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However, before the Secretary of State for Children, Schools and Families gets too happy about that, let me say that the Committees most recent report, which will
be published in the new year, points to some concern. I totally disagree with the right hon. Member for Chingford and Woodford Green (Mr. Duncan Smith), the former Leader of the Opposition, and his talk of the broken society and an underclass. Such language gets us nowhere. I hate the terminology and I think that it gets in the way of evaluating what is happening in our society. It is true that some people suffer from social deprivation and a long-standing lack of good employment prospects, but the situation is dynamic and people move in and out of it. There are problems and challenges, and all parties have to find ways to ensure that every child gets a chance to fulfil their real potential. Sometimes that will be through the academic route, and sometimes through an apprenticeship, training and skills route. Thank goodness, we are achieving provision, especially for 14 to 19-year-olds, that is beginning to address all the talents.
We should also give talented people the chance to move easily between disciplines. In a sense, what was wrong with the Education Act 1944 was that people stayed on one track; if they were academic, they went to grammar schoolthat was their future. People who went to secondary modern school had little chance of getting requisite skills, while those who lived in areas with technical colleges went down a different route again. The apprenticeship provisions in the Bill that we will consider later this Session will ensure that 14 to 19-year-olds have access to a range of potentials.
Finally, I want to say something about child development. One of the great things about a Select Committee is that we can take a cross-party look at very difficult subjects. We can take conventional wisdoms and the sort of street knowledge that people pass on without much research and gather evidence to see whether they are right. Most of us will have been troubled by the oft-repeated research that asserts that a childs potential is more or less decided by the level of stimulation that it receives up to the age of 22 months. If that is true, it poses a great challenge to everyone interested in the future of this countrys children.
I remind the House that 22 months is about the age of little baby P when he died. If that stimulation is so important, are we making the right decisions to ensure that the right environment is provided for all children? Of course, we have come a long way already with early years provision. We have childrens centres and Sure Start, and children aged three now get 15 hours of free nursery care. All of that is good, but you will know, Madam Deputy Speaker, that child care is still expensive in this country. The challenge is to provide good, stimulating environments for children as early as possible. Income levels should present no bar to that, but at present they do limit what is provided for very young children aged between nought and three. We are not doing a bad job and I do not want to castigate the Secretary of State or the Government, but we must do even better because that is the crucial age.
I advise the House that my Committee will call evidence on levels of stimulation and the development of a childs brain. We want to establish how accurate the research to which I referred earlier and the conclusions based on it are.
The hon. Gentleman is right that the evidence shows that the investment has to be made in the early stages of a childs life, so does he agree that the Government should abandon their gimmick of the
child trust funds? Billions of pounds are tied up in them, although 18-year-olds get a payment of only a few hundred. Should we not spend that money on early-years education, because that will make a difference to peoples life chances?
Mr. Sheerman: I am sorry, but I rather like the child trust funds. Earlier, the Liberal Democrat spokesman, the hon. Member for North Norfolk, spoke about tobacco. Along with other hon. Members, I campaigned for many years on the smoking and tobacco issue. We were trying to change the culture associated with tobacco use and smoking, and that meant that we had to tackle advertising, education and every aspect of trying to get people to stop smoking so as to improve their health and development. The same is true with child development. We must try everything, but the Queens Speech is absolutely right that we have to eradicate child poverty.
For that reason, the child trust fund is one of the essential ways in which we will change childrens life chances. No approach can work immediately, and the child trust funds are a long-term investment. Over five or 10 years, we shall be able to see whether they work. Many of the policies that we have embedded over the past 11 years will take a long time to evaluate. Over time, I think we shall see that child trust funds are very useful indeed.
This will be my last point, because after criticising a previous speaker, I am going on for far too long[Hon. Members: Yes.] I am sorry, but normally Back Benchers, even Select Committee Chairmen, have to listen the Front-Bench lot and are then restricted to 10 or 12 minutes, so I am speaking up for Back Benchers. There is no limit today, so I am taking a little longer than usual [ Interruption. ] I shall go on for even longer now.
I shall end on the point about culture. We are trying to change cultures and it is difficult. It has to be done in terms of tackling child poverty and in a variety of ways. Some of the things we do will not worksurprisingly enough. We are human beings so sometimes our responses to problems will not work or will not work as well as they should, but then we learn the lessons. Over the past few years, one of the things I have liked is that often when the Government recognise that something is not working too well they change it. Sure Start is a good example. Some of the Sure Start schemes were not very good when they started. I have to tell Members who like localism that it was often because the impetus was too localisteverybody came up with their own ideas and some of them did not work, so Sure Start had to be changed. As long as the Government continue to make pragmatic judgmentsseeing whether things work and recognising that sometimes there are mistakesthey will have my support. On the other hand, when they do things in a bone-headed way and carry on regardless, they will not have my support or that of members of our Committee.
Much in the Queens Speech will give us plenty of work over the coming months. There are some interesting interventions and innovations for the qualifications framework. The Secretary of State must make sure that the framework is independent and seen to be independent so that it can speak fearlessly about the qualifications system. People will approve of that.
The very last thing I want to say [ Laughter. ] In that case, the penultimateor rather pre-penultimatething I want to say is about apprenticeships. Only last Saturday, our Committee produced a report on apprenticeships. It was a good experiment, because the Select Committee on Innovation, Universities, Science and Skills was producing a pre-legislative report on the draft Apprenticeships Bill at the same time. We did not collude, but we came to similar conclusions. We are positive about the apprenticeship route and about the expansion of apprenticeships. We are concerned that the targets will not be met, because as the economy is going through a slight hiccupI shall not use the other wordand the tough times mean that the private sector will be challenged to produce enough apprenticeships, the real challenge will be to introduce them in the public sector.
The largest employer in my constituency is the universitythere are not many apprenticeships there. Health and the local authority are among the biggest employersthere are not many apprenticeships there either. The sooner we can have apprenticeships in every part of our public sector system, the better. If we can achieve that, the Secretary of State and the Government will have my support.
Mr. Edward Leigh (Gainsborough) (Con): It is always a pleasure to listen to the hon. Member for Huddersfield (Mr. Sheerman) for half an hour. I know that he is irritable, because the last time that I questioned in the Liaison Committee the saviour of the world, otherwise known as the Prime Minister, the hon. Gentleman shouted across the Committee Room, Who does he think he is? I do not think that he was referring to the Prime Minister at the time. So I will try not to irritate him, and he might agree with quite a lot of the early part of my speech, because I want to talk about efficiency.
As the parties get less ideologically divided[Hon. Members: Ho, ho!] It is true, actuallyefficiency becomes more and more important. We heard a bit of banter between Front Benchers earlier about their public spending plans. The truth is that, if there is a Conservative Government, they will not want to do less in health and education, but they will want to do it more efficiently. I give credit to the Government, who want to do things more efficiently as well, but whether they succeed is, of course, a matter for debate.
Efficiency figured very large in the pre-Budget report and in the spending review. The Government claim that they want to deliver efficiency savings of a massive £35 billion. As Chairman of the Public Accounts Committee, I have often questioned whether they will actually achieve that, but I have never disagreed with the objective, which is even more important in health. We heard the Secretary of State for Health mention that he is increasing spending by what sounds like a very healthy 5 per cent., but given an ageing population and the increasing costs of health technology, unless we can achieve efficiency gains of 3 per cent. every year, that is just a standstill budget, so efficiency is absolutely central to what we are talking about.
I want to go further than in the past, and I believe that we could achieve more efficiency. True efficiency is about achieving the same outcomes for a lot less spending.
That is about the absolute, resolute and obsessive pursuit of efficiency, line by line, programme by programme. It may be a rather boring subjectit is not often at the forefront of political debatebut it is absolutely essential. Let us make no mistake: if we do not achieve massive efficiency savings, we will face armageddon in our public services.
David Taylor: The hon. Gentleman says that efficiency is a boring topic. Certainly to an accountant such as myself, it is meat and drink and not boring for a moment. He says that efficiency is all about getting the same outcome for less inputI paraphrase him slightlybut does he not agree that there are circumstances in which to spend more is, first, to get a better quality of service and, secondly, therefore to have a lower cost per unit of production? Earlier today, I pointed out to my right hon. Friend the Member for Swansea, West (Mr. Williams), who is Chairman of the Public Accounts Commission, that Her Majestys Revenue and Customs reorganisation, which with the hon. Gentleman is very familiar, risks losing people who might have bridged the enormous gap between the tax that should be collected and the tax that is collected after tax avoidance. That is the case, is it not?
Mr. Leigh: It is true that, at certain times, people make policy decisions and have to spend more, which may indeed achieve their policy objective. Of course I accept that, which is why I do not want to talk about policy differences in a lot of my speech. I want to try to bring the Government and, indeed, Conservative Front Benchers with me as far as possible. I do not believe that it is the duty of an Oppositioncertainly not an Opposition Back Bencherto oppose everything and propose nothing. So I hope to make some practical suggestions about how we can improve efficiency.
The Chancellor recently raised the bar on efficiency savings by another £5 billion, which is quite a difficult task. My call might not be strictly within the rules of poker, but I see his £5 billion and want to try to help him raise another £5 billion. Let me give some ideas, not for cutting services, but for encouraging all the major Departments to match the greatest progress made by their most efficient colleagues in five core categories of efficiency. Let us look at all the Departments and at who does things most efficiently, to try to bring the rest up to that level of efficiency.
Item 1 on that five-point agenda for efficiency is the civil service pay bill. It is true that the Government have made some progress in reducing numbers in some Departments, but not in reducing staff costs. A reduction in numbers running to tens of thousandsI agree that it has been achievedhas been accompanied by a real-terms increase in the pay bill of more than £1 billion. If all Departments matched the greatest staff reductions achieved in Whitehall, the saving to the public purse could be a massive £1.7 billion. Of courseI will mention this nowthe new contract for general practitioners is an example of a Department implementing new arrangements that have increased, rather than reduced, inefficiency. Partners in GP practices are now putting in less time and their productivity has decreased; only their pay is burgeoning, having increased on average by 58 per cent. since 2003. I think that we all recognise that major mistakes were made in that contract, which we never want to see made again.
On the subject of staff costs, are the tasks of Whitehall Departments really so different that, apparentlywhat the NAO tells me is extraordinarythe average civil servant in one Department can cost almost 60 per cent. more than the average employee in another? I know that Departments perform different tasks, but it seems extraordinary to me that we have such a range. If we could bring the most costly and the least efficient up to the level of the least costly and the most efficient, we could save another, staggering, £800 million.
Outsourcing and consultancy form my second item. Consultancy is often discussed. It seems to me scarcely credible that any part of Government could have consultancy expenditure equivalent to even half its staff costs, let alone the 87 per cent. of staff costs spent by one Department, but that is apparent by analysing last years accounts. The average central Government body spends five times more on consultants per employee than the private sectora whopping £10,000 for every civil servant employed. Is that necessary? Do we need all those consultants? We have very good civil servantsthey are there in the Box. Although we are not allowed even to refer to them, they are fantastic people doing a great job.
When the NAO reported on the use of consultants, it concluded that efficiency gains of up to 30 per cent. could be achieved without reducing the underlying value of the work purchased. The NHS spent £600 million on consultants last year, when the public sector as a whole spent £2.8 billion, so the saving could be as much as £800 million a year.
Let us take a long look at other running costs, such as the costs of accommodation, leases and IT, which provide the third item on the agenda. I offer the Government and the Opposition a further £900 million saving. I hope that my hon. Friend the shadow Chief Secretary to the Treasury reads my remarks todayI am happy to help anybody, Government or Opposition, with these ideas.
The startling variation in accommodation costs for each individual civil servant provides clear scope for improvement. When the NAO examined this matter in 2006, it found that the Department of HealthI mention that Department, because we are talking about it todayspent nearly three times as much per person as the then Department for Education and Skills. Today, the Secretaries of State for Children, Schools and Families and for Health have been sitting side by side in the Chamber, so perhaps we should ask them to explain the difference between their Departments spending. I do not understand it.
Perhaps the Government should consider extending their shared ownership schemes to their Departments, so that they learn lessons from each other. London property prices may not be what they were, but all of us here represent provincial constituencies, do we not? Are we sure that every civil servant currently based in the capital would not be better employed at less cost in our own communitiesin Huddersfield, Gainsborough or, indeed, North Norfolk? Why are so many still based in the capital?
The House may need to bear with me as I go through the next item on my listcomparisons of asset values. As an accountant, the hon. Member for North-West Leicestershire (David Taylor) will be interested in this subject, but the eyes of other Members present may
glaze over, but it is a fantastically important subject. The Government aim to dispose of £30 billion of assets, but even though last year their main Departments got rid of approximately £1.5 billion of assetswell donethey managed to add a hefty £10 billion of assets. That so often happens in public debate: we hear the good news, but not the bad. I salute the Ministry of Defence, which achieved the highest level of disposals in Whitehall, and the Department of Health did pretty well, too. If others had marched forwards as far, another £850 million would have been captured by all of us.
According to my rough calculations, so far we have identified savings of £4.8 billion and counting. In search of the final big push that would enable me to keep my promise to try to save the Chancellor £5 billionno small sumI considered those Departments that make grants. The Departments that are the subject of todays debate figure heavily among them. A recent National Audit Office report made recommendations to help grant makers better manage the demand and flow of applications, and streamline their processes. A saving of 10 per cent. as a result of greater efficiency in grant administration across the public sector could plough £220 million back to the Treasury. I have now achieved, just in one short speech, savings of £5 billion.
I freely accept that efficiencies are not certain; there are problems with information, challenges in delivery, and variations in circumstances, so we could undershoot, or indeed overshoot, on all those five items. However, surely that is not an argument for the abandonment of the agenda; it is an argument for adding to it. To try but fail is honourable; to fail to try would be criminal. That is why I think that efficiency should be a central part of what we try to do. My challenge to the Government is to take inspiration from Mr. Micawber. It may not be fashionable in these Buy now, pay later times, but the Governments accounts book should be reviewed, entry by entry, in a concerted effort to alleviate the misery of spiralling borrowing.
In debate after debate on the work of the Public Accounts Committee, I have emphasised three broad themes of which the Government should take note in their forensic self-analysis. I start with unnecessary administration. The private sector has long focused on minimising the proportion of resources that it invests in administrative functions, so that it can focus on what delivers value for the customer. It is essential that the public sector take that approach. That can be achieved both by cutting down the complexity of administration and by sharing the management of administrative services. We hear a great deal about that problem in the NHS. Every time that we talk to our doctors and consultants, and people whom we know in the NHS, they harp on at us about the cost of administrationa vital point. We should listen to them all the time.
My second theme is commercial skills and astuteness. The role of the Government is changing from one in which they delivered most public services themselves to one in which they manage other organisations that deliver services on their behalf. No matter who wins the next general election, the process will go on and on. The Government will withdraw more and more from the front line and will use other people to manage their services. Government will become ever more commercial.
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