party dinner. This was one of these £1,000-per-head dos that people like you go to. I wrote back and said that my dealings with their company had been so appalling over the years—and I gave them an instance—that I had vowed never to have any more contact with them and I was afraid I could not come to the dinner.
  (Mr Taylor) Good for you.

  167. Where has this idea come from that somehow salvation is coming from the direction of British management, which has an appalling record, British companies, many of which are lousy, for our public services?
  (Mr Taylor) Why do you say British management has an appalling record?

  168. I thought that was just a truism.
  (Mr Taylor) One of the problems of the misunderstanding between the public sector and the private sector is that so many people in Parliament do believe that is a truism. It is not. It is false. I heard someone in one of these committees the other day saying, "Look at Marks and Spencer, it has fallen on its face", and all the rest of it, "How can we trust British managers?". Of course the reason Marks and Spencer has fallen on its face, and yes, they may have been arrogant and foolish and all the rest of it, was that they were up against people who did certain things better than they. That is what is forgotten. There were lots and lots of people who came into the market and attacked them and took their business away. Now they are fighting back again. That is a healthy process. People do concentrate on some of the things which go seriously wrong and I must say we have had some egregious examples recently but it is largely a function of the business cycle. All my business life I have watched the public attitude to business people follow a quite predictable cycle, depending on where interest rates are, which goes, "The businessman is hero. The businessman is idiot. The businessman is a crook". We go round again. People are infinitely more professional than they were when I was first in the business world. They are competing in an extraordinarily open global economy because Parliament has been wise enough to open our markets. On the whole they do a good job, and if they do not do a good job, my goodness they get shot pretty quickly. We should be aware of this. I do not believe that they have the solution to every problem and I do not believe that they are wonder workers, but with respect nor are they shambolic.

Mr Liddell-Grainger

  169. Are you paid for all this work you do?
  (Lord Haskins) No.

  170. Not a penny?
  (Lord Haskins) Not a penny.

  171. Therefore to whom do you feel you are accountable?
  (Lord Haskins) I suppose at the end of the day I feel accountable for giving advice to the Prime Minister. I am only giving advice.

  172. I accept that, except you are giving a lot of advice. Here you are, a trustee of Demos—
  (Lord Haskins) No, I have given that up.

  173. You have given it up.
  (Lord Haskins) Yes; too busy.

  174. Is that because it was blue sky thinking and you did not see that as—
  (Lord Haskins) No, I was involved in Demos at the beginning and it was a very remarkable innovative thing and I am glad to see the Government has taken a lot of the Demos thinking on. Things move on. You should not stay with anything indefinitely.

  175. I am intrigued. I am going back to the ethos. You are talking about the way you perceive that we have these monolithic organisations which are breaking up. Do you think that regionalisation is the way forward? Do you see the RDAs as a good thing, for instance?
  (Lord Haskins) I do. I am sorry, but I am on an RDA too. They are an interesting experiment. The danger is that if they are there they have to be given support. I have a question mark about their democratic legitimacy but they are an interesting experiment and should be encouraged and should be used as part of this delivery process. They should be the link between central government and local delivery and they do have a role to play. RDAs are in effect a public/private partnership which work quite well, and should be built on.

  176. Coming on from there, do you see that strategic health authorities are going to be something the Government should be embracing? They are now talking about them coming in in April next year. Do you think it is a good idea to have strategic health authorities, in other words trying to break it up a bit and stick it to regions?
  (Lord Haskins) Absolutely; absolutely.

  177. Do you see a regionalisation as a way to go?
  (Lord Haskins) I do; ideally. We have a very centralised system. The trouble is that we have had two disastrous attempts to reform. The 1972 reform was so awful and the 1992 patch-up did not work so, nobody has the stomach for the sort of reforms that are needed. Defining regionalism in England is a difficult subject. I do not think people want to belong to a place called the East Midlands. They do want to belong to Yorkshire but they do not want to belong to the East Midlands.

  178. Do you think the public ethos can hinder the delivery of good services because people get so ingrained with it? You were talking about these large organisations which do not always work to the best for their end user, but is it just because the ethos is out of control?
  (Lord Haskins) It is not so much the ethos. As long as they have the responsibility for this and they feel they are going to be held to account, then you will get what Martin was talking about, the sort of bureaucracy where protecting themselves is more important than protecting the customer. You have to change that structure and I think that can be done. I have used the agency process and that is the way.

  179. By breaking it all up and sticking it into regions, or counties.
  (Lord Haskins) By making it more consumer driven than producer driven. The old English counties worked quite well in their own sort of way. Local government was the real point of delivery until 1944.


 
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