Select Committee on Treasury Minutes of Evidence


Examination of Witnesses(Questions 300-319)

RT HON GORDON BROWN MP, MR ED BALLS, MR NICHOLAS MACPHERSON AND MR ADAM SHARPLES

THURSDAY 18 JULY 2002

  300. Whose judgment is it that 87 per cent have been met?
  (Mr Brown) The departments have got to publish reports.

  301. Do you think it is adequate that departments are measuring their own performance?
  (Mr Brown) It is right that departments publish their record.

  302. Do you think it is right that departments should assess their own performance?
  (Mr Brown) There is a process of audit going on right across government.

  303. Is it right that in the auditing of this the departments judge for themselves that they have met their own targets? That is pathetic.
  (Mr Brown) Much of the auditing is independent. As you know very well, there is the National Audit Office that looks at how departments are performing—

  304. They do not look at this, do they? The departments are stitching it up and making judgments on their own targets. Is a joke, is it not?
  (Mr Brown) You would be reflecting on the failure of the select committee system if you said that.

  305. The Select Committee will want to come back to this issue, Chancellor.
  (Mr Brown) Let's be clear about this. There is a complete misunderstanding on your part about the process. The data that is produced by departments has got to be audited by the National Audit Office.

  306. There is no misunderstanding here at all. What is going on is departments are evaluating their own performance. Let me take you to one department in particular, which is the Home Office, to look at this in detail.
  (Mr Brown) You cannot mislead the other members of the Committee on this. As far as data is concerned—

Chairman

  307. The nature of this exchange does not help the shorthand writers.
  (Mr Brown) It is audited by the National Audit Office. We have an independent system of audit which is in many ways the pride of Britain in relation to financial systems around the world and it is an independent system, and you are wrong to mislead people on that.

Mr Ruffley

  308. The Committee will want to comment on this itself. Let me turn to how you are judging these PSAs to one department which is the Home Office—
  (Mr Brown) I think that is a matter for the Home Office.

  309. The scrutiny of the purposes to which the Home Office puts the money from you is a matter for you as well. You said that in 1998—
  (Mr Brown) I said to you it was a matter for the Home Office to publish its departmental reports.

  310. That is not my question. You should have waited for my question. So far, according to Parliamentary Answers from the Home Office, they have missed 11 out of 16 targets. In spite of that, in the latest Spending Review you are giving them a real terms rise of 5.6 per cent a year, so you are rewarding Mr Blunkett for failure, are you not?
  (Mr Brown) Are you saying that the conclusion you reach is that no more police officers are needed because the conclusion that we have reached is that more police officers are needed?

  311. I am merely following through from what you said in 1998 when you said you would monitor closely how departments are proceeding, and if they failed on their targets you might hold back money. You are doing the opposite of that. A department that has cocked it up big time, worse than any other department, is being given a 5.6 per cent real terms rise in spending. It has been rewarded for failure basically.
  (Mr Brown) That is absolutely wrong. The Home Office is agreeing and implementing a very big programme of reform. It is as a result of that programme of reform that it is possible to give them additional resources for the next few years. For example, in relation to the police there is a Police Reform Bill going through the House of Commons. There are the basic units, command units, which are getting far more flexibility but also far more resources down to them so that they can do the necessary things. As far as the Home Office generally is concerned, you had the announcement of the Criminal Justice Reform White Paper yesterday by the Home Secretary. There have been major reforms agreed in the asylum system. The idea that there is not a process of reform in the Home Office to justify the resources they are receiving is completely wrong.

  312. I am surprised that you seem so happy with the Home Office's performance when it has been deliberately tight. Let me ask you one final question. In your latest set of Public Service Agreements that you published with the spending statement on Monday where you list these out by department, at the end of the Home Office's section it says "Who is responsible for delivery?" and it says the Home Secretary is responsible for delivery. What happens to the Home Secretary if he does not deliver against the targets that he has been set? Is he going to get sacked? Dock his pay or something?
  (Mr Brown) The Home Secretary has initiated a vast programme of reform.

  313. What happens if he does not deliver?
  (Mr Brown) That is a matter for both the Prime Minister and for the electorate. The important thing I think you should accept is that in the light of what we have known about the way the asylum and immigration system is working, the criminal justice system is working and also the reforms which were needed in the police system, there is a major programme of reform under way to justify the additional resources which are needed.

Mr Tyrie

  314. Is there any level of failure to perform on the Home Office's target that might have led you to alter the 5.6 per cent real terms increase? Any level at all?
  (Mr Brown) Again, your point seems to be that the public should somehow suffer through having less police, that we are not meeting all our objectives. Surely the important thing is to bring in a process of reform which guarantees that the public will get the best service.

  315. The answer is clearly no. There is clearly no connection between what you began with when you said "Well, of course, the influence we have on it is we write the cheques" and these targets. They are completely disconnected.
  (Mr Brown) Mr Tyrie, once again, I do not quite see where the proposition you are making leads you to. Are you saying your conclusion would be that we should not finance the police service? What we need to do is make sure the reforms in the police service or in the prison service or alternatively in the asylum and immigration service—and these are the reforms that the Home Secretary is proposing—are put in place to deal with problems which arise. That is exactly what is happening. I told a previous questioner, also, that as far as performance related arrangements are concerned, that is a matter in terms of permanent secretaries' pay and of course there is far more performance related pay than in the past, and that is another process which is working within departments.

  316. Yes. It is flattering that you have asked me questions. All in good time, Chancellor. Just for the moment—
  (Mr Brown) I think you have first got to persuade your own party.

  317. That is also very flattering. We have not yet found any answers. What we really want to know seriously as a Committee, and we have discussed this privately, I am not breaking any rules by saying that, is whether these targets have depth and meaning. So far we have not been able in exchanges we have had on this Committee to find any depth or meaning to them. They seem completely disconnected from the Spending Review.
  (Mr Brown) I think this would be a terrible mistake on the part of the Committee to draw that conclusion having two years ago drawn a completely different conclusion.

  318. We are learning.
  (Mr Brown) The National Audit Office reported in March 2001 and said "The introduction of public service targets and in particular the move to outcome focus targets. . ." which is what we are talking about today ". . . is an ambitious programme of change which puts the United Kingdom amongst the leaders in performance measurement practice." It would be in my view a very bad mistake on all our parts to conclude that the targets which have been set are wrong in principle because it is the one way that departments focus on the results that are necessary. It is leading to a very big process of public sector reform which I thought the Committee would want to welcome and targets are being achieved, for example in primary schools and in the health service and in other areas, and leading us to be more ambitious in the future about what we can achieve with public money.

Chairman

  319. Chancellor, I understand that. We are not at variance with you on that.
  (Mr Brown) That is not what Mr Tyrie said.


 
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