Select Committee on Public Administration Minutes of Evidence


Examination of Witnesses (Questions 420-439)

SIR STEVEN ROBSON, MR JONATHAN BAUME AND MR JACK DROMEY

THURSDAY 29 NOVEMBER 2001

  420. I understood that, yes.
  (Sir Steven Robson) I know. Which is a completely different kettle of fish from being a non-executive director in DTI. I would define the role of these non-executives at DTI as useful but limited; and you could have Gerald Corbett if you wanted to, in that, I would not have Gerald in the role in my Office of the Chief Executive of Government.

Chairman

  421. Who would you have in there?
  (Sir Steven Robson) Someone like John Brown of BP.

  Chairman: Make a note of that, would you, Clerk?

Mr Wright

  422. Just returning to Jack, for the first point, on this public service ethos. You mentioned some of your members are actually employed by the private sector but work within the public sector itself; is it possible, in your opinion, to have a public service ethos working for the private sector?
  (Mr Dromey) There are some contracts that our members work in that are well-managed contracts, and the individuals are, as a consequence, well-motivated. It would be wrong to pretend that there have not been some contracts of that kind; they are the exception, not the rule. There is no question but that the ethos changes, and, interestingly, if you talk to the private sector, they acknowledge that; they acknowledge that not just in employment terms, but they acknowledge that in terms of the wider issues, including that issue of accountability. It was once put to me by a leading figure in the private sector that, essentially, their relationships are contractual relationships with the client, and that they have difficulties seeing the community as being more than just recipients of service, and acknowledging that the community is a community and that they are dealing with citizens. So there are real difficulties to reproduce what is that valuable, crucial, intangible that we have been talking about earlier on today, in contractual relationships, real difficulties.

  423. Jonathan, you mentioned the fact that some of your members have left the Civil Service to go into the private sector and doubled, and in some instances quadrupled, the salaries. Is that not the bed of the problem, on the basis that you are not paying enough money for the people to carry out the public service? Indeed, Steve Robson has mentioned that while Bob Kiley is on £500,000 a year, the candidate that would shake up Whitehall must be worth £2 million; it is either the fact that Kiley is paid too much or we are not paying people enough at the top?
  (Mr Baume) I do not think senior salaries are high enough, frankly. We put in evidence to the review body, and I think the Senior Salaries Review Body is due to report very shortly about that. People do not do the job for money; of course, money motivates everybody, everybody wants to earn a decent standard of living, so do not misunderstand what I am saying, but many of the people we represent could go off and earn a lot more money doing other jobs outside the public sector, but they do not, for a variety of reasons which we have touched on. But I do think we have underpaid senior public servants in Britain, I think there has been a culture that says that somehow it is not acceptable to pay senior public servants decent salaries. I do not think anybody is expecting to be paid the same as senior jobs in the private sector; on the other hand, you can question whether some of the salaries paid in the private sector are warranted by any criteria whatsoever, a point that has been raised by many MPs and other outside commentators. I think the balance has got far too skewed to be helpful, and particularly when you compare the differential between senior managers in the private sector and the majority of private sector workers. In the public services there is a concept that there needs to be a balance struck, that inevitably there will be differentials, as you take on more responsible and senior jobs, but those need to be kept within a reasonable framework, and I think that is a concept of fairness that people are happy to accept.

  424. So what you would say then is that just the fact of offering a larger salary would not necessarily attract the right people into the job?
  (Mr Baume) No, it would not. If you offer too low a salary, you may turn away potentially very good applicants. But people do not do these jobs predominantly for the money.

  425. I have got this conspiracy theory that during the eighties and nineties there was this plan to diminish the role of the public servant, either within local government, which is the background I came from originally, in the early eighties, when there was constant pressure on local authorities and the public sector to cut back, whether it was through capping or other means, I perceived that to be an area which was pushing us further and further to rely on the private sector, and hence the position that we are in at the present time. That was perceived, in your words, in some instances, as throwing money into the public sector that was not having the desired effect. Surely, that is where the problem actually lies, is in the eighties and nineties, where there was this desire, probably private was perceived to be best by the Government of the day?
  (Sir Steven Robson) Certainly, the Government of the 1980s had an ambition, in its own words, to roll back the frontiers of the state, that was quite clear and it did do so. I think, actually, we are on a rather different point here, which is, wherever the frontier happens to be at the moment, can we make the public services work better. Now, it seems to me, everybody around this table agrees that it ought to be possible to make them work better and the question is how do we do it. The easy answer is to throw more money at them. I suspect that, if one could actually look at it in some depth, one would conclude that at the moment the taxpayer probably gets 75 pence of value for every pound that is spent in the public services, and that that is some measure of the gains we could make if we could get the system to work better.

Chairman

  426. Where have you produced this figure from?
  (Sir Steven Robson) I have produced it just from my experience over the years of looking at what happens when changes are made, what kinds of changes in value for money tend to get thrown up; obviously, it is a very wide spectrum, but actually quite a lot seems to narrow down into the area of 20 to 30 per cent, sometimes it is a lot more, sometimes it is less, but it seems to be around there. And that is the sort of conclusion I came to, that this may be a measure of the potential for improvement, but it is not just an improvement in cost, it is also an improvement in the service that is delivered through the mechanisms as well. And, as I say, I think the issues there are ones about objectives, incentives and management, and getting improvements in those areas could help us harvest that 25p, or whatever it happens to be.

  427. Could I just ask you on that, is it the case then, if we follow that analysis, is it that we need a once and for all shake-up that would reclaim that 25 per cent, and then we can settle down and just do it in the normal way, or is it a continuing—
  (Sir Steven Robson) I think, whenever one looks at a situation, I will take the Treasury, for example, back in the mid 1990s, we made an attempt to improve the efficiency of the Treasury, which, frankly, had not been an issue which had interested the management of the Treasury ever since I had been in it, so there was, if you like, a backlog to catch up; but once you tried to catch up the backlog there was then a constant process of improvement from the new base, whatever it was. So I think there was a combination of both catching up on the deficit, as it were, but that is not the end of the game, all around us in the economy productivity is rising, and productivity needs to carry on rising in the public sector too.
  (Mr Baume) Can I just make one additional point. I do not disagree with that, about the need to be working constantly to improve the quality of the services.

  428. You do not disagree with the 25 per cent?
  (Mr Baume) I assumed that was a rather off-the-cuff figure, and I do not want to comment on that, in particular. But I would say that change, certainly in the Civil Service, is generated predominantly from the role that Ministers want the Civil Service to play; particular priorities are set, for example, there has been a lot of work going on behind the scenes about improving the quality of how policy advice is drawn together, work from the Performance and Innovation Unit, and I think this Committee has looked at some of this in the past. It was not that people did not feel there was a problem but it was not seen as politically an area that Ministers wanted Civil Servants to spend time analysing; now you can ask why, and all the rest of it. But do not forget that, particularly at the heart of public services, the decisions that are taken are based on the priorities that politicians set for those services, and, in services that are often underresourced and people working in very pressured jobs, you devote your attention to where the politicians want you to devote those attentions, and things inevitably get missed. But I think attempts to reform the Civil Service are welcome, and something that we are very supportive of.
  (Sir Steven Robson) Can I say, I just do think that is a rather extreme view. The best politician in the world is going to have a fairly limited horizon, the horizon is going to be fairly near to him, just because the public sector is a huge organisation and the amount they see cannot, in its nature, be very great, they have a close horizon; and, yes, within that horizon, they set their priorities. But, in my view, there is a huge responsibility on those of us, as I used to, who work permanently in the public sector to improve the way that it works beyond that horizon, and the bulk of the public sector is beyond that horizon, and that is a heavy responsibility.
  (Mr Dromey) Yes, but not by pretending that the private sector has all the answers.
  (Sir Steven Robson) No-one has pretended that.
  (Mr Dromey) But take that extreme view, Steve; it sounds to me that what you are arguing is, in essence, this, that privatisation is the greatest miracle since the virgin birth, pain-free, heaven on earth. And the problem about that focus is that it is diverting the debate away from how you renew the public services, key issues, in terms of the quality of management. If I can just draw in an additional point, what our General Secretary, Bill Morris, called for in the summer, the notion of the academy of public service excellence, because there are real problems about the quality of public service management, even if we reject the rather bleak picture that is being painted by too many politicians. Secondly, what a serious public service excellence agenda looks like, as to how you run things well. Thirdly, there is the crucial issue of the involvement of employees and their trade unions; and, I have to say, one of the weaknesses in areas of the public sector is on precisely this point, that notion of day in, day out involvement of employees in a culture of continuous improvement, what that looks like, and also the proper role of trade unions, in terms of debate, particularly, on strategic issues. And, fourthly, on the people agenda, for what is in excess of five million public servants. I sometimes think that that key debate gets obscured as a consequence of the kind of ideology that we have heard here today.
  (Sir Steven Robson) First of all, I have not said anything today to suggest that privatisation is a wonderful thing. I have said constantly today that the key issues are ones about clarity of objectives, incentives and management, and if those are not people issues, Jack, I am not too sure what is.

  429. If that is the point though, I think you are not being entirely honest, because I think your supplementary point is that those cannot be delivered within the public sector as it is now though, because you did say how averse to change it is?
  (Sir Steven Robson) I do not think it can be, as it is now, but that does not mean that therefore the only answer is to privatise it. What I have been talking about is introducing diversity and choice. Just to take one of those things, the incentives, the incentives in the public sector are, as Jonathan has said, fundamentally, of a blame culture, of creating an aversion to risk and change, and all the sort of effort in the world is going to find it incredibly hard to change that directly, which is one reason why taking some activity out of that environment and putting it in another environment may be a sensible way to promote diversity.

  Chairman: Okay; we are enjoying this so much, but we have got to just get towards the end of it, I am afraid.

Mr Heyes

  430. It is for Sir Steve. I am fascinated by his motivation. Going back to the opening comments, I think you said that you were embarrassed, even ashamed, to admit that you had worked for 30 years in the public sector.
  (Sir Steven Robson) It was a joke.

  431. I realise it was a light-hearted comment, but what you have said since tends to confirm the reality of it. If the public service ethos is just a sentimental concept that you personally do not subscribe to, I do not understand why you went to work in the public service in the first place, and why you stayed with it for 30 years; can you help us to understand an alternative view?
  (Sir Steven Robson) It is extremely straightforward. It does not mean that I have to subscribe to the public sector ethos. I believe that what the public sector does is extremely important for the well-being of our economy and the well-being of our community, and I was honoured and privileged to work in that for 30 years, I enjoyed every moment, I enjoyed the job tremendously, I got a lot of satisfaction out of it. The fact that I believe that, if we are going to fulfil our obligation to our community and our nation to provide the public services that they deserve, there needs to be a considerable amount of change in no way suggests that I did not think it was the right place to work and where I wanted to make a contribution.

  432. If the three key elements of making the public sector work better are incentives, clear objectives, good management, you have really driven those points home today, just to pick one of those, how were you incentivised when you worked in the public sector?
  (Sir Steven Robson) I was not incentivised very well, frankly.

  433. You stayed in it for 30 years?
  (Sir Steven Robson) I thought I had just made clear that I did not stay in it for 30 years because I thought it was a perfect place, I stayed in it for 30 years because I thought it was a very important place, what it did was very important, and I was privileged to have the opportunity to contribute to it. I do not think one has to work somewhere solely or simply because you think it is perfect. The fact that there was a need to improve things and the scope and opportunity to do something to try to improve things was a reward and satisfaction in its own right, and the fact that the incentives that I and my colleagues faced were poor and imprecise simply emphasised the need to try to make those changes.

Chairman

  434. But are you not describing a public service ethos which drove you for 30 years, which you have now come and told us is a fantasy?
  (Sir Steven Robson) I am not describing a public service ethos. If it is any of those things that I described at the beginning, a readiness to work harder and better, of selflessness and objectivity, what I had was the opportunity to do a job which I thought was important and which I enjoyed. That is the opportunity which is presented to a lot of people, happily, in a lot of other parts of the economy. Quite a lot of people do not get that opportunity, and that is a great sadness, both in the public and the private sector; but the fact that there are jobs which people can derive a lot of satisfaction from and feel they are making a worthwhile contribution in doing is not unique to the public sector.

Brian White

  435. Can I just ask, is there a different public sector ethos between the great and the good and the ordinary worker in a care home, so somebody, a senior civil servant or in a care home?
  (Mr Baume) I cannot speak about somebody working in a care home. All I can say is, in the past I worked for a different union, representing very junior staff in the Civil Service; initially I represented staff working in job centres and benefit offices, that is very much at the sharp end. No, I do not think there was. I think individuals clearly differ in motivation. Inevitably, particularly in a large organisation of about half a million civil servants, I think that concept of serving the community and serving the public was there amongst very junior staff in the Civil Service, with whom I worked some years ago, as it is there in the very senior staff in the Civil Service, whom I tend to represent now.
  (Mr Dromey) Just very briefly. I welcome what Jonathan has said, because we have argued that, all too often, there is a forgotten army. That when the debate takes place on education, education, education, people forget that education is more than just teachers, it is also everyone from the school dinner-lady, or man, to the classroom assistants. That when we talk about the National Health Service, the National Health Service is more than just about doctors and nurses, it is about the porters, ancillaries, all those who are members of that caring team. When we talk about world standards in universities, universities are more than just about professors, they are also about porters. So it is welcome, the point that you make. And I absolutely agree with Jonathan, what you see is a top to bottom ethos, it varies in its nature but there is a top to bottom ethos.

  436. One of the things that has changed over the recent years is the concept of working in partnerships, whether it is a strategic board, or with the voluntary sector; how do you get the public sector accountabilities that you have been talking about, which is more than just the electorate, on a four-yearly, or whatever, basis, within those partnerships?
  (Mr Baume) In the memorandum from the FDA, I think if we look at partnerships in the round, because some of those partnerships are with the private sector, some of them with the voluntary sector, we listed a number of criteria that we would like to see in place if we are bringing in particularly people from the private sector to deliver public services. The FDA is not saying there is no role for private sector delivery, we have never suggested that; so those seven criteria we saw as ways of setting in place those wider accountabilities. Now some of them relate to treatment of staff, and I think Jack touched upon that earlier; others of them though do relate to transparency and openness, and it is partly about the way that contracts are designed, about the public accountabilities in that sense. If you are looking at the political accountabilities, and most of those are ones with four- or five-year cycles, local government, central government, etc., I think that is a more complex issue to address, and I do not think there is a simple answer to that, but I think underpinning it, nevertheless, has to be openness. For example, I see no reason whatsoever why any contract, signed with any provider, for the delivery of public services, should not, at a successful stage, be a public document; why are we signing contracts that are retained in secret, which makes it very hard then for anybody to assess whether or not the contracts have been delivered. Targets should be open and monitored and publicly available. All of those are mechanisms in play, so that, wherever the level of accountability that you are trying to demonstrate, at least people understand and know what is happening. And I think far too much of this at the moment is shrouded in this all-purpose, commercial in confidence tag, which is used to cover almost any dealings whatsoever, particularly with the private sector but it does happen on occasions, I understand, anyway, with the voluntary sector as well.
  (Mr Dromey) Can I add just very briefly to that, Brian, two points. The first is that there are difficult issues of accountability that arise; and, incidentally, that will be a next-stage debate, when we are talking, as we will be more and more, about public/public partnerships as well. But, secondly, there is a very interesting development now increasingly underway of creative partnerships; so Birmingham's car parks are managed on a joint venture basis between NCP and Birmingham City Council. The employees remain employed by the City Council but good management has been brought in to run those car parks well, and accountability remains with Birmingham City Council. And in the Ministry of Defence, you would not have thought the Ministry of Defence would be characterised by entrepreneurship, but I chaired a conference on 6 September of 200 representatives of the trade unions, Ministry of Defence managers at all levels and the private sector, talking about how we make sensible use, taking advantage of selling into wider markets policy, of irreducible spare capacity to trade commercially. There are hundreds of interesting arrangements that have been concluded, with employees remaining MoD employees, ranging from, on the one hand, the servicing of torpedoes by MoD employees produced by BAe Systems, to, on the other hand, for those of us who have got kids and therefore have to watch Pop Stars, the inaugural video of Hearsay, for their first Number One hit, being made in a wind-tunnel at Shoeburyness, a DERA establishment. Our members were delighted because they were getting their autographs and looking after them whilst they were making the video.

  Brian White: As somebody who used to live in Shoeburyness and was not allowed to know what went on in that establishment, that is novel.

Chairman

  437. Can I ask Steve Robson, I am sorry but we have got to be very brief at this point, but, in principle, do you sign up to the idea that there are problems of accountability and transparency in using private sector operators, and that the only way to correct that is by having the kind of openness that is being described here?
  (Sir Steven Robson) I certainly think there needs to be openness about what the private sector has been retained to do, whatever it is that one is asking it to do, the objectives it has been set and the criteria for deliverables on which it is being rewarded ought to be known to everybody; whether the intricacies of the terms of the contract, is another matter. I am not quite sure whether Jonathan is saying, for example, that whatever the contract is that MoD has with Rolls-Royce to deliver tanks, I think it is Rolls-Royce, it is whoever makes tanks, should all tank contracts be kind of an open document, I kind of rather doubt it, because I suspect that it screws up our tank manufacturers' attempts to sell into other countries. But I think being clear, when someone is delivering a public service, what they have been asked to deliver and the structure on which they are being rewarded, I think that should be open.

Brian White

  438. One of the things that has become clear over the last few years is the role of the Treasury in determining the whole PFI/PPP; how would you see the role of the Treasury in defining what should be in the public sector, can you just explain to me, given your experience, how the Treasury works, in that sense, in this field?
  (Sir Steven Robson) The Treasury could, I suppose, give guidance on such matters as to what parts of contracts should or should not be in the public domain; I do not think it does, and I suspect that some Departments, carrying on this example that Jack has raised of the Ministry of Defence, would feel very jealous of their own rights to determine the confidentiality of their own contracts.

  439. So the Public Service Agreements, that are now seeming to predominate,—
  (Sir Steven Robson) I am sorry, I thought we were talking about contracts between the public sector and the private sector. The public sector agreements are simply contracts, well, they are not even contracts, are they, they are documents setting out what Departments think they are going to achieve in the coming years, in various areas of their activity. I think those are in the public record in their departmental reports.


 
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