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In those circumstances, the delivery of services is underpinned by commercial arrangements, so the Government need to improve their ability to manage contracts. We have to employ the best people and pay them the right price. We should bring them in from the City and the merchant banks to work for us. When it comes to private finance initiatives, new contracts or hospital running costs, we have to get the best people working for us and pay them the best price, which pays in the long run.

Frankly, the public sector still lacks the commercial nous to derive maximum benefits from its suppliers. Take one well-known example in the education field. The interest of celebrity chefs in school dinners has helped to draw attention to one small specific area of procurement. We looked at the issue and showed that there was scope to realise over £200 million of efficiency savings in food procurement in just one year, by 2010-11. More than half of those savings could be achieved in schools and hospitals without affecting quality. Ultimately, actions such as joint purchasing could help to avoid situations such as those that we found at the time of our investigations. For instance, we found that one public body pays 32p and another £1.10 for the same loaf of bread.

I come to my final theme: making better use of resources. The Government do not always manage the vast array of resources in their control, including office buildings, service delivery and agents, as efficiently as they should. Earlier this year, the National Audit Office published a report on managing financial resources. It found that since 2003 Departments have indeed improved their management of finances, but, incredibly, that 40 per cent. of them invariably provided decision makers with a full analysis of the financial implications of policy proposals. It is amazing that in only 40 per cent. of cases in which Ministers make difficult policy decisions they were told about the financial implications of those decisions. The message must be driven home that the management of financial resources is the responsibility of everyone in the Department, from the Secretary of State down, and not just the central finance team.

The Government need to know what is being spent, where and on what, and I hope that there is a central emphasis on everything that Ministers and their top civil servants do. They need to know whether one Department pays more for the same service than another, and they must embrace, not avoid, comparisons of cost and performance across the public sector. Departments must benchmark all the time with other Departments, and they must look at what is going on abroad. They must always seek to do the most efficient thing, and pay people to work for the public sector and Ministers to get the best results.

All those disciplines should apply to the Government’s proposed programme. The aim of government is not to legislate at any cost—the Government are clearly not doing so, as we are not overloaded with legislation, and I congratulate them on that—but when the costs and benefits are totted up, how many of the proposed Bills would help the fastidious Mr. Micawber to obtain happiness by balancing his affairs? We should look at all those Bills and ask how they will achieve happiness by balancing our financial affairs.

If the House will allow me, I shall propose one final test to be applied to all the Government’s proposed legislation. It is simple: does the proposal reduce the
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overall burden on the public purse, and is it efficient? That legislative impact assessment should be policed, perhaps by the House, with more rigour than the Government have put into their own regulatory impact assessments. If the answer to the question is yes, the Bill should be allowed to proceed to further debate. If the answer is no, it should be allowed to go forward only if accompanied by an equal saving elsewhere. Now is not the time for either the cost or the burden of government to grow, because we simply cannot afford it. I urge all public bodies to keep at the forefront of their thoughts the fact that taxpayers and all those who use public services rely on them to get this right. Given the storm-tossed state of the public finances, the success or failure of programmes to achieve true efficiency in the public services will have a major impact on all our lives.

If the House will forgive me, before I conclude may I make one or two policy points? In everything that I have said so far, I have spoken as Chairman of the Public Accounts Committee. I hope that what I have said is not politically sensitive and that Members on both sides of the House agree with it. However, from my own personal perspective as a Back Bencher, may I make one or two points? This is where I fear that I may lose Government Members, but the debate offers an opportunity to express one’s point of view, so why should I not do so?

Yesterday, the Prime Minister, without telling me in advance—fair enough; all is fair in the House—attacked me on the Floor of the House, so I could not pop up and put the record straight. May I now make clear my point of view that the Government have made a major error in seeking to solve our economic problems by cutting VAT at a time at which prices in the shops are falling through the floor? The point that I made, not as Chairman of the PAC but from my own personal perspective, was that the best way to help the poor is by raising tax thresholds to get people out of paying tax altogether and to attack the poverty and unemployment trap.

Norman Lamb: The hon. Gentleman is supporting Liberal Democrat policy.

Mr. Leigh: It may be Liberal Democrat policy—what do I care? If I see a good policy, I will embrace it—but it is also the policy of many Conservative Members of Parliament. There is nothing original about this, as there are many people on the left who believe that the best way to help the poor is not by cutting VAT, because a much higher proportion of poorer people’s budget is spent on items that do not attract VAT in the first place. That is the point that I made, but I was quoted out of context by the Prime Minister. However, it is much better to be attacked by the Prime Minister than not to be mentioned at all, so I do not mind very much.

May I make two brief points about education and health? The report by Sir Jim Rose was published this week—another report on education—and seeing that my hon. Friend the Member for Surrey Heath (Michael Gove), the shadow Secretary of State, has just walked into the Chamber, I shall make an appeal to him. Often, we on the right are accused of being too obsessed by the structures of education, and it is said that while we have been obsessed in that way, the left has been more concerned about the minutiae, and that it has won the debate. Let me say straight away that I am not the
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slightest bit interested in returning to the 1950s, in having more grammar schools or in any of that. All I say to Sir Jim Rose and to all those on the Government and the Opposition Front Benches who think that they can micro-manage the thousands of schools in this country is that they are deluding themselves. We have to trust our professionals; we have to trust head teachers.

I know a bit about education—after all, I have educated a few children in my time. I believe that head teachers want to have the freedom to set their own curriculum as much as possible, to hire and fire their staff, to interview potential pupils and to select their own pupils. I know that I start to lose everybody in the Chamber when I say this, but if they were given the same freedoms that independent schools have, there would not be a rush back to grammar schools. Most schools would hardly change at all. My son went to a comprehensive school; I have never sent a child to a grammar school. I am not interested in that, but I am interested in allowing the head teacher of my son’s comprehensive school the ability to manage the school in the way he wants. He should not be micro-managed all the time by the Department, and he should be able to interview and select, if he wants. If we did that, it would revolutionise schools.

I know that I do not take everyone with me on that, and I shall go one step further and lose virtually everyone in the Chamber. I believe passionately that we have to end the totally rigid divide that we alone have in this country between the private and public sector. It does not happen elsewhere. We have to encourage people to shift between the public and private sector. We have to have people who are setting up new private schools. We can bring that process in slowly, starting with reception classes, or start the process in some postcode areas. We should do what the French do. The French pay staff salaries in private schools, so fees in private schools are minuscule in France compared with—

Mr. Chaytor: Will the hon. Gentleman give way?

Mr. Leigh: I was hoping that I would incite the hon. Gentleman to intervene.

Mr. Chaytor: Surely in France the vast majority of private schools are state schools under any other name, because they are Catholic schools that are financed by the state. The idea that the French definition of a private school is analogous to the British definition is absurd.

Mr. Leigh: I am not saying that the system is exactly comparable, and I know that many parents in France use private schools because they want their children to have a Catholic education—that may be the same here. I am not arguing for a sudden revolution, but a gradual change.

I know that my hon. Friend the Member for Surrey Heath, the shadow Secretary of State, agrees with that. He has been very innovative. He has looked at what is happening in Sweden, and he will come up with ideas to make it easier for people to set up private schools. All I am asking is why it is considered to be so wrong and reactionary to break down the rigid divide between the state and the private sector in education. I have never understood that, and if we can find ways of being
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innovative and of helping people to break down that divide, we should. If I cannot take the hon. Member for Bury, North (Mr. Chaytor) with me on that, can I at least take him this far—please do not go on with this process of trying to micro-manage our schools on the curriculum? The people involved are professionals and they know what is best. Rely on parent power: if head teachers do not deliver what people want locally, people will not want to send their children to those schools.

I say the same thing about health, and again, I know that I will lose people on this issue. Why do we have a rigid divide between the public and private sector in health? My family and I rely completely on the national health service. I have no private health insurance, but if a retired person, after paying tax all their life, wants private health insurance, I do not see why they should not be given tax relief on it. The last Conservative Government did that, and it is simply fair. If people are denied a particular medication because it is too expensive and they want to top up the cost from their own resources, why should they not be allowed to do so?

As with education, I believe that we should not try to micro-manage the national health service. We should rely on professionals and on their good judgment. Increasingly, we should step back and set budgets—the Government are doing that through foundation hospitals—and proceed apace, relying on the professionals to run hospitals in the way they think best. However, I will not take the House with me on many of those things.

Mr. Kemp: I have considerable sympathy with the earlier remarks that the hon. Gentleman made in his capacity as Chair of the Public Accounts Committee. However, I am slightly confused about one thing. The earlier part of his speech was about the Secretary of the State and others in Departments ensuring that we get cost-effectiveness and efficiency in public services, which is right. Yet, in the second part of his speech, he has argued that the Government should not micro-manage education and health. Surely, there is an inherent contradiction between the two: if we are going to get real value for money, it has to be led from the centre, and it follows that we cannot allow complete independence and freedom from Government control of health and education.

Mr. Leigh: I do not think that that follows. Let us remember that much of what I said was, for instance, about the efficient use of asset management and the roll-out of computer systems. What is increasingly happening in relation to health, for instance, is that the Government say to hospitals, “We will pay you through the primary care trust so much per hip and then you can get on with it. If you do it efficiently and learn good practice, you can keep more of your money.” I pay tribute to the Government on that.

There is not a dichotomy between me and the hon. Gentleman on this. A grant-making body can pay so much per pupil in schools, and we can say that we will pay so much for a secondary or primary school pupil if a child needs a statement or if a body is prepared to give him a statement. I know a lot about that from my personal experience. After the school has received the money per child, it is free to manage that child in the way that it thinks is best. The same also applies to
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foundation hospitals. Once the money has been disbursed per hip, per cancer treatment, or however it is done, real scope is given to the professionals to run the budget in the most efficient way.

Siobhain McDonagh (Mitcham and Morden) (Lab): I see foundation hospitals in exactly the opposite way. Out of the 107 foundation hospitals that have been set up, there are more than 1 million members. It seems that we are getting more public involvement from outside than the more mainstream trusts, rather than simply letting the professionals have their way in foundation hospitals.

Mr. Leigh: That may be a good point. Perhaps the principle behind foundation hospitals is right, but we have not implemented it in the right way. The Minister has heard the hon. Lady’s intervention, so perhaps we will learn from that practical experience.

Whatever the House might think about those ideological differences, I hope that we all agree that we have to be much more commercially astute in the way in which we operate our public services. Whatever side of the argument we support, we must ensure that we are committed to our public services and that we make them as commercially efficient as the private sector. There is no reason why that should not be done, and if we do it, we will achieve much more for our constituents.

3.58 pm

Mrs. Sharon Hodgson (Gateshead, East and Washington, West) (Lab): I am delighted to be able to speak in the debate on education and health in response to the Gracious Speech. I spoke in the debate on the same subject last year and much has happened since. I am not only a member of the Select Committee on Children, Schools and Families, but parliamentary private secretary to the public health Minister. I will not be able to talk in detail on health matters because tradition dictates that my new role prevents me from expressing my strong support for steps to remove point of sale displays for tobacco products. It also prevents me from welcoming steps to help cut the cost of having cancer by making prescriptions free for cancer patients. It most certainly means that I am not in a position to say how welcome it is that the Department of Health has shown a clear commitment to the health of our children by putting forward joint funding for pilots of extended and universal free school meals. As I have always said, I came here to break the mould.

Health issues are pertinent to my constituency. For example, in the Sunderland metropolitan area, life expectancy is 18 months below the national average and death rates from smoking, heart disease, strokes and cancer are all above the national average. I am enjoying my new role, but I want to make it clear that I am acutely aware of the priorities for health care in my patch and that although my public voice on such matters may be diminished—

Madam Deputy Speaker (Sylvia Heal): Order. I gave the hon. Lady some leeway, but she must now confine her remarks to those subjects about which she is allowed to talk.

Mrs. Hodgson: I shall follow your advice, Madam Deputy Speaker, and I am grateful for your patience.

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My focus today will be on education. Last year, I called for pilot schemes on universal free school meals, and in September they were announced. I also called for better provision for children with dyslexia, and I am pleased to say that we are well on the way to securing that, too. It was an honour to play my part in highlighting the need to improve provision, not just for children with dyslexia, but for all children with special educational needs. I had a privileged opportunity to steer my Special Educational Needs (Information) Bill successfully through the House, and I am grateful for the help and support that I received from Members on both sides of the House. The Special Educational Needs (Information) Act 2008 should lead to improved information on the types of needs these children have, and it is my fervent hope that this improved information will raise outcomes in years to come. I cannot let this chance go by without reminding Ministers of the need to spell out how the new powers in the Act will be implemented.

I spend so much time talking to charities and stakeholders with an interest in SEN, but a number of interests that still need attention have come to the fore. I hope that the education and skills Bill can be a vehicle for addressing some of those problems. Last year, I focused on two issues in depth and I achieved some success, so this year I shall cover more matters, although perhaps in less detail, and hope for a similar outcome. Recent answers to written parliamentary questions have said that the Government are considering the specific remit of Ofsted’s report on SEN in our schools. The sooner we know what that remit will be, the better.

It is good to see that an interim report has been published today by Brian Lamb as part of his ongoing review of parental confidence in the statementing process. As a parent of a child with a statement of SEN, I know all too well the feelings of “fighting” or “battling” the system that this report recognises. Better information for parents, better outcomes for children and a place in mainstream policy for SEN and disability issues are all vital. I know for a fact that the report is not falling on deaf ears as far as the Secretary of State is concerned.

There is a consensus among the charitable sector that we need to define types of need more clearly when we record SEN, so let us hope that the Ofsted report will examine in detail whether the current categories of recording need are efficient. There is consensus, too, that parents deserve better information about SEN provision, so let us hope that Ofsted will consider the need to empower parents to make well-informed decisions. We also know that there are similarities in the difficulties that children with medical conditions such as epilepsy or diabetes face in our schools, and it may be a smart move to ask inspectors to examine how a joined-up approach to delivering support to those whose unique physical or mental abilities create barriers to learning could be achieved.

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