THURSDAY 11 JULY 2002
Tony Wright, in the Chair
Examination of Witnesses
PROFESSOR MICHAEL BARBER, Prime Minister's Chief Adviser on Delivery, Delivery Unit, DR WENDY THOMSON, Prime Minister's Chief Adviser on Public Services Reform, Office of Public Services Reform, and MR GEOFF MULGAN, Director, Strategy Unit, examined.
(Mr Mulgan) Hopefully you will have received a written submission.
(Professor Barber) I just wanted to say one thing really which is that in your report in April 2001 you made a number of recommendations about the government at the centre and one of them was that you thought that the Treasury should not be the sole custodian of PSAs. In a sense the Delivery Unit is a response to that thought. Secondly, you said that the Cabinet Office should "become less of a bran tub, as described to us by Michael Heseltine, and more of a central strategist and performance monitor with real clout within government". I think the Delivery Unit is that performance monitor with real clout within government. I see it as very consistent with recommendations that you have made in the past.
(Professor Barber) I was more making the point of great - or in my case less than great - minds; thinking alike.
(Professor Barber) The centre of any large organisation, and the government certainly qualifies as a large organisation, from where priorities are defined and led, needs a means of monitoring performance on the key priorities, in this case of the Prime Minister. I think any large organisation would want a central function, hopefully as in the case of the Delivery Unit, that is very small and in no sense micro-managing, but tracking the data and tracking the milestones in the plans that the departments have and making sure that when either the data or the milestones are going off track in some respect that something is being done about that. All I can say is that over the last year I think as the year has gone by departments have become more and more enthusiastic about the contribution we are making to helping them deliver. So I think that any large organisation would want that kind of performance monitoring function with real clout that you recommended last April and I think it is beginning to work. One of the signs I see of it beginning to work is departments and the Treasury coming to us and saying, "Can you do a bit more and help us with this?" It is a function that a large organisation would need and as departments improve at delivery I think we will find the relationship changes, but I do not think they will decide it is a function they do not want because we are helping them maintain consistency on the key priorities over a period of time, so we contribute to helping them do their job.
(Professor Barber) It is possible, I suppose, but I think you will find, for the reasons I have just given, that having a small performance monitoring function at the centre will turn out to be something that any Prime Minister would want and any centre of government wants and, indeed, that the departments delivering those priorities would find they wanted because it helped to bring the consistency behind their priorities, but the role will change. At the moment there is a focus on getting the planning right, ensuring that the plans are good, ensuring that the plans are being monitored, getting a delivery function working in each department, ensuring they track the data, and that they get good feedback. There is a process of scaling up their capacity to deliver. As that strengthens I think our role will change.
(Professor Barber) They do not call them delivery units necessarily but increasingly they have that kind of function. One of the things we would want to do in the next phase, is to structure data from departments so that we are tracking it and the Permanent Secretary or the Secretary of State as well, if he or she wants, can track it so we are all monitoring performance from the same data and the same milestones in the plans for delivery.
(Professor Barber) It depends on the quality of the data. I have stressed the importance of tracking data and the milestones, so you are tracking the implementation of a plan and the milestones there are being met. The data should be going in the direction that people anticipated when they set the plan out and the data should represent real things going on out there in the health service or education service. The data is about crime going down or school performance going up or whatever it might be. The data is a representation of real delivery, not an alternative. The data should represent delivery, though not perfectly of course.
(Dr Thomson) First of all, apologies for the quality of my speaking voice today. I will do the best I can to talk, but I have a cold. I think the two actually go very well together. I think anyway if you look at the research on high performing organisations it would show you need to focus on delivery and create clear expectations of what is required, at the same time as you are continually developing that organisation's capacity, not just to deliver what you need now but what you need in the future. Both those things are central to successful organisations. I think that is why the two units work together in the way they do.
(Dr Thomson) I do not think I would characterise the arrangements we have in place for monitoring performance in the way that you just have. What is a pretty normal part of most organisations is a capacity to know how they are doing and that is very much what the Delivery Unit is doing. I think most people in any organisation, certainly in my local authority, would be terrified at the prospect of running an organisation where they did not know how they were doing. Highly motivated, well functioning organisations welcome that clarity of expectation and purpose. My experience of inspecting organisations, which as you know I did for some years, the very successful organisations, if we were providing a useful and challenging inspection service, good organisations welcomed that as a catalyst for the changes they wanted to make. It did not become something which was oppressive, it was actually something which created the stimulus and challenge and really provided a mirror for how their performance was doing. It gives a focus on what you need to improve inside.
(Dr Thomson) I think it is a question of balance and excesses. I do not think you could really characterise the Government's spending overall at the level and complexity of the services here, having 160 targets, as being an excessive number of targets. I think for the nation's overall output from its public expenditure that is a fairly modest expectation. In balance, and in that kind of balance I do not think it is oppressive. We are in touch with people managing public services and there is sometimes a feeling that there can be an excess of targets but I do not think that it is often a symptom not just of central targets but a symptom of inefficient processes that run right the way through the system. As we get better at arranging the performance system, people are getting much clearer about the outcomes and clearing away a lot of the debris that has been characteristic in the past.
(Professor Barber) I just want to pick up and challenge your word "micro management". I think there was a genuine fear in departments, and understandably so, when the Delivery Unit was set up that in some way we would seek to micro manage. They do not think that now. One reason we do not do it is we do not have the skills or the capacity. There are 23 people working in the Delivery Unit, there are about 26 people at normal capacity, we just cannot micro manage, we do not want to micro manage. What we want to do is exactly what Wendy described. The other point I want to make, going back to your question, is one of the reasons we help departments, and why they find our work making a real contribution to their delivery, is we put the facts, the data, but also the other facts in front of the people who are making the decisions, the Prime Minister and Ministers. So we are improving the quality of decisions about delivery by making sure that the facts, however brutal, are taken into account. You know, it is true, I think you opened this question by saying "you are the Prime Minister's boys and girls" and we are out there checking up on people. The truth is that the Prime Ministers through the ages have had people reporting back to them on the performance of bits of government. What is different about the Delivery Unit is we are saying the same thing to departments as we are saying to the Prime Minister. We are getting a clarity about how well a given part of government is delivering or delivery against a government target is going. There is a kind of straight forwardness about that relationship which is a big improvement I think on what went before.
(Professor Barber) It is better to judge them on different priorities. There has been in my view a very significant improvement in delivery in health over the last year coming through quite clearly in some of the data. There has been very significant strengthening of the capacity of the Home Office to deliver on key targets. The Education Department has a good track record from the previous Parliament and is very good at planning. It has some enormous challenges in relation to secondary education but it is making good progress. The new team at the Department of Transport in the few weeks it has had has made a very good start.
(Professor Barber) One of the interesting things about government is the data on all the key things is public so the data is out there already. It is all absolutely available.
(Professor Barber) A league table of precisely what?
(Professor Barber) Departments publish annual reports which set out the progress they have made on their key priorities.
(Professor Barber) No, I do not think it will be, but I will certainly consider it!
Chairman: Thank you. Ian?
(Mr Mulgan) I think the report you are quoting was written by a rather good external expert who came to work at the PIU. He was a member of our team working on energy policy.
(Mr Mulgan) He would agree that there is great value for any government in using people from outside government who have experience, who bring insights to bear which perhaps we do not have sufficiently inside. In Lord Birt's case he has a very strong track record in the private sector and the public sector, he has a lot of insights to bring. He works part time, completely unpaid, and has provided a great deal of useful value to government as, indeed, have quite a few other individuals. Their numbers are minuscule by comparison with the permanent Civil Service, indeed by comparison with the numbers of Ministers. I think it would be quite hard to make the case that there were too many of them in government at the moment. My own view is that we have probably got the number about right. Their role is purely advisory. It is worth emphasising that none of them make decisions; Ministers make decisions and Ministers have to decide ultimately whether they are providing a useful service or not.
(Mr Mulgan) He is an adviser. He works for the Prime Minister.
(Mr Mulgan) He is a strategy adviser to the Prime Minister. He works on a part-time basis on individual projects. The Strategy Unit, for which I am responsible, provides support for those projects. We work very closely together. We work very well together and we generally, as it happens, see eye to eye on almost everything so I am rather an advocate of the use both of him individually and of other people like him in government. I think it adds to the quality of the work we do, it brings new insights and new experience to bear. We should be in no way apologetic about it. Previous governments, of course, have used experts of all kinds as well. What we have got a bit better at now is providing a supporting structure to get the best out of those people. One of my jobs is to put together mixed teams of civil servants and secondees from outside government to work with advisers like John Birt.
(Mr Mulgan) I think the Government is getting very good value.
(Mr Mulgan) These are a group of people who have offered their services, again unpaid, to be used on a case-by-case basis on particular projects at particular times as advisers. As I said, if you look at their track records, they bring a great deal of varied experience to bear and they bring a set of skills which we do not have in abundance within the Civil Service.
(Mr Mulgan) The approach we take in the Strategy Unit and before that we took in the PIU, and indeed other units like the Social Exclusion Unit is to work on a 50/50 basis on projects, so about half the staff we use are seconded from departments, particularly the departments which have responsibility in the area being considered, and about half are seconded in from outside government, from academia, business, voluntary organisations, sometimes from outside the UK. If in addition to those people who bring complementary skills, we can get individuals free of charge, at no charge to the taxpayer, that surely has to be a good thing for the Government?
(Mr Mulgan) In the British system, and I think it is the right way to run things, Ministers make all the decisions, Ministers are accountable for those decisions, and advisers advise. If they provide good advice, Ministers will follow it; if they provide bad advice, Ministers will ignore it, and the accountability arrangements are precisely clear and, I think, correct. The use of outside advisers in no way changes that.
(Mr Mulgan) It is very important to emphasise - and Michael and Wendy were saying this as well - that we have a Civil Service of about half a million people, yet we have a very small centre. Most of the work of government is done in departments, it has to be done in departments and can only be done in departments. The centre should not and indeed cannot take all those roles onto itself. The great majority of work we do essentially is providing support for departments, sometimes providing joint teams, sometimes providing advice to Secretaries of State, sometimes helping them solve problems which they are finding hard to solve on their own, sometimes dealing with cross-cutting issues which departments cannot deal with on their own. We are not bossing them around. I think it is very important for you to understand that we do not have very much formal power, we have no budgets, we do not have tanks we can send on to anyone's lawns ---
(Mr Mulgan) If I can finish. We work primarily through influence and unless we can influence key decision maker, Ministers, Permanent Secretaries, the wider government and, indeed, public agencies, in fact, we cannot get very much done.
(Mr Mulgan) It does not look like that from where we sit.
(Mr Mulgan) A Secretary of State running a large department with budgets of many billions, sometimes hundreds of thousands of staff working for them - these are very, very powerful people. We only succeed to the extent that we can persuade those individuals that we are adding something to their work, providing them with some insights, some tools, some analysis which enables them to do their job better and if we did not do that then, frankly, we should not exist.
(Mr Mulgan) Michael can speak for the delivery side. My work involves strategy. As I have said, the great majority of our work is essentially collaborative with departments, it is not supplanting departments. People come and work in my unit from departments. The projects we do have sponsor Ministers from departments. We report to Secretaries of State as well as to the Prime Minister. The view that there is some sort of Stalinist command and control centre which we are sitting in, in the midst of pulling levers and pressing buttons is a very long way from the truth.
(Professor Barber) You asked for an organogram last week. Sir Andrew Turnbull is going to provide you with one.
Chairman: Ian, you have got it already. Kevin?
(Professor Barber) I will start. Clearly getting targets well designed and not having too many is important, that is the first thing. Personally, I think the targets that have been developed over now two Spending Reviews, and the third one about to come through, provide clarity about what the Government is seeking to achieve, which is after all what a target is. With the public money that is being invested in the public services, is a huge advance on what went before. Obviously government will get better at doing these things. Your question I think needs to be answered beyond that. Clearly hitting targets is important if the target is well designed. I think you need, also, to recognise that a target is usually based on some measurement system, maybe school tests or maybe some other set of data, and the data is only good if it represents reality. Therefore, if the target is well designed and based on good data collection systems that are based on reality, it will be reflected also in public perceptions and public experience of the reality. Obviously hitting the target in some kind of statistical sense is not delivery unless that public reality and that public perception comes with it. If the target is well designed and the data collection systems are sensible and the policy is being implemented, and that is causing the target to be hit, then the reality and the perception should come through.
(Professor Barber) Badly designed targets are ones where you cannot necessarily measure whether or not it has been achieved and when it would not represent reality. I cannot immediately think of a badly designed target.
(Dr Thomson) I think it is worth just reflecting on what it was like having no targets. The whole development of targets has been in reaction to a great concern in public policy about demonstrating value for public investment. The whole relationship of trust between taxation and expenditure needs to be able to demonstrate some delivery on targets and it is continually being improved. Internationally, Britain's system of targeting and national allocation is viewed with some admiration.
(Mr Mulgan) If you go back ten years, a lot of the targets in the public sector were essentially about activities, the things people did. They were not about outputs, they were not about outcomes achieved. Some police forces then were having to deal with several hundred performance indicators which did not correlate very closely with what the public cared about, with cutting crime, and were in that sense, probably, in retrospect, quite flawed. There has been a learning process over the last decade. Our targets have become fewer in number, as Michael was saying, more focused on real outcomes. Critically, too, they have base lines. To have targets when you do not have a base line and you do not know where you are starting from is bound to lead to problems. Again, if you look back ten or 15 years there were quite a lot of targets set where people did not know what the starting point was. I think we have made a great deal of progress in that respect. I hope that the targets which are now driving policy are fewer, linked to the things which matter, are measurable and are what accountability should be about. I think it is worth emphasising targets are one of the ways in which Government is accountable to the public who pay their taxes and give government's authority.
Kevin Brennan: I am not sure I am any wiser.
Chairman: Keep pressing.
(Professor Barber) I was not involved in the monitoring of those targets in that Parliament. I think what I can say for sure is that the focus now on waiting times is a real step forward. So that is an example of a step forward, a learning process in the design of targets and the hitting of waiting times' targets meets the criteria I set out a few minutes ago for what is a good target which will be experienced and seen as real by people who use the Health Service. I think that is real progress.
(Professor Barber) I am not saying it was a bad target. No, if a target is good, hit, then you move on to a better target that does not mean you are saying that the previous target was a bad target, I am not saying that.
(Professor Barber) I have given you an example of progress from one to another. Let me give you another example from the last Parliament that I worked on personally, and I am qualified to talk about. It is the literacy target for 11 year olds. That target people said would have perverse effects because you were concentrating on level 4 of the national curriculum so people said it would not affect the level 2/level 3 boundary or the level 4/level 5 boundary. As that progress towards that target was made, we monitored whether those perverse effects did actually occur and it turns out they did not. Actually there was progress at level 2 to level 3 and level 4 to level 5 as well as where the boundary was set. When you set a target you have to remember the point I made a few minutes ago that it is a representation of reality and you still need to keep checking the reality. As you look at the waiting times targets you can anticipate what might be perverse effects and see if those are occurring. In the case of the waiting times' targets there is actually a whole range of things that you would want to check and those perverse consequences are not occurring. It is important not just to check the one line of data but to check the reality around it.
(Dr Thomson) Can I add, also, there have been other forms of targets to address; some of the concerns we would have about deprived communities, for example, communities that I have spent most of my life in. As a result of the Neighbourhood Renewal Strategy and the work done across Government in deprived areas we have devised four targets which commit us to four levels in the most deprived communities in the country for things like employment, health, education. That is another measure to go alongside targets which ensures there is no one sector which falls below a certain level. That is a huge step forward. Titmuss's first piece was centred on the social division of welfare which showed that those communities never benefit unless you make particular efforts. The Social Exclusion Unit's work demonstrates much the same. Before we could have concerns that we did not have a way of addressing it, now we have some machinery which at least allows us to target those areas in a particular way.
(Professor Barber) That is not a target I am working on.
(Mr Mulgan) That is one for the e-Envoy's Office to answer. In some ways it is a good example of the evolutionary point Michael mentioned. It is a target that was perhaps a bit too simple and steps are being taken to reach it. I do not think anyone would say that target should not be there, but what you and others are saying is it needs to be made more sophisticated and to address actual usage of on-line services. That is what one looks at next. In some ways it is a symptom of success that the argument moves on. This is true of all targets. They are not magic wands, they are not perfect, they can have distorting impacts. What is important is we learn quickly and we spot if there are any unwanted side-effects and we keep updating them and re-thinking them and ensuring they are about what really matters, and are not some proxy for what matters.
(Dr Thomson) I have not recently looked in detail at the statistics on Oldham, but many local authorities in the country are still working their way towards anything above level two on the Commission for Racial Equality's Code of Conduct. I think I need to check on that particular one to see how Oldham is doing.
(Dr Thomson) The overall judgment of a council must be its relationship to its population. One of the expectations of Best Value is that they regularly consult and survey and poll and discuss with their community how they are doing. I have been in Oldham and I would think that the people who were working there were quite aware of some of the issues that were coming up. They are not easy ones to tackle. Measurement is only one device amongst a whole range that you could use to judge how they are doing. I do not think you could say that was necessarily a perverse incentive because you cannot achieve some of those overall goals unless you have a good working relationship with your community.
(Professor Barber) I want to reinforce that last point. Even though my job is monitoring the implementation of key targets, it is very important to make clear that targets, however good and however much focused on the priorities, are not everything, it is not what the whole of government is for, it is not all it can do. You are all well aware of that but in that case adjusting the targets does not necessarily represent the full-scale range of things that need to be resolved in Oldham - culture, relationships, trust, equality, other issues related to the targets.
(Mr Mulgan) It is very important that we understand that they are tools to support judgment; they are not substitutes for judgment. The heart of the job of a Minister or an official is to make judgments in often quite complex, quite uncertain situations. Good targets make it easier to make the right judgments but they are not a substitute.
(Dr Thomson) I recognise the syndrome you describe. I think you will find that it was a subject of one of the PIU's early works which was looking at how you can join up some of those efforts. One of the impacts of that study was creating the Regional Co-ordination Unit and one of its early tasks was looking at the area-based initiatives. There was a lot of concern by Cabinet to rationalise what are nearly 40 different streams of area-based initiatives. The last check I made on this a couple of days ago showed that they are very close to achieving quite a reduction in those numbers as well as a general rationalisation plan and the other ring-fencing that was promised as a result of the Local Government White Paper. It is not easy once you have set these things up to rationalise them but there is a very deep commitment to do so. A great deal of work has begun on that. That was in the past. One of the positive things with the future is that most of the action zones have been wound into the Neighbourhood Renewal Programme and the single capital pot is now a much more flexible way that both local government and regional government have available to them to deploy on projects, so that some of that much more close-knit funding allocation and project monitoring (which I know quite well from my experience) is now allowed.
(Dr Thomson) You were making the point about the area-based initiatives and on that there is certainly progress being made. There are also, as I am sure you will be aware, many freedoms and flexibilities that were mentioned in the Local Government White Paper which were promised and have now been taken forward in the Local Government Bill which was published at the beginning of this month. So there is quite a long list running to three or four pages of new freedoms and flexibilities associated with the Act.
(Dr Thomson) I did not say we had solved them, I said we had improved it. I would not claim that we had solved it.
(Mr Mulgan) Those are all questions of balance and I do not think we would claim we have solved them. There are still many areas where there are too many funding streams and different accountability arrangements, time scales and so on. One of the jobs of parts of the centre and of the Office of the Deputy Prime Minister is to try and take an overview of how those are experienced on the ground by local authorities and local organisations, which often find them very burdensome in terms of management time to cope with. As Wendy said, quite a lot of progress has been made. We have the Local Strategic Partnerships bringing these different initiatives together. We have a much clearer role for government regional offices in acting as co-ordinaters, again cutting out bureaucracy. Right across government it is now recognised that cutting paperwork and bureacracy within the public sector is as important as cutting bureaucracy was in the private sector back in the 1980s and 1990s, and is key to effective delivery. In all of this, as I say, one has to strike a balance because departments legitimately want to pursue individual policies which may make good sense in their own terms. They have to be balanced in terms of the overall impact that has on an individual local authority. That is a balance we need to strike. Most of government is still organised in vertical structures and probably always will have to be to be effective. It is the balance between that and taking a horizontal overview, whether it is over cross-cutting issues or capacities to respond at the local level which is the key thing. I do not think we could claim that this issue is solved, I do not think it will ever be solved. What is important is that it is much more clearly recognised as an issue than was the case a few years ago.
(Professor Barber) If I can give two or three examples of where there is increasingly effective inter-departmental collaboration. The Sure Start initiative is a very good example of it. There is a growing and I think very promising collaboration between DCMS and DFES on school sport. On the Government's street crime initiative there is a big contribution from a whole series of departments to progress in that area. There are growing examples quite specifically of the things that Geoff is talking about.
(Dr Thomson) I would add, also, on the local government front, work that has just recently been agreed by the Central Local Partnership to have a set of agreed national priorities for services across local and central government. This was welcomed by the LGA. It is going to be reflected in the national PSA which will then be the basis of the local public service agreements that local authorities have advocated for themselves. This year we anticipate having a more focused set of targets for that agreement which has been negotiated across government departments and with local government. It will not solve everything but it is an improvement. On the same lines joint inspection and auditing arrangements have been introduced across local government, since I was last here.
(Dr Thomson) One of the programmes that I mentioned to you when I was last here has been taken forward now which is a systematic approach to the issues that you are raising. We have been designing the features of the high performing organisation that departments now need to resemble in order to deliver in today's climate. We are working with departments to see how well they can assess their own capacities and constraints against those features of what a really good organisation will be like. We are working with three departments on this programme. It is a very practical way in which the people involved in those departments can be clear what skills are required individually and how they need to work together differently in order to create a change of culture. Any kind of culture change with a workforce like this is going to be led by the clarity of purpose which attracts people to the public service. That is one of our greatest assets with which we must work. I do not think it is a question of identifying people and what we are going to do with them. It is just clarifying the purpose of the modern Civil Service, helping people find practical ways of getting themselves up individually and practically to achieve those things. Sometimes it requires bringing in external supports from wherever is necessary to skill people up. This sort of departmental programme, which we completed in one department and are mid-way through in two others, we will be publishing the results of later on this year. It works on the development side of the delivery agenda and works alongside the work that Michael has been doing which focuses on specific areas and gearing those areas up in a much more focused way. The two work together.
(Professor Barber) I think what Andrew Turnbull said to you last week about getting a combination of outsiders and career civil servants is important. In our case we are all relatively recent arrivals in government. I just want to put on the record that in none of the departments that we are working with have we come across any civil servants who have been obstructive at all. On the contrary, the commitment to delivery is very high. There are some who do not have the skills as a team or as an individual and in that case we can address that. In some cases the framework around which people have been trying to work to deliver has been improved as well. There is no lack of commitment to delivery.
(Mr Mulgan) The culture has shifted remarkably quickly on this and this new batch of fast streamers entering the Civil Service want to work in delivery jobs. They have got the message that is the route to progression, not the Ministerial offices, not spending all their time in Whitehall. I think that is a hugely valuable step in terms of the culture and it has happened much quicker than I would have expected.
Chairman: It is interesting to have you say that. Gordon?
(Professor Barber) Where shall we start? I would not want to give the impression of anything other than collaboration. My view is that in June of last year when the three units were established, that was a big step forward, for the reasons we have been discussing in the last half an hour or so. Andrew's reorganisation of the Cabinet Office is a logical progression. So we have one step forward and this is the logical next step forward. I think we have worked very well together and we look forward to working together even more closely in the future.
(Mr Mulgan) I was going to say, you can have a very simple organisational structure which is full of factions, infighting and conflict, and you can have a quite complicated structure which actually works very well together so long as the individuals are very clear what they are trying to achieve, have a shared sense of purpose, communicate well with each other and work well with each other. That is the case with us, we all like each other and know each other quite well. I think it is a good model and the structures do not matter all that much. We could have lots of different structures and organograms but so long as we get those basics rights it will work and it will deliver. I welcome very much the fact that Andrew has signalled that his style of management is going to be in a sense building on that and making the centre perhaps work even more corporately than perhaps was the case in the past.
(Dr Thomson) I take it as him signalling the commitment he is making to reform very much a focus. It is a unique characteristic of the time at which he is joining and the task that faces this Government and the commitment it has made. I think it will enhance our capacity to work in a focused and strategic way.
(Mr Mulgan) One of the lessons of any thinking about the future is Sam Goldwyn's comment that it is unwise to prophesy especially about the future. The serious point is that our job is not to say "This is what the world is going to look like in ten years' time" but to help people think through what it might look like, what some of the challenges might be and some of the things which governments have not thought about. If you look back ten or 15 years, not many people thought that during the 1990s we would have a civil war in Europe, half a billion people would be using the Internet. Not many people thought that the US would be a boom economy, Japan would be in a slump, and a lot of what our work is about is getting government and Ministers more ready for a very unpredictable and very uncertain future and more focused on ensuring that the strategies they are pursuing, the policies they are pursuing will work in a variety of different environments not just assuming that the world will continue as it is.
(Mr Mulgan) There are all sorts of things we can be fairly certain of which will be big challenges for any government in ten or 15 years' time around knowledge, education, human capital, a more open global economy, adjusting to demographic change, new science, new health and so on. There is a fair amount that can be known about the likely future of different towns and cities. There is a lot of research work which does precisely what you just described there, trying to identify which places or regions are most likely to grow fastest, which are the ones which are likely to face problems. It is not our job in the centre specifically to be looking across the map of the UK and making predictions about different areas. I think that is a good example of where government does need to build up and improve its capacity to spot challenges on the horizon. One of the things which we felt was by the mid-90s that capacity in British Government had become very thin, thinner than it had been 20 or 30 years ago, which meant that often things happened that were experienced as crises or as shocks when they should have been prepared for. This Government has tried to build up capacities to avoid that happening. We are one of them and the Civil Contingencies Secretariat in the Cabinet Office is another one focused on more specific disruptive challenges that the UK may face. I think many of the departments are now building up their own capacities to look ahead, to think through different scenarios that the future might bring rather than just muddling through or acting day-to-day or just responding to events. I think this has to be good for the country, it has to be good for Government that a long-term perspective is brought to bear complementing the focus on delivery and implementation as well.
(Professor Barber) Coming back to what is nearer to the present, in the delivery planning we are asking departments to manage risk, to think about risk management, which is the short-term of the longer term that Geoff is talking about.
(Dr Thomson) And in the work we are doing we expect departments to recognise this as not just policy making but essentially having the forward strategic capacity within their own operation. That is the way of the future.
(Mr Mulgan) It has not been published, but it should be coming out fairly soon.
(Mr Mulgan) Earlier in the year we published a very extensive interim report from the project on ethnic minorities in the labour market which if you have not seen it, I will send to you and recommend. I think it is the most detailed, thorough analysis of what is a very, very complicated picture of the economic experience and performance of different minorities in different regions, very different experiences often between men and women within different minorities. It was trying to bring a much more sophisticated and nuanced view of the situation than perhaps had been the case in the past. We are now working through the policy implications of that analysis. As I say, I hope we will be publishing the results of that fairly soon.
(Dr Thomson) I do not think it is lurking. It came to the end of its cycle just this spring and we are in the process of finalising its final report. When Ministers have considered it, it will be published. We are doing extensive work, as I think you can see in the notes that I submitted, with departments on customers. The People's Panel has shown its success in spearheading what now is becoming normal mainstream government business which is asking people quite extensively what they think of the service they are getting and what they would like in the future.
(Mr Mulgan) We have been doing a review on risk in government which is in its final stages and which is trying to address and bring together some of the issues that Michael and Wendy have mentioned about how to bring a more systematic approach to the management of risk into the public sector. Some of that is about specific projects, big IT projects and programmes where I believe there was a fair case that there was not sufficient risk management in the past and this became quite costly for the public purse. There is a range of other issues, including risk to the public, and how we manage what is said to the public about issues like MMR or other risks of that kind. We have tried to bring that together looking at what is best practice in business, in other governments around the world. This is an issue that is being looked at in detail in Australia and Canada and many other governments and there are important lessons we can learn from them. We are looking at what that implies in terms of processes within departments and training, which would be the focus of your question, so that it becomes much more part of the general development of all civil servants that they understand risk and how it is managed in both senses of the word, both anticipating or planning or preventing negative risks but also, where appropriate, taking positive risks where there is a potential gain for the public sector in doing that.
(Professor Barber) First of all, we do want to reduce waiting times and we also want to improve health outcomes and the Department of Health has priorities, for example, in relation to coronary heart disease and cancer outlook which are straight health outcomes as well as reduced waiting times. One of their big challenges over the next phase is building up capacity both in terms of the physical infrastructure but also staff and a range of different means for doing so are being built into their planning and taken forward. The PFI programme is part of that build up of capacity, it is a programme that seems to be delivering improvements in capacity in exactly the way that we would want.
(Professor Barber) I am not in a position to comment area by area but overall the hospital and in fact wider health service capacity has been built up very significantly over the last few years and the build up of capacity is accelerating over the next two to three years.
(Professor Barber) That level of detailed question would be better directed to the Department of Health. There is no doubt at all about the overall progress in terms of developing capacity, both human capacity and physical infrastructure.
(Dr Thomson) And there are new ways of doing things. Capacity does not always have to be in the same form, so part of the developments Michael was describing also includes PFIs, things that are not just building things that are hospitals but diagnostic treatment centres, walk-in centres and new forms of health care that are more convenient for the patient as well as more economic.
(Professor Barber) The number of nurses working in the health service has been growing very significantly over the last year, the data shows that in the Department of Health's statistics.
(Professor Barber) Retention in all of the public services needs to be considered. You do not want a zero turnover, you want some turnover, but you should always be looking at retention of staff as well as recruitment of them. In terms of nurses, recruitment and retention are going rather well at the moment.
(Dr Thomson) It is one of the areas that we are looking at because it is such an important strategic area for a public service that this would be a first choice career for more young people as they are seeking jobs, undergraduates coming through. There is evidence over a very long period of time that it is less often a first career choice for graduates. That is a trend that I think with this recent commitment to investment and reform and expansion of public services we can expect to see reversed.
(Professor Barber) I was at a conference of NHS chief executives three days ago and they certainly welcome the focus on delivery in the health service, they certainly welcome the sense that they are part of a national transformation of the health service, and they certainly conveyed the impression to me of rising to what is an immense challenge ahead following the Budget. That is the background. The reforms that Alan Milburn announced at the time of the Budget about setting up an independent commission which is going to publish a report, not just nationally but area by area, go to the heart of what you are saying. That is his anticipation of that. All the evidence we get when we check the health service data against, for example, Audit Commission data which exists on the health service as well, suggests that the data certainly at a national level is pretty reliable and that people are very straight-forward about the data that they are putting in.
(Dr Thomson) Because they were found really. The Audit Commission does audit the figures within a given health trust and the NAO does it at a national level. Obviously when one or two cases are found they are a cause of public concern but the fact that they are found reflects the fact that there are quite extensive systems to identify them.
(Professor Barber) I think the changes in the way that the data is going to be collected and presented that Alan Milburn has announced will help but I would want to emphasise, as Wendy has, that we are talking about a very small minority.
(Professor Barber) You disguised your example extremely well so it is quite hard to comment on precisely what your example represents there. When there is a big process of transformation and change going on in any given service, and I will disguise it as well, you are going to get different views, different perspectives from within the service. What I was answering was the question from John Lyons about the reliability overall of the national data and the value of targets in delivering outcomes and - this is important as well - enabling the Government to be held to account for the expenditure of public money in a way which is making progress or otherwise against these key objectives.
(Professor Barber) You do not really want us to give you the addresses of our offices? That is the problem of thinking what details to provide. We see each other a lot. We have access, as my colleagues said, to the Prime Minister from time to time. We are going to be part of Andrew Turnbull's team. We will build on the informal team that has been working very well that Geoff described a few minutes ago. I think that the team will be a very strong team actually meeting very much what you said in your report in April 2001 for the Cabinet Office remit. The reform post is not another bit of line management on the organogram it is off to the side because that is what Andrew Turnbull wants to lead on personally. I think he described that to you last week. I think that we will be a strong team with a much clearer remit driving forward delivery and reform in all the different ways that we reflect that.
(Dr Thomson) I think the structure outside government is a fairly common one. If you look at the centre of a lot of modern organisations you will see a strategic capacity, performance management capacity, HR, organisation development capacity, some sort of partnership function. ICT is probably the most strategic resource for the service sector, the retail sector, at the moment. It is a pretty common structure really. It may not have been in the centre of UK government but I think it is probably present in most big corporations and probably in a lot of governments.
(Dr Thomson) The specific responsibility that Andrew Turnbull has taken is for Civil Service reform and my office will be leading on public service reform and ensuring that the relationship between those two is an effective one.
(Dr Thomson) We (myself and Professor Barber) share an office in No.10 and we share a building across the road so we are fairly co-located if you are really interested in it.
(Dr Thomson) Until the next Cabinet Office accommodation strategy which you know as well as we do is a pretty continual process.
(Mr Mulgan) We do not have quite such wonderful accommodation as this. It is the case that bits of the centre are dotted around Whitehall. My team is in Admiralty Arch. Thanks to walking distance, e.mail, meetings and so on co-ordination happens very well. I think it is about as simple a structure as you could imagine for the heart of something as complicated as a government.
(Mr Mulgan) If you look in detail at the structure of government in the 1940s it was incredibly complicated.
(Professor Barber) During the war when Attlee was Deputy Prime Minister they fixed the price of fish daily from central government. It was a very different era with an awful lot of centralised control in a way that was quite different from now.
(Mr Mulgan) Micro management.
(Professor Barber) That is true. That mentality of planning and organisation flowed through, as you very well know, in the late 1940s.
(Dr Thomson) I think Andrew Turnbull's paper makes clear the way he sees the role of the centre of government supporting the Prime Minister and the Cabinet and that is the key role of the centre of government.
(Mr Mulgan) It has been suggested there has been a big change here but I do not think there has. In my case, previously I reported to the Prime Minister through Sir Richard Wilson, now I report to the Prime Minister through Sir Andrew Turnbull. There is no change of the principle there. The Cabinet Office continues to support the Prime Minister and the work of Government as a whole.
Sir Sydney Chapman
(Professor Barber) That is not quite an accurate account of what occurred. The e.Envoy's office existed before, the OGC existed before, the function that Alice Perkins will head on human resources and so on exists now. What Andrew is doing is bringing those functions together around the corporate structure which, as Wendy said a few minutes ago, is very close to what major corporations and other large organisations, like local authorities, have in their management structures. There is no creation of new units in Andrew's proposal, what there is is a step forward in the co-ordination of a set of existing functions.
(Professor Barber) I will answer and then Geoff will come in on that. There is no doubt that the challenge of delivering health care at the level of quality that people have come to expect is a huge challenge ahead of the National Health Service but all my learning about that over the last year would suggest that they are really beginning to put the reforms in place, they are getting the capacity to deliver established, they are making progress on delivery. You asked for an honest judgment. I think they are doing a terrific job and there is every reason to expect that they will rise to that challenge over the next three or four years and we will see the difference.
(Mr Mulgan) This has been an area where there has been rather a lot of serious blue skies work in the last year or two: Derek Wanless looking at demands on the health service, Adair Turner working for the department and the Strategy Unit looking at the other side of the coin in terms of supply. Rightly or wrongly, the pretty clear conclusion has been reached that changing the structure of funding is not the answer which some people think it might be and is neither desirable nor necessary to deliver the health outcomes which the Government and the public want. That said, there is a great deal that can be done to improve the way in which the Health Service works, all sorts of new ways of using technology, using IT, better diagnosis, better prevention, better public health, all sorts of things which could be done to deliver better outcomes but essentially within a comprehensive, universal structure.
Sir Sydney Chapman: Obviously we are all thankfully living longer, I am told, and there are going to be more and more new treatments invented and introduced, very expensive ones, and matching that is a higher demand for better service. I certainly would not call it from the sublime to the ridiculous but surely it was realised pretty quickly that the targets made - I am sorry to talk about targets but they are important - on waiting lists was a pretty disastrous commitment for the Government to make, was it not? Not because whether or not it was achieved but whether or not it was achieved the whole Health Service was skewed to try and deliver the right answer. Many people on both sides of the House were pointing out at the very early stages that it is not the waiting lists, but the waiting times. This is not trying to score political points but just to say who sets the targets? Obviously the politicians set them and they set them to achieve them so they actually set pretty modest targets. Am I being too cynical to say that?
(Professor Barber) I think the Government has actually set itself a range of targets, many of which are very ambitious actually. I think I would say that you are being too cynical when you say that, yes.
Sir Sydney Chapman
(Mr Mulgan) Yes.
(Mr Mulgan) As I said earlier, Mr Chapman worked in the PIU, was very useful to it and is on record as saying that the work he did there on resource productivity and energy was an absolute model of how policy should be done, very analytical, very evidence based, very open and very strategic and using people like him - outsiders - to provide advice. The heart of his pamphlet - which I wonder if people have read - and some of the commentary on it does make you wonder whether it has been read, is a rather serious proposition about how policy makers should use systems thinking approaches to understand the complexities of the modern world. I would actually commend it to everyone to read. They are certainly methods which we have tried using in our own work to understand complex policy issues. There are one or two sentences in the whole thing about central units and the ones you quoted which do not have much relationship to the rest of the argument and on which we could have an interesting discussion. I actually think the bulk of what he is writing about is more interesting than that and more important for government and quite a challenge to a Civil Service and policy makers, most of whom were not brought up with any of those skills and tend to therefore see things within a single discipline or within a single silo or without a sufficient number of dimensions.
I actually encouraged him to write the pamphlet, I may say, so I feel some responsibility for this.
(Dr Thomson) Even if the reports were accurate and they may not entirely be, I have also read the pamphlet, some of the ways that are being described as working are actually the very ways that we are bringing to government. The idea of policy being delivered through to the public as a sort of end-to-end process that depends on complex systems is exactly the approach that we are taking working with departments. To help people understand that you do not look at institutions, you look at how policy will be delivered to the public through to the front line and that is done through systems. We do it by talking to people who work in those systems. Our work has been based on hundreds of encounters with people who are actually providing public services and we set up regular surveys with them. Even were the accounts to be accurate I think you could safely say that the way these approaches are being introduced in the centre of government is quite different.
(Mr Mulgan) Not to labour the point, in our projects we talk to people who are involved in delivery on the ground and involve them in project teams, we try to see the whole thing as a system, rather than acting as a small group sitting in an ivory tower in Whitehall dreaming up solutions and imposing them on a passive set of people involved in delivery, which sometimes was perhaps the model in the past. I think we have moved far beyond that.
(Professor Barber) I have not read the pamphlet but I would like to confirm that the Delivery Unit has not rewritten a single departmental policy during its existence and it does not intend to do that. What we do is help departments with their capacity to deliver. I am confident that if you talk to the Secretaries of State or the Permanent Secretaries from the departments we work with that they would endorse that view.
(Mr Mulgan) Can you repeat the question, I did not quite catch that.
(Mr Mulgan) My apologies if our editing quality has declined. We are trying to make all of our reports shorter, amongst other things. We have just had some visits from people from around the world who said that report is the benchmark which a number of other governments are now using to understand both the issues of data sharing privacy but also the policy solutions which arise from them.
(Professor Barber) Let me not quite answer your question. The first thing I want to say is the NHS Plan which was published in 2000, and then a further update was published at the time of the Budget, is described as the reform programme for the NHS and that is being consistently pursued and my job is to help the Department of Health and the NHS deliver successfully plan A.
(Mr Mulgan) The Wanless Review and the work which we have been doing in the Department is essentially assisting the Department. The Department developed the ten year plan. The Department has the expertise on health policy and health strategy. We, as bits of the centre, can help them, can bring in outsiders to give different insights but the underlying work of all of these reviews is done by officials at the Health Department. It is not imposed from outside. Each of these different reviews has worked very closely together. As we were saying earlier, good practice in all policy now is to have the risk management built in so you do not relentlessly follow a single plan with no contingencies, no way of responding if things go wrong. In many respects the Health Department has been well ahead of understanding that. For many years they have done much more sophisticated scenario planning, contingency work and mitigation than most other parts of government.
(Professor Barber) Let me start on this. This is a fascinating question to raise towards the end of the session and we could debate it for a long time. I recognise exactly what you are saying. One very important part of politics is that politicians, governments, make commitments to deliver certain outcomes and our job in the Delivery Unit is not to do the politics of that but, once the commitments are made on key priorities, to do everything we can to help those responsible to deliver those outcomes. Of course in the real world, however good the planning the real world will impact and politics will move on. Bringing that consistency to the priorities, to the key commitments, is our contribution to helping the Government deliver. There is a very clear connection between the politics and the delivery in its work.
(Dr Thomson) I think it is interesting that on some days the presence of such expertise is thought of as politicising the Civil Service whereas today it is characterised as technocratising it. Coming from Quebec I pride myself probably on leaning more towards the latter than the former, it is quite a strong French initiative. But anybody who works at the top of government has learned that the link between politics and management is a fact of life in the public service. Supporting what Michael was saying, being blown off course by events is probably the single greatest threat to governments, so trying to manage one's way through that with all your forward looking and risk managing capacities in place but also keeping your eye on the ball, that is bound to help politicians steer a course.
Chairman: Maybe we need a blown-off course by events unit.
(Mr Mulgan) We are servants of the government of the day. Ministers have to decide. Ministers have to respond to what the public wants. Ministers have to be ready to respond to events. Our job is solely to provide them with materials and advice, with strategies which they have to make judgments on. If we become too purely technocratic we are probably not providing very good service and we, in my unit, always have a sponsor Minister attached to every project to ensure we do not become too detached from the realities of everyday politics. Equally, our understanding of strategy is not a purely technocratic one. Strategy also involves communication if you cannot explain what you are trying to do to the people working within the public services and the wider public then it is unlikely that the strategy is going to succeed.
(Mr Mulgan) I am saying the UK starts with a very small centre. If you visit most other European countries or the US you will see large centres, many more people than there are in the heart of the British Government. We are small units working, I hope, in a relatively lean way and, as we have been emphasising again and again this afternoon, trying as far as possible to build up the capacities of departments because we operate in a departmental system of government. If we were ever to become too big, too rigid, too fixed, we would probably no longer be serving the Government as best we can.
(Professor Barber) I think Geoff is right to draw attention to that risk and we have been talking about risk management, we should manage that risk. We need to know that is a potential risk with any step forward and then avoid it. When in our tracking of the data and milestones and so on a problem arises, as problems always will in the real world, we do not say as a Delivery Unit "right, we must solve that problem", we say to the department "can we help you solve that problem" and that philosophically is crucial to avoiding the risk that Geoff draws attention to in the article.
(Professor Barber) I think you should look at the White Paper that the Treasury publishes when the Spending Review comes out.
Chairman: Could we thank you very much for that. I think we have had a very, very interesting session that has fed into a number of areas that we are interested in. I think, probably this excludes certain Members of the Committee, we are all in this together, as it were, and if it does not work we are all in the frame. Thank you very much for coming and talking to us in the way in which you have.