Select Committee on Public Administration Minutes of Evidence

Examination of Witnesses (Questions 140-159)



  140. So it is the usual suspects!
  (Mr Mather) The usual suspects are enormously more powerful now. The consumer bodies, it seems to me, have made an enormous leap, in that, for example, they will now, under the Enterprise Act, have the power to bring super complaints against businesses and class actions, essentially, so that we may suddenly find there is an interest on the accountability of consumer bodies themselves because their new powers are so different from their previous role. People may begin to ask about the accountability models within that.

Mr Heyes

  141. Like the Chairman, Mr Mather, I thought I was reading a revolutionary pamphlet when I started going through it. You were really motivating me to join you in this great case you were making in favour of democracy and against the transfer of powers away from politicians but you seemed to be saying, basically that there is, a "depoliticisation" of many government decisions and that is at the heart of what you are welcoming about this. But is it not the case that what is happening really is that decisions are being moved to a different political arena? It is a non-elected political arena, staffed by people appointed through the process Dame Helena has spoken about which in some ways seems to be a little mysterious. It is certainly not codified or readily understood. It seems to me likely to produce a particular type of person, with a shared value system: "the usual suspects". That is the new political arena, is it not, that is making what are in fact political decisions? But doesn't your paper welcome the depoliticisation of decisions?
  (Mr Mather) I think it is resolved by recognising that these people, the new decision makers, are not responding to the vote motive in theoretical terms. They are free from the rent seeking, vote seeking, populist, short-termist pressures to which elected politicians must be subject. Having been one myself, I am very aware of it upon either side. I suspect, therefore, that the question of whether this is a good thing or a bad thing must be resolved by evidence and I would put as my first piece of evidence the experience of the Monetary Policy Committee for the Bank of England, that since we have depoliticised, in my terms, those decisions, we have had a better ability to tackle inflation, we have had a more serious debate about the subject by politicians of all parties—I see Michael Howard's statement this week recognised that it was the right decision to take. So, whilst I am certainly very conscious of the need to measure by evidence whether the new decision-making system is working, I think the lessons so far in that sort of arena suggest that it is, and the lessons on the other side, the old public services run by ministers and departments (Health, Education, Transport) even the Prime Minister seems to think are not quite right. So, if one was drawing a map of the functioning British state: things which work well in it and things which do not work well, I would suggest that in many of these areas the new bodies (electricity, gas, we have talked about, fertilization embryology—very difficult ethical issues, the whole audit world) Britain has gained enormously by transferring the decision-making power and the remaining problems tend to be concentrated in the area where traditional ministerial and civil service approaches prevail. So I personally am quite uncompromising about this: I think the evidence speaks for itself.

  142. Dame Helena, after your opening remarks, I should declare a sort of interest: I was a CAB manager before I started here. I am familiar with the world you talk about and, certainly, elections are an important part of the way that organisation is managed and run. I felt from the way you spoke that you see it not just nostalgically but, in a way, you see some real benefits of elections compared with what I have just described as the rather mysterious way in which you were appointed to these other positions you have held. Is there not a very great difference of opinion here? I am trying to provoke some disagreement between you.
  (Dame Helena Shovelton) One of the things I struggle with on the business of how elections work with the bodies—and I am not talking about politicians now, I am talking about people on quangos, basically—is really seeking to understand how it could ever practically work. I do not know how it could practically work. Well, I did know how it could work in the CAB services: it was a smaller, self-contained organisation and the rules were, if you like, clear and understandable. There are issues that are not usually put to the test. For instance, in my mind it would be perfectly interesting and acceptable to appoint everybody, from a politician's point of view, onto a government body but then to allow that group of people to decide who was the best person to chair it, for instance, rather than to appoint the chair, so that the level of interference is less. You chose a group of people you trusted to do something and then it was up to the group to decide who they felt was the most competent amongst them to do it. I think that would be a perfectly acceptable and clear way of moving forward. It might easily mean you landed up with a group of people being very clear and happy with the person they had chairing it, whereas they might or might not, now depending on the circumstances. I think that is not always easy to do and there are certain jobs where I do not think that would be possible, because the people concerned would need to have very particular skills or the bodies do not operate in that same corporate fashion. The Competition Commission operates, for instance, completely different from the way the Audit Commission does in terms of the way members are involved and the way the organisation is run. For instance, we will have quite large meetings at the Competition Commission where major topics are discussed but the day-to-day organisation is entirely handled by the chairman and deputy chairman and the secretary of it rather than the people who are members. At the Audit Commission that would be totally different and the members would be involved, meeting on a regular basis on the way in which the whole organisation was going forward. The difficulty is: how do you bring a set of rules in that is one set of rules to such a complex and different variety of bodies that operate in different ways? I find that difficult to understand how one could do that fairly and well.

  143. You are arguing a case in favour of an electoral college approach?
  (Dame Helena Shovelton) Yes, I think that would be certainly something to consider. I do not say it would be better; I think it would just be different.
  (Mr Mather) I think it is an excellent idea. You have not provoked any disagreement on that. It would be a very valuable development. The only risk in it, of course, is that it may further divorce the thrust of the organisation from the wishes of ministers and therefore it does make what I call the "call-back system" terribly important, the precision of legislation. On which, if I may, just bring in very briefly a European dimension. The Lamfalussy procedure, which means essentially that a lot of European legislation will now be done outside the parliamentary system by the European Commission, does have a very innovative call-back system, which means that the legislation itself will be sun-setted and parliament itself can intervene when it thinks something has gone astray, so it is then exercising a proper scrutiny in a very focused way. It seems to me that that offers a very interesting model for this country's potential future technique. But, if I may just go back to your last question about the difference between elected and appointed: without overstating this, I think those of us who have ben elected politicians know how many decisions have to be taken very quickly on a sort of rule of thumb: Who has put forward this? What do we do about that vote? They are taken in a matter of hours and we hope we get them right. In the appointed bodies, you cannot operate like that. You have to operate, whatever the procedure is, more seriously, on a longer-term basis in a more sober fashion, not least because it is subject to judicial review, for example. And it does seem to me that that has advantages which we have to be frank about.

  144. Have we not simply gone too far for a call-back system to be introduced or made effective? The power has gone too far away from the hands of politicians. Your paper demonstrates that.
  (Mr Mather) We may be on the cusp of it. I think, if, for example, your Committee was not inquiring into this and there were not opportunities to focus on it we could find it would be very difficult to get the right balance again. But I am sufficient of an optimist to believe that if we are spotting this thing as it happens and if we are imaginative about these techniques we can get the balance right rather than have a rather juddering clash between the two worlds in a few years' time.
  (Dame Helena Shovelton) Here you get some margin of disagreement. To me what is interesting about this is that when you are operating within these bodies you do actually feel highly accountable, even if everybody in the world is telling you that you are not. I know that, for instance, people are always saying that the Audit Commission is not accountable to people. It is used as an example because it was set up in a very particular way, the legislation, which was unusual, to put it mildly, compared with other bodies. But I was sitting down last night trying to work out whether this was actually a fair way of looking at it. I looked at the evidence that was given when another select committee looked at this whole issue about a year and a half ago, and what fascinated me was how many different points there were in the political process for the Audit Commission, both within parliament directly and with the ministers, actually being given information and they could have intervened in any part of that process. What was fascinating was that on the whole they did not. So it was by omission that it feels like the Audit Commission is not accountable, rather than actually the facts of the issue. I can remember, when I was chairing it, bringing in the notion of, and having, open meetings, for instance, which had never been done before—going round the country and having these meetings and asking members of the public in and asking local authorities to talk to us about what was wrong with our performance, etc. Not all public bodies do that. So there are all kinds of different levels of accountability within this and I think the difficulty is to make a broad statement about it without actually looking at the particular for many different bodies.

Mr Trend

  145. Dame Helena, perhaps I could press you a bit further about your departure from the Audit Commission. The Committee has had evidence from people—we recently had the ombudsman in and he clearly is not very happy with the business of the Parliamentary Commission for Standards—and a number of people must feel very sore about the way their employer or their appointer—whoever that is, but at some level it must include the Government—has treated them. Do you feel that you were badly treated in the way you left?
  (Dame Helena Shovelton) I am a fairly grown up person. I know life rarely goes entirely smoothly. What I would say is that it did not feel like the best moment in my life and I was pleased I was going on holiday for a fortnight afterwards and I had time to consider where I was going and what I was going to do. I think that ministers have a right to decide who they want chairing the bodies that they have a right to appoint people to. I was obviously not the person they wanted to do that. It did not feel fair, but that is a different issue. Fairness is not what you always get in life. All I can say is that I think you have to accept these things and move on, which is precisely what I have done.

  146. I can understand, from a personal point of view, that is very sensible advice and I am sure we would all take it in life's disappointments. You said about the CAB that its rules were very clear and understandable. It is obvious that the rules in this developing state which Graham Mather describes are not clear and understandable, and it would be possible, if wicked spin doctors got to work, to suggest that you were inefficient or corrupt or inadequate for the job, but to have no stated reason whatsoever must be an appalling position to be in. Graham Mather believes that you are an excellent and very hardworking chairman.
  (Dame Helena Shovelton) That is comforting.

  147. What does one do in these circumstances?
  (Dame Helena Shovelton) I do not think you have any power, so you just have to accept your lack of power. It is difficult. I am not saying it is not difficult, but you are appointed for a term. I was not dismissed, therefore I could not ask for the grounds for my dismissal. My contract came to an end, they decided not to renew it. That is a very different thing from being dismissed. One has to note the difference between the two. Nobody made me any promises to say I would do two terms. The fact that the previous people had done one term and some had done three meant that this was obviously an issue that was open to interpretation and question. I had certainly hoped to do two terms. I had not expected to do more than that because of the way the rules had changed, so that commissioners, for instance, knew when they were appointed they could not do more than two terms. It was, indeed, disappointing not to do a second term because all kinds of things were in my mind that I was working towards doing. But I think you always have to accept that when your face does not fit you have to go away and try to behave in a dignified and proper fashion.

  148. In political circles, faces do not fit. There is enormous instability within a cabinet or shadow cabinet or even a party committee. From week to week faces fit and faces do not fit. This is a world which we inhabit courageously but knowing the risks. I do not think it is fair to ask people in public service to have a sort of hybrid set of rules, some of which are understood and some which are not and, indeed, might be briefed around by a very powerful government spin machine suggesting this or that in a way which the press grasp in a sensational way. Why should people of real talent and ability put themselves forward, knowing that they are going to behave straight and are going to do a proper job, spend a lot of time, not be paid nearly as much as they might be paid in a purely private role and yet they are also subject to all sorts of vicissitudes and the viciousness of the political system?
  (Dame Helena Shovelton) Because you have sort of half joined it, have you not, by going into this world? You know, you could either keep out of it or go within it, and I think you have to accept the territory is different. I have certainly had said to me—and this is not rumour and supposition—by a considerable number of people whom I would have considered to be good people to go into the public appointment system, that, as a result of the various different actions that have happened, that it is not a route they would consider choosing in the future. So I think these things, if they are seen to be unfair, can have a limiting effect on the way in which people wish to be involved. I think that is very unfortunate. I genuinely think that people are wanting to be helpful to the way in which this country is run in all kinds of different ways and there is much more a sense of public duty than most people give the nation credit for. I do think it seems as if life is different now than maybe it was 20-25 years ago, in that one would have been a very unremarkable person if one was doing the sort of work that I have done. The lottery, I think, is a different situation because it is much more of public interest than the Audit Commission. The Audit Commission is something that, frankly, if you say you chair it most people have no idea what it is and get it immediately muddled with the National Audit Office and you go into a hugely complex debate. This is not usually the sort of news that hits the headlines. From a fairness point of view, for anybody who is entering a field of doing a job I think it is absolutely right and proper that somebody comments on their performance in that job. That needs to be done in a systematic way against a set of rules. There should be a proper appraisal system. If you then knew you were not doing well, you would not expect to be re-appointed. If you were doing well and you had been told it and you were not re-appointed, you might feel quite taken by surprise. I think it is a quite uncertain system from the candidate or incumbent's point of view, to go through an appraisal system that you have no idea what it is and nobody speaks to you about it until a decision has been made.

  149. I would agree with that. It seems to me that at the heart of this, as Graham Mather, says, is an issue of accountability. Bizarrely we had a senior civil servant last week who was acting very like a politician. In order to get answers to questions, or at least to try to get answers to questions, we cast our net ever wider because we are looking for people who might know the answers and it seems to me to be an unsatisfactory situation. Perhaps I could ask Graham. Graham, in this paper you suggest that politicians have become more showbiz—and there clearly always has been an element of showbiz. You say, ". . . it may be that politicians are now beginning to specialise in presentation, spin and networking, leaving the difficult decisions-making role to Britain's new decision-makers." If I could ask Graham, why have politicians done that? Because, as you say, they have given it away voluntarily. Is it because they are becoming more cowardly or less able to do this job?
  (Mr Mather) I think the stakes are getting higher. Taking food safety, or human fertilisation, for example: these are terribly, terribly difficult at an administration, policy and even moral level. I think that under the pressures of other activities it is quite understandable that ministers say, "I would rather that this was handled by an expert body." I think the experts are prepared to take on that role, but I do detect signs, talking to regulators especially over re-appointment, that they are becoming a little uneasy about it because that is where the system comes back in on them again, and may make that commitment of time. For example, if you take a very senior professor, someone from the top of an international company and someone from abroad; after they have given of themselves in these highly complex areas that are highly important to our country, and it is not known at the time whether they will be re-appointed—it may be delayed or the department may make a hash of it or they may approach people on the side and that may then leak out—it is doing a terrible injustice to those people. I do come back to the feeling that we are already seeing some of our regulators who have told their departments, "I am only going to do one tour. Your plan holds no terror for me because I am not seeking re-appointment. I therefore feel I have a completely clear relationship." If we institutionalise that, then I think that would give comfort to a number of other people and avoid some very difficult problems that we have seen in the appointment system generally.

  150. I think that is a splendid solution to a pressing problem, but I still do not quite understand why politicians—I am sure you are right that things are more technical and the risks are greater for politicians; but politicians like to pull levers and push buttons when they are in government, and to deprive yourself of the ability to do this, except by extremely crafty ways when re-appointments come up, it just seems that there is an element of lack of self-esteem in politicians perhaps.
  (Mr Mather) It may be that Britain's political class has lost some of its self-confidence. Perhaps that is linked to the under-performance of some of our public services, which those who operate with them cannot be unaware of. I suppose it is also, in part, that there is a trend, a fashion, a habit. Whitehall, once it gets into a model—it is rather like privatisation; it may be argued it went a little too far because they got on to auto-pilot. It may also be arguable that this quangocracy—another election of decision-makers—could risk becoming on auto-pilot, but the elected politicians forget or do not re-design for themselves a proper role in it. That is really the purpose of writing the paper.


  151. Why are ministers involved in this process at all? Why should you be calling on a minister to be told whether you were to be re-appointed to the Audit Commission or not? I quite see that ministers should have a job of specifying what the job is and what the requirements are, but why on earth is the minister involved in doing this?
  (Dame Helena Shovelton) I do not know. I cannot say. I genuinely cannot say. My experience is that ministers are involved in these decisions, and that is how the system works. Whether it is right or wrong, that is how it works. I knew that decisions would be made at a political and ministerial level whether I stayed or not. What I was not aware of was whether it would be made on an issue of competence. That is the dividing line.

  152. Instead of having ministers decide there is a Nolan type person on these things, why do we not just do it properly as with other types of jobs? You would decide on a job specification and have a procedure to fill it, and then the procedure should decide on re-appointment. Why are politicians involved at all?
  (Dame Helena Shovelton) I do think some of it comes back to the fact that most places, whether it is government or not, find it extremely difficult to operate good, fair appraisal systems, and therefore people are genuinely diffident about trying to remove people from positions. When people who were originally appointed for an unspecified period of time way, way back, were appointed for the job and did it until they fell off the perch at the end. That was not thought to be satisfactory, so people then brought in terms of office. But people are very reluctant to genuinely engage with somebody else's performance, make decisions, and act as if they are your boss, which is basically what the relationship is, but it is not. This is the difficulty of it. That is why the business of the electoral college is a useful notion because then the performance is being judged by people who are actually watching you on a daily, if not weekly, basis, and seeing whether or not you are doing the job properly. If not, it is very clear that at a certain period of time you can make any set of rules you like, like the CAB, once a year; and the board has a right to say whether or not people should continue in that capacity. Reports can be sent from the board independently, privately, to ministers, who could then be in a position to say whether people should be removed from that board. There is no doubt that across the wide spectrum there are people who perform less ably than others, but that issue is never dealt with. That is not picked up in the political system at all.

  153. In the NHS now, the Government has moved to having an NHS Appointments Commission because of all the flack around appointing chairs and non-executive members; so now we have taken that away into a separate independent channel. If we can do that for the Health Service, what is different about that from the rest of the quangocracy?
  (Dame Helena Shovelton) To me, the interesting thing is that you can make any system in the entire world on paper, but the real thing is if it comes down to either head-hunters or the people doing this having in their minds lists of people that they are going to appoint, so that no system will ever work fairly or properly. You have to get to the point whereby selection is done on merit in a very wide field. Then, once that is done, you get into a position whereby there will be a choice of candidates. I think it is perfectly reasonable, if you are a minister responsible for a department and wanting a particular policy to be undertaken—that that policy has at least somebody who can take it forward. I do not think that has to be somebody who is politically aligned, so I do no see those two things as being absolutely necessary.
  (Mr Mather) The NHS Appointments Commission may be another example of where it is more trouble than it is worth. Instead of it being an advantage, for ministers having the right to sign off on these, it becomes a big political problem; but the other side of that coin is that you now have commissions appointing commissions, and they may vanish into a vortex. There is then the question: at what point does it re-connect with elected democratic politics? That is why it does seem to me that as well as using electoral colleges where appropriate, confirmation hearings would be a very valuable way of preserving that link. Ministers often do the job—to answer an earlier question—because of statute. They appoint the Director-General of Telecommunications, and you cannot easily change that. But Parliament is not properly evolved, as I think we are all probably agreed, and the confirmation hearing approach may strengthen the best practice that Dame Helena mentioned: peer review, appraisal, predictability and proper procedures. They could all help police the system.

Mr John Lyons

  154. I think that the whole question of an individual's performance is important. If an assessment is made annually, somebody has to have a good reason for not appointing at the end of that; but the failure to do that offers no protection at all. Were you told at the beginning of your job that you would be assessed annually?
  (Dame Helena Shovelton) No, nobody made it clear at all how I would be assessed during the period of my appointment, nor had it been clear while I was a commissioner. I presumed I had done well as a commissioner because somebody wished to appoint me as chair.

  155. Was appraisal never mentioned at all?
  (Dame Helena Shovelton) No, although, as chair, I was asked by the department to give comments at the moment of appointment on the commissioner's work, and I did that. I never did that without discussing with the commissioner first what their performance was and therefore one could go forward with a view that they had participated in that process. That was not something I was required to do; it is something that I did.

  156. You mentioned the hope for public service agreements, service delivery agreements. You also mentioned the role that the Select Committee might take in that process. Do you have any comment?
  (Mr Mather) I think that the PSAs and the SDAs could be enormously valuable in bridging the divide between decision-taking or executive agencies and ministers and departments. They are, however, at the moment, Cinderellas, in the sense that very few people know about them. They are not topics of everyday conversation in local hostelries. Even in Whitehall, they are rather arcane documents that cause a lot of angst when they are negotiated, typically with the Treasury, but then presumably are put on a shelf and forgotten about for a while until the next one comes round. Why not make use of these Cinderella documents by saying, "we expect in the relationship with a particular organisation that it will be captured in the PSA or SDA, and as a Select Committee, when we see you in the course of our regular or occasional inquiries, we will hold you to account against those documents." It seems to me that we have a vehicle with some valuable roles in the present system, which are little understood but which have potential to help this Committee and others in their search to promote accountability.

  157. They have been very successful in some voluntary organisations with local government and the demands made in terms of service delivery and based on the funding. It has worked very effectively.
  (Mr Mather) I remember the National Council for Voluntary Organisations did a paper when these contract techniques were coming in, and they said that, "we need to make sure that we extract efficient and agreed outcomes whilst not selling our own soul", and I think they have been rather effective in protecting the independence of voluntary organisations that are providing services, whilst giving a concordat for both sides on what they are expected to deliver.

  158. Do you think there would be opposition from departments and ministers in regard to that kind of accountability?
  (Mr Mather) If you go round departments, they do to some extent regard it as a sort of Treasury power bid and a means to cramp their style, especially as they are linked to finance, but I think, more soberly, people appreciate that you cannot any longer have budgets without declaring what you are going to do with them, that we all have to operate in a rules-based system, and that these agreements are valuable in the trade-off process. I think departments ought to be prepared to say in this case, as in other areas, that they are prepared to forsake some of their old administrative discretion, which often means they do not specify what they are going to do, but wait and see what turns up. If we are being grown-up, people should abandon some of that for the greater certainty of these new methods.

  159. Is there any practical way you could get the hospital trusts involved in this, some of which are spending millions of pounds in budget, but when there is no recall or accountability for how that is spent and what was delivered for that money?
  (Mr Mather) I think, when I look at the nine—now ten—interlocking bodies in the National Health Service, all trying to produce some level of accountability, I sympathise with that question. I think, though, that the complexities in the present system are of an almost Railtrackian dimension. We need a very deep and thorough re-examination of the whole system of National Health Service financing, accountability, service delivery and contracts, of which that focus on the trusts would be a part, but only a part.

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