Examination of Witnesses (Questions 40-59)
SIR GUS
O'DONNELL
6 FEBRUARY 2007
Q40 Mr Prentice: It is interesting
that you say that, because you told us when you first came before
us you wanted policy-making to be evidence-based.
Sir Gus O'Donnell: Very much.
Q41 Mr Prentice: The famous mantra
is, "We do what works", and yet, if you survey the terrain,
there are a lot of things happening that do not seem to be working.
Is it the case that the major re-organisations that we are going
through in the Health Service, that we are about to go through
in offender management are evidence-based, or is it just acknowledging
the ideological prejudices of the people running the Government
at the moment?
Sir Gus O'Donnell: It is a very
fair question in the sense that there are certain areas where
you have got a strong evidence base where somebody has done something
like that before and you can look at it and work it through, and
various areas where it is more difficult (for example, there are
not many NHSs around the world) and then you are imposing changes
on them, restructuring, moving towards different methods of delivery.
You have not got a strong evidence base against which you can
say, "We know precisely what works and what does not",
so in that sense it is more difficult.
Q42 Mr Prentice: The current restructuring
of the NHS is not evidence based. The NHS is going through a huge
transformational change with the private sector coming in, in
a really big way, and there is no evidence base for this that
it is going to be more efficient or effective or whatever?
Sir Gus O'Donnell: I think there
are certainly examples on the reconfigurations. If you talk to
the clinical experts, they will say that these are ways of improving
health outcomes by concentrating specialist resources in key areas.
In terms of bringing independent providers in, I think there is
clear evidence that that is reducing waiting times and, in various
areas, again, producing better health outcomes.
Q43 Mr Prentice: As we bring the
private sector into the NHS in a big way will the NHS be open
to European Union competition law, single market rules?
Sir Gus O'Donnell: The honest
answer is I do not know.
Q44 Mr Prentice: When are we going
to see the Capability Review for the Department of Health?
Sir Gus O'Donnell: It will be
in the next tranche.
Q45 Mr Prentice: Which is?
Sir Gus O'Donnell: This one will
finish about April, so it will start in May.
Q46 Mr Prentice: The Civil Service
has been convulsed at the moment out of a strike. Why is it that
the hundreds of thousands of people working for the Civil Service
do not share your vision or the Prime Minister's vision and feel
so frustrated, so unable to change and influence things that across
the piece they are striking?
Sir Gus O'Donnell: There is only
one union gone on strike.
Q47 Mr Prentice: But they represent
320,000 members?
Sir Gus O'Donnell: Yes, but there
were not 320,000 members on strike, I can tell you that.
Mr Prentice: Touché.
Sir Gus O'Donnell: Less than half
of them, a lot less than half of them. So, no, I made my view
clear that I thought this was the wrong way to operate. The FDA,
for example, did the same. I think what they did was counter-productive.
I strongly make the point all the time about the great things
the Civil Service does and the fact that we deliver services to
the least advantaged groups in society, and anything which damages
that I worry about. I think this is not the way forward. I agree
there are challenges that the Civil Service is operating under
now. We are reducing numbers; we are improving efficiency; I am
challenging them to do better, but every time I go out around
the country—I was in Blackburn last Friday seeing DWP offices
there—I am amazed by how proud and passionate they are about
the work they are doing and how professional they are. These were
people at the front line of getting incapacity benefit people
back to work, a really good policy which is actually very evidence-based
and is starting to help some very, very disadvantaged groups.
Q48 Mr Prentice: Is there not a mismatch
between the language that you are speaking, the language that
the Government speaks and the language that the union (the PCS),
however many of the members were out on strike, were using? I
give you this example just to locate it. When the Prime Minister
appointed Hilary Armstrong to be the Minister for the Cabinet
Office after the election he did a little minute to all the ministers,
and he said, "In many areas of public service delivery the
third sector has the potential for better user focus, better reach
and better outcomes than the state", and then he went on
to say, "Within a year you"—that is Hilary Armstrong—"should
have achieved a step-change in the provision of public services
by social enterprises, charities and other third sector organisations,
particularly in areas such as offender management, children's
services, health, employment services and community care".
So there is a huge amount of state provision that the Prime Minister
wants to see floated off to these third sector organisations.
When we had the Public and Commercial Services Union people in
front of us they talked in their memorandum, and they told us
from where you are sitting, that the Government's policy is to
"fragment, to privatise and outsource the work of the Civil
Service", and that is what is causing this erosion in morale.
So there are two lexicons here.
Sir Gus O'Donnell: The lexicon
I use is the lexicon of pride in what the Civil Service does and
the Civil Service operating—hence we had the first ever
Civil Servant of the Year Awards towards the end of last year
celebrating the successes—and I try and do that whenever
I can around the country. It is certainly true (the point you
made) that the Prime Minister is very strongly of the view that
the Office of the Third Sector, which is now within the Cabinet
Office, hence the letter to Hilary Armstrong, should explore the
extent to which charity and voluntary sectors can help reach those
very difficult to reach groups where they may have strong links.
The area I saw, I guess, is when I went to Wormwood Scrubs and
the charity and voluntary sectors who are working with prisoners
to help them re-engage in the community afterwards. They have
ways in that probably ordinary civil servants do not have, and
I think it is perfectly reasonable to think about how you can
find the best ways of using the charity and voluntary sectors.
Q49 Mr Prentice: We are not talking
about changes at the margin here. The Prime Minister in that minute
to Hilary Armstrong was talking about the transfer of major state
provision to the third sector. Ian went off to the Passport Office
to have a look, and a number of the rest of us went to Jobcentre
Plus down in Clapham Common.
Sir Gus O'Donnell: Excellent.
Mr Prentice: It is excellent.
Sir Gus O'Donnell: It is a very
good office.
Q50 Mr Prentice: You have been there
as well?
Sir Gus O'Donnell: It is close
to home, but not recently, I have to say, just because I get my
other third sector colleagues interested.
Q51 Mr Prentice: We had this private
session with the staff, upstairs, door locked, management outside,
just us talking to the civil servants, and they were telling us
about their concerns for the future and someone said to me that
she thought there was a possibility that the work that they do
for people with disabilities could be just floated off to a third
sector organisation, and what she was saying about that particular
aspect of work other people were saying about other aspects of
work. So, how can you build positive morale in Jobcentre Plus
when the people working there, who are doing a good job, think
they may no longer be working for the Civil Service in a year
or two but could be working for Age Concern, or whoever?
Sir Gus O'Donnell: I think it
is a fact of life that people will look at different ways of supplying
services, and if we are talking about the disabled, I think what
will be at the centre of the Government's desire is to give the
best possible service to disabled people; and they will look at
different ways of doing that, that is inevitable. I think ultimately
we have got to do this from the point of view of helping those
disadvantaged groups and what is best for them. What you are saying
is we should somehow organise this to be best for the producers
rather than the consumers.
Q52 Mr Prentice: I am not a producer-ist,
and who am I to say this, but I sense that if you are going to
change organisations in this kind of way you try and bring people
with you, and it is clear in the Civil Service you are not bringing
these—
Sir Gus O'Donnell: I disagree.
Let us look at the facts. People are desperately keen to join
the Civil Service. Our fast-stream is always in the top five of
where university graduates want to come. We are doing incredibly
well in terms of attracting more diverse groups. Outside of London
and the South East we have actually got areas—and this is
one of the reasons where you might pick up dissatisfaction—where
people really enjoy working for the Civil Service.
Q53 Mr Prentice: So much so they
want to stay in the Civil Service?
Sir Gus O'Donnell: Absolutely.
Exactly. So when we are making efficiency gains and the numbers
are falling, they are disappointed by that because we are a very,
very good employer and we just have to cope with that. It does
not mean somehow they are not enjoying or being passionate about
their job. It is that they want to keep it.
Q54 Mr Prentice: The people we saw
were very positive, very committed and they wanted to stay in
the Civil Service. One final thing, picking up from what Tony
asked you at the beginning about re-organisation of government
departments. We have got some reorganisations that do not cost
a bean: the Office of the Deputy Prime Minister becomes the Deputy
Prime Minister's Office. I think that cost £600. Then we
had the Department for Productivity, Energy and Industry. Do you
remember that one? That was just a bit before your time.
Sir Gus O'Donnell: That was before
my time.
Q55 Mr Prentice: It is fun to say
this though. Downing Street said this was necessary in order to
make the department refocused and reinvigorated, but Alan Johnson
disagreed and the sign came down, so that did not cost anything.
Then I was thinking about the reorganisations that must have cost
an arm and a leg, and one example is the Department of Transport
became the Department of Transport, Environment and Regions, became
the Department of Transport, Local Government and Regions in 2001
and now is back to being the Department for Transport. There has
been a lot of transporting going on in that department. I have
no idea how much these cost. I put a question to the Prime Minister,
and he said the cost of machinery of government changes are met
by relevant departments within existing budgets. That is what
he said just a few days ago. My question to you is what is going
to be the cost of reconfiguring the Home Office, because it is
going to be met within the existing budget?
Sir Gus O'Donnell: Indeed, because
basically departments have got their spending totals set out,
we would have to meet it within existing resources. I do not think
the Treasury would accept a reserve bid on a machinery of government
change. I am fairly sure from my previous existence that they
would not. Therefore, it is incumbent on us to make sure that
machinery of government changes produce lasting benefits which
outweigh any transitional costs.
Q56 Mr Prentice: Finally, we do not
know, it has not been costed, how much the changes that were floated
by the Home Secretary would cost.
Sir Gus O'Donnell: Like I say,
I am still looking at the issue of what potential changes there
might be. That has not been decided.
Chairman: Thank you very much for all
of that.
Q57 Julie Morgan: Just to return
to the strike briefly, many of the PCS members in Wales who were
on strike last week are very enthusiastic, very committed civil
servants, very proud of being civil servants and they believe
some of the efficiency reviews are going to damage the more disadvantaged
people that you said earlier the Civil Service must reach. What
are your views on that?
Sir Gus O'Donnell: I very strongly
believe that we should be making sure that we do meet those disadvantaged
groups. In terms of making sure that we organise our services
efficiently, that is a key part of why things are in the public
sector, because, as I said before, I think the private sector
would say, "They are too difficult to get at, too hard to
reach, so we will not do it." I do not think there is a trade
off between being more efficient and worsening services there.
This is where I think I have my fundamental disagreement. I think
we need to increase our efficiency. If you look at the kinds of
things that can increase efficiency: the process of re-engineering,
for example, of Revenue and Customs, looking at why a piece of
paper has to go round a very long journey inside a building, why
you can make the pensions agency provide a much better service
to customers working through contact centres, than it could when
it was doing things in a much more expensive way, so actually
I think improving quality of services and becoming more efficient
can go very much hand in hand.
Q58 Julie Morgan: I think a considerable
number of civil servants do not believe that. Have you any thoughts
of rethinking this? Are there civil servants who enthusiastically
support that?
Sir Gus O'Donnell: There are,
and actually the best efficiency gains you get, the Pensions Agency
up in Longbenton was a classic example of this where it was not
people like me from senior management coming down saying, "Here
are the new methods of doing things more efficiently", absolutely
not; it was doing what you have said: lock them up in a room,
get the people who are actually the front-line deliverers and
say to them, "Look, how could this be better? What is stopping
you doing this more efficiently, providing a better service to
customers?" They are the best ideas you get, and getting
people's energy, their commitment, their passion, getting them
to tell you how to do things better—"What are the obstacles
that management have imposed?"—actually produces enormous
efficiency savings and allows us to provide better services.
Q59 Julie Morgan: An additional problem
we have in Wales is that where the jobs are going, some of the
jobs are from Objective One, where we are trying to invest, and
so I wondered if you had any thoughts on that?
Sir Gus O'Donnell: We are very
much, from a Civil Service point of view, trying to relocate jobs
outside London and the South East. The classic would be ONS, which
is coming to Wales, which is going to transfer a very large number
of jobs to Wales. The whole process of moving out of very expensive
places in London and the South East to areas like Wales, where
they can be done more efficiently and better, is something I would
strongly applaud. Within Wales, I am not getting down into that
detail.
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