Select Committee on Treasury Minutes of Evidence



Examination of Witnesses (Questions 260-265)

MR RICHARD DOUGLAS, DR PETER DRURY, MR ANDREW HOLT AND MR DUNCAN EATON

WEDNESDAY 23 JANUARY 2002

  260. Let me understand this: if the OGC one billion pound value-for-money target is across all central civil government activities by 2002/3, you do not have a specific target within that?
  (Mr Holt) No.

  261. Really? So what would, in policy terms, your assessment be of a pretty good performance to contribute to that global one billion value-for-money target? What kind of figure are you looking at departmentally?
  (Mr Holt) Around three per cent but I expect it to fluctuate from year to year because we are a small department, and some years we will have one major transaction.

  262. Where does the three per cent come from?
  (Mr Holt) This is an expectation. This is the first year we have measured it in this way so I have not been able to assess exactly how to pitch it.

  263. I am just trying to understand this. If the OGC hand down from on high, as it were, a one billion pound value-for-money target, what I do not understand is how you, as departmental policymakers, decide what your contribution to that is going to be. It could be you decide that you cannot really make many value-for-money savings and, if every department does that, what leverage has the OGC on any department who performs poorly and does not make any contribution at all, or a negligible one?
  (Mr Douglas) The main leverage they would have with us is in looking with us at the procurement procedures. Rather than looking at the figure itself, what they would say is, "If you were doing this, you would be saving this amount of money", and we as managers should act on that. That is where it comes from. It is people identifying things we can do rather than focusing too much on saying, "This should be your target figure".

  264. So you do not have a specific target from the OGC or, to put it this way, not so much a target but have you had any indicative figures where OGC have said, "We think your value-for-money improvements should be to the value of X pounds"?
  (Mr Holt) No. This is the first year of this exercise—

  265. I understand that but I am just trying to work out what you are working to. You are telling us that for your own benefit you are just saying 3 per cent but that is something you have made up, as it were. It is your discretion to decide what you want to do and it is 3 per cent rather than 5 or 2 per cent?
  (Mr Holt) Yes. Obviously one would look forward to the sort of procurements we are in and the sort of advice we are given to see how one might reach that target in the future.

  Chairman: We will leave it there; thank you very much. You have promised us a note on a few points today so we will hear from you. Thank you very much.

 


 
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