CORRECTED TRANSCRIPT OF ORAL EVIDENCE
To be published as HC 1889 -i

House of COMMONS

Oral EVIDENCE

TAKEN BEFORE the

Public Administration Committee

Cabinet Office Business Plan

Tuesday 13 March 2012

Ian Watmore

Evidence heard in Public Questions 1 - 150

USE OF THE TRANSCRIPT

Oral Evidence

Taken before the Public Administration Committee

on Tuesday 13 March 2012

Members present:

Mr Bernard Jenkin (Chair)

Alun Cairns

Charlie Elphicke

Paul Flynn

Robert Halfon

Kelvin Hopkins

________________

Examination of Witness

Witness: Ian Watmore, Permanent Secretary, Cabinet Office, gave evidence.

Q1 Chair: Welcome to this session. This is the annual review of the work of the Cabinet Office. Could you first of all identify yourself for the record?

Ian Watmore: Yes, I am Ian Watmore. I am the Permanent Secretary of the Cabinet Office.

Chair: Congratulations on your appointment.

Ian Watmore: Thank you very much.

Q2 Chair: We are interested in how that is working. How has it actually changed your responsibilities?

Ian Watmore: It has added to them. I had a big role within the Cabinet Office before, in the Efficiency and Reform Group, and I was also helping Sir Gus behind the scenes on some of the internal management aspects of the Cabinet Office, like IT in the building and so on. So now I have the broader accounting officer role across the whole of the Cabinet Office. That picks up the other functions I was not responsible for.

Q3 Chair: It is about a 50/50 split, isn’t it?

Ian Watmore: We think that the function will split roughly half in support of the Prime Minister and Deputy Prime Minister and about half in support of the Minister for the Cabinet Office and the driving out the efficiency side.

Q4 Chair: So how has ERG been restructured as a result of that? Are you still in charge of ERG?

Ian Watmore: Yes, I have not restructured it at all at the moment. My approach over the whole period has been to try and recruit really good people who are leading each of the function areas and get them working together on common issues around Government. I will continue with that management model and take the broader responsibilities in my patch.

Q5 Chair: Your reporting line is to Sir Bob Kerslake. How often do you see him?

Ian Watmore: I usually see him a minimum of twice a week: once every Wednesday morning, around the Wednesday meeting that Permanent Secretaries have, and we also have a bilateral, usually every Tuesday.

Q6 Chair: Forgive me for asking these rather mundane questions but have you moved office within the Cabinet Office?

Ian Watmore: I do not have an office.

Q7 Chair: You don’t have an office?

Ian Watmore: No, I refuse to have one. I don’t believe in physical offices for managers. I hot-desk wherever I happen to feel it is appropriate to work that week.

Q8 Chair: That is what MPs used to do and it was rather inefficient.

Ian Watmore: Maybe; I would not like to comment.

Chair: At least we went to the Chamber more often.

Ian Watmore: What I tend to do is I move around and I sit with a different group in the Cabinet Office for a week. Initially people think it is a bit odd having the Permanent Secretary sitting next to them but once you carry on as normal they realise you are just another person working there. You actually get to find out quite a lot about how the operation works by being there with the staff for a week as well as hearing from them in a more formal setting.

Q9 Chair: Have you recommended this to your colleagues at the colleagues’ meeting on Wednesday morning?

Ian Watmore: I have not recommended it. What I have said is that it works very well for me and maybe it is an innovation they might want to think about.

Q10 Chair: So is Sir Bob Kerslake hot-desking in the office as well?

Ian Watmore: Bob has a similar arrangement at DCLG I think. He has an open-plan environment in DCLG and when he is in the Cabinet Office he has one of the offices very close to the Prime Minister’s infamous door.

Q11 Chair: So he is on the main floor?

Ian Watmore: Yes.

Q12 Chair: So the stories we read about him being relegated to some loft space were inaccurate?

Ian Watmore: Exaggerated, I would say. When the appointment was made, we had to manoeuvre some offices around in order to create a space for him because, as you can imagine, 70 Whitehall is a building with very few offices in it. The ones close to the Prime Minister’s door are already well occupied so we have made some adjustments and he now has a good office for when he is working there.

Q13 Chair: Is Sir Bob as near the Prime Minister as Sir Jeremy?

Ian Watmore: Yes.

Q14 Chair: How have you divided your responsibilities between you and Sir Bob?

Ian Watmore: Bob has his own job to run his own Department and he has the job of leading across all Departments on the Civil Service reform agenda. In that respect, we are one of his Departments, so at one level I am like any of the other Permanent Secretaries running a Department. We have our own agenda, our own staff and our own budget to manage. We also then have a number of people, mainly in the Efficiency and Reform Group, who regard Bob as their main client for the purposes of his role as Head of the Civil Service. So we have people like Helen Dudley, who looks after the talent management across the Civil Service for Bob, looking at all the top civil servants who might exist in any Department and who are coming up for promotion, etc. We also have the teams that are leading on the Civil Service reform agenda, headed by Zina Etheridge, who is orchestrating the crossGovernment work to deliver what Bob wants to do on Civil Service reform. So in a sense, my role, with respect to Bob, is both as a departmental head reporting to Bob but also with a team helping him to deliver his agenda.

Q15 Chair: Is the forthcoming Civil Service reform plan expected in April this year or April next year?

Ian Watmore: I think they have been quite careful not to pin it down to a precise date but the intention is to get it in May or June this year.

Q16 Chair: It is going to be May or June this year, so it has slipped a little bit.

Ian Watmore: My understanding is that the plan has always been May.

Q17 Chair: I think we were told it was going to be April at one stage.

Ian Watmore: April is a bad month with Easter in the middle of it. It is more realistic to be May.

Chair: But it is like one of those answers where it says spring, and spring becomes summer.

Ian Watmore: I think Bob has a clear plan to get it out in May, but in the end these plans are always subject to final reviews and getting the thing finished. I think it will be May or perhaps into June.

Q18 Chair: You are aware that we expressed some disappointment with the Open Public Services White Paper and felt it was very long on philosophy and short on detail and implementation. Are we going to see a bit more of how things will actually be achieved rather than just milestones and targets? Are we going to see a paper that starts to establish different processes that will actually change the way the Government operates?

Ian Watmore: That is definitely Bob’s intention. I do not know how much you know about what he has set up but he has set up five major workstreams to come together under the reform plan. I am involved with another Permanent Secretary in one of those workstreams. Our intention for our piece is to be clear about what we are trying to achieve but then have some quite precise actions about what we are going to do. It is not going to be a philosophical document, it is going to be action-oriented.

Q19 Chair: So will it include processes that will alter people’s responsibilities, roles and tasks?

Ian Watmore: That is right, yes

Q20 Chair: Will that be right down the food chain?

Ian Watmore: I don’t think we are going to sit there and specify job changes right down the food chain but we are going to create a plan that has the intention of changing the way Whitehall works behind the scenes.

Chair: We have very high hopes for this and look forward to receiving it.

Q21 Kelvin Hopkins: We were provided with a diagram of the new arrangements in the Prime Minister’s Office and Cabinet Office by Sir Gus. It is very difficult to see precisely who is the first among equals amongst the three heavyweight officials at the top: the Cabinet Secretary, Head of the Civil Service and yourself.

Ian Watmore: Can I interrupt you there? I do not see myself as the same level as Bob or Jeremy; I have been quite clear on this. I think it was an early piece of press that thought of the witty headline, "From GOD to the Trinity" and I have been trying to downplay that trinity idea ever since. My role is just like any of the other Permanent Secretaries’ roles. We have a Department to run; it has its own budget and people. What you should be clear on is that the two most senior civil servants we have in Government are Bob and Jeremy.

Q22 Kelvin Hopkins: Do you really only report to the Head of the Civil Service, to Sir Bob, and not to Jeremy at all?

Ian Watmore: Every Permanent Secretary reports to one or other of them primarily for their management purpose. They have divided the group roughly half and half, so Jeremy has half and Bob has half. I happen to be in the Bob half.

Q23 Kelvin Hopkins: Do you have any relationship with Jeremy?

Ian Watmore: Of course, because Jeremy is the Cabinet Secretary and as the Cabinet Secretary he is effectively the lead civil servant on all policy matters across Government. Therefore, Jeremy is obviously a critical figure for any aspects of policy-making for which my Department is responsible. Also, because the Cabinet Secretary has to be employed somewhere, he is employed by the Cabinet Office. He sits in the Cabinet Office and I see Jeremy a lot on matters regarding how we can help him do his job better.

Q24 Paul Flynn: As the first peripatetic Permanent Secretary, can you explain to us why you adapted this Romany role for yourself?

Ian Watmore: It is how I operated when I was in business so it is a long-term way of working. But when I came into Government I discovered it by accident; when I wanted to move the staff from two different bits of Government into a new building and introduce flexible working, hot-desking and all the rest of it, I said, "If it is good enough for the rest of the staff, it should be good enough for me." So I decided to lead on it and what I found was that not only did it create the right environment for people to do as I said but-

Q25 Paul Flynn: Aren’t you challenging the hierarchy of the civil servants who prize their importance by the size and opulence of their offices? We hear of stories of this nature.

Ian Watmore: I don’t want to comment on what other people have regarded as important to their job. I certainly don’t regard anything like that as important; I only care about what we actually do, not the place in which we do it.

Q26 Paul Flynn: The Independent reported on 28 November that the Prime Minister had asked Ministers to explain why their Departments had missed so many key targets set in their Business Plans. Is that true?

Ian Watmore: We are always under scrutiny for these Business Plan targets. In the Cabinet Office I think we have achieved about 80% of ours on time and every single one of those that is either upcoming or is under pressure we review on a monthly basis at our Cabinet Office board structures.

Q27 Paul Flynn: Could I ask the witness to answer the question? It is very simple: is it true that the Prime Minister asked Ministers to explain why their Departments had missed the targets?

Ian Watmore: Yes, he does that through-

Q28 Paul Flynn: He did do it? Just "yes" will do.

Ian Watmore: Yes, but he does it through Oliver Letwin, who is his Minister in the Cabinet Office.

Q29 Paul Flynn: It would be helpful for us, and we could get through the meeting more quickly, if you would stop using this ectoplasm of words and answer yes or no.

Ian Watmore: I am very happy to answer yes or no, Mr Flynn.

Q30 Paul Flynn: The Business Plans have been a terrible disappointment, haven’t they?

Ian Watmore: No.

Q31 Paul Flynn: The Cabinet Office had responsibility for this scheme and they missed most or all of the goals in the assessment carried out then. There were 38 actions overdue for a month or more.

Ian Watmore: Not true.

Q32 Paul Flynn: Okay, how many actions were overdue?

Ian Watmore: We missed about 17 in the last year and we achieved 80% of our target.

Q33 Paul Flynn: The bright hope of the Business Plans was that they were going to achieve a great deal. Are you saying that they have achieved it?

Ian Watmore: I believe the Business Plans have helped a lot because what they have done is-

Q34 Paul Flynn: That is not what I asked. You seem to have difficulty understanding the simple English that I am using.

Ian Watmore: I do not have difficulty in understanding the simple English. You have asked whether they have achieved what they set out to achieve and I have said yes, they have achieved a lot of what they were intended to achieve.

Q35 Paul Flynn: I am interested in if it is 100%, 50% or 40%. "A lot" is a fairly nebulous term.

Ian Watmore: The actions that have been set have all been achieved either on time or a little bit late. Therefore they have achieved their objectives in focusing Departments on those things that Ministers want to see happen. If they happen late then they have a lot of focus and they get them done. So yes, they have achieved what they set out to achieve.

Q36 Paul Flynn: The plans were set out in these glowing terms. You can tell us whether the reality has lived up to the dream. They were set out to have a common template, provided by the Treasury, comprising of sections on vision, coalition priorities, structural reform, expenditure and transparency. Has it done all those things? And did it provide local accountability as suggested?

Ian Watmore: Certainly the Business Plans achieved all of those things on your list, if I can remember them, including transparency. If part of the Business Plan actions was to achieve localism in a particular area then yes, they have.

Q37 Paul Flynn: The Institute for Government’s review of the Department’s Business Plan found that very few people outside Whitehall were aware of their existence. Have you replaced definable, assessable targets with a fog that is so incomprehensible that no one understands it?

Ian Watmore: This is a political initiative so you have to take the view of this Government. This Government felt that the previous Government had over-managed by targets. That is a public statement that they have made. They did not want to come in and set a similar target regime for this Government, and the coalition partners agreed with them. So they moved to this approach, which is to set out the actions by which they want Government Departments to be judged, not the end outcomes of those actions. That is their philosophy and that is what we are implementing.

Q38 Paul Flynn: How do we assess the value of the actions if there are no targets involved?

Ian Watmore: That is a matter for Ministers to describe in their philosophy. From my point of view, it is quite straightforward: if we have achieved the action we have achieved it, and we get a tick. There is then a separate focus on whether that action has achieved its intentions, where you have to take a whole variety of data into account. Some of that data might be spending data; some of the actions might be to spend less money. We have done that.

Q39 Paul Flynn: How does the man in the Dog and Duck pub assess whether you have achieved these things?

Ian Watmore: Unless the man in the Dog and Duck pub happens to be a member of the Whitehall-watching community, he probably doesn’t watch any of the architectures of Government, whether it is the Public Service Agreement targets last time around or Business Plan targets this time around. What the man in the Dog and Duck generally cares about, in the end, is whether the tax system is fair, whether the economic situation is positive and whether public services are delivering. I think this Government has a plan to bring all three of those to fruition.

Q40 Paul Flynn: Another plan. It was suggested that there were 38 actions overdue for a month or more; you are suggesting it is fewer than that. What have you done to chase up the delays that take place?

Ian Watmore: Every single one of them, as I say, comes up before our management committee; if there is one that is looking like it will slip we put more resource behind it. Sometimes the slippage is completely out of our control. If the target is to introduce legislation by a date and then the House of Commons legislation programme is too full so it comes four months later, there is little we can do about it except note the fact that it is going to come four months later. In other areas, it is perhaps because the team do not have the right resources, in which case we put more people behind it; it depends. We look at each one individually at every board meeting to make sure that we have either achieved it or are on track to achieve it or, if there is a problem, we look at what we are doing about it.

Q41 Paul Flynn: What information have you given to the public on how your internal accountability is working?

Ian Watmore: We publish the outcome of these on a monthly basis.

Q42 Paul Flynn: Is that in a comprehensible form that has had some reaction from Parliament and the world outside?

Ian Watmore: My understanding is that we publish this in a consistent manner across Government on a website, and those that want to read it can read it.

Q43 Paul Flynn: But they haven’t reacted in any way?

Ian Watmore: There are some people, like the Institute for Government, who have written papers on it but I would not say the general public have been ringing the phone often to complain about the late coming of one or two actions in the Business Plan.

Q44 Chair: The Cabinet Office is at the centre of Government; what mechanisms have you got for learning and disseminating lessons on a crossdepartmental basis? What procedures and processes do you have to enable different Departments to learn from each other’s Business Plans?

Ian Watmore: It depends what the topic is. If we take the areas in the Business Plans that are about efficiency we have established the Efficiency and Reform Group to lead on that across Government. If we take the actions in the Business Plans that are potentially around policy-making and the outcome of policy then Oliver Letwin, the Minister for Government Policy, now has a team called the Implementation Unit, which is working with him to drive those crossGovernment lessons across all Whitehall Departments.

Q45 Chair: So you have a very strong feel for which Departments have most effectively reduced their headcount in their administration without losing the good people but getting rid of the people that need to be got rid of.

Ian Watmore: Exactly.

Q46 Chair: So will you be producing some kind of public report on that?

Ian Watmore: We report quite regularly on the achievement of efficiency savings. The Minister for the Cabinet Office only about two or three weeks ago put out a notice to say that we were on target this year to achieve £5 billion of efficiency savings across Whitehall Departments, up from £3.75 billion last year. We explained, line by line, where all those efficiency savings have come from.

Q47 Chair: You don’t find that Departments resent the Cabinet Office opining on their internal operations? That has been the general experience, hasn’t it? Whenever I say that crossdepartmental working is endemically bad, the only people that disagree with me are Permanent Secretaries.

Ian Watmore: No, no, I do think they resent our intrusions at times. Like any organisation, if you have people from the centre, people see them as necessary but on a daily basis those people wish they were not there. That is common in Government as well as in business. The point this time around is that everybody has a common cause to save money and everybody has a common cause to save money in ways that minimise the impact on the front line. So when we are working with Departments on efficiency, we are trying to find those things that we think will save money but will not impact the front line. We have, for example, reduced the expenditure on consultancy and marketing by 70% from one year to the next. That is a massive achievement after years of it increasing. There are lots of examples where we and Departments have common cause. There will be times when we challenge what they want to do and it can be a tense relationship. Sometimes we agree with what they were going to do anyway, and other times they agree with us, but it means that we are engaging with them.

Q48 Chair: How well is it working on a scale of one to 10?

Ian Watmore: On the efficiency side?

Chair: No-on the cross-departmental working.

Ian Watmore: On the whole crossdepartmental working, I would say it is somewhere around the 6 or 7 mark. There is more to do.

Q49 Chair: What needs to be done to improve it? Do you actually need more manpower or more powers?

Ian Watmore: What we need is more time to do what we are doing, really.

Chair: That sounds like more manpower.

Ian Watmore: For example, we want Government Departments to share each other’s capabilities more than in the past. We have done some of that already, for example in putting in a new HR regime where people now have a shared approach to human resource management across Government. We want to go further and do that in other areas as well.

Q50 Chair: Do you meet resistance on that?

Ian Watmore: No, not so much resistance.

Q51 Chair: I have heard a Secretary of State say that when he hears the words "shared services", he reaches for his gun because he knows there is going to be a reorganisation, it is going to cost a lot of money and the outcome will be worse than what they had before.

Ian Watmore: The phrase, as you can tell, is toxic, to use the political phrase. What we are talking about is if you have a really quite small Department then you want the resources focused entirely upon what that Department is trying to do, not running its own infrastructure. So if we can find ways in which we can enable them to do their jobs better then-

Q52 Chair: Your Civil Service reform paper must address the six or seven and bring it up to 10.

Ian Watmore: It does. That would be the plan anyway. It is not finished but it is not negligible either.

Q53 Robert Halfon: Could I just ask you to explain what you think the difference is between targets and milestones?

Ian Watmore: As I understand the difference, a target might be something like what was set under the Blair Government to reduce health waiting lists, so it is an end result. A milestone is to introduce legislation by a date, which is an action by a date. The difference is that one is about whether activities are under way by the date at which the plan has set, and the other is whether the end result has occurred. Targets are more about the end result and the Business Plan milestones are more about the actions. That, as I say, was the political and philosophical point that the Government came in with. It did not want to run Government by targets.

Q54 Robert Halfon: On this implementation update, you have 800 community organisers. That is very good but I cannot see the difference between a target and a milestone there.

Ian Watmore: In that particular case, I think the milestone was to get 800 community organisers recruited and under training. That is a milestone because you can measure whether that has happened or not quite simply: you either have 800 or do not, and they are either training or they are not.

Q55 Robert Halfon: Can’t you measure whether a Government reduces waiting lists though?

Ian Watmore: You can, but what I am saying is that the difference between a target and a milestone is that one is an outcome and one is a process along the way to that outcome. The difference in the case of the community organisers is that the action is about getting those community organisers in place; it is not trying to measure whether they are actually achieving the results that people hope they will. That is where the localism agenda kicks in.

Q56 Robert Halfon: Could I ask you a question about public procurement? Is there more you can do to use public procurement to help with unemployment? For example, if there was a requirement for all companies bidding for contracts to have a percentage of apprentices.

Ian Watmore: In my experience, when almost every Government Minister announces a policy they want to do in their area they then think about what levers they have; beyond legislating and restructuring, one they all look to is procurement. There has been a danger in the past where procurement has been so overladen with people’s special policy requirements that in the end the core concept of value for money has been lost. This Government has been trying to strip right back to saying, "Let’s get procurement back to the basics of what we are trying to achieve". Having said that, the Government is very keen to ensure that public procurement does cause the best beneficial impact for British companies both here and, when relevant, abroad. For example, last week the Prime Minister was at a meeting of the SME community. A year previously he had said that it is the Government’s intention "that 25% of all Government contracts are awarded to small and mediumsized enterprises". At the time, a year ago, it was thought to be about 6% or 7%. A year on we were able to publish that it is now 14%, so it has doubled in a year. That is not because he inherently has a bias towards SMEs, it is because he believes that we will get the most innovative products in Government from that, which will make the Government service better, and that it is also much more likely that Government expenditure will then come into the British economy and enable those companies to then grow and employ more.

Q57 Robert Halfon: Going back to the procurement issue, the Department for Work and Pensions has a voluntary agreement with procurement companies to say that they should hire X number of apprentices. I cannot remember the exact figure but it is about 5%. That has resulted in virtually every company taking up that offer and there have been 2,000 extra apprentices in the last year to 15 months. When I asked the apprentice team in the Department for Business, Innovation and Skills about this, they were not even aware that this was in the contract of the Department for Work and Pensions. My argument is that surely, if the Department for Work and Pensions can do this as a voluntary thing-even though I favour its being compulsory, I accept voluntary-why is there not joined-up government to see that this could be brought across every Department given the crisis we have with unemployment? Why is this not something that your Department, particularly in your position, could insist upon every Department doing?

Ian Watmore: We are doing so where it makes sense to do it, particularly around construction contracts or Work Programme contracts. There are a lot of IT contracts now where we are getting the IT companies to sign up to new forms of IT apprenticeship. This is not precisely about Government procurement but I champion apprenticeships within the Civil Service. A year or so ago we had no apprentices in the Cabinet Office and I went out and said, "We are going to recruit one for my office and show what is possible." We now have something like 20.

Q58 Robert Halfon: As the enforcer, could you not enforce this voluntary contract on every Government Department that is procuring?

Ian Watmore: You have to look at each one, case by case. You have to have a trade-off between everybody putting all their policies on procurement so in the end it cannot move for trying to fit every piece of Government policy, versus what is legal, versus what is best value for money. I think that in the Work Programme example, and the other ones that I have given, utilising apprentices from these shores is a great way to spend public money.

Q59 Robert Halfon: Do you not think there is a problem when the apprentice department-the Department for Business, Innovation and Skills-was not even aware that this contract existed? Surely your job as the Permanent Secretary of the Cabinet Office should be to advise all these Departments about these contracts, to at least encourage them to have these, and to tell each Department what is actually going on.

Ian Watmore: I don’t know what the Department for Business, Innovation and Skills did or didn’t know. They have the National Apprenticeship Service under their organisation, which looks at apprenticeships across the whole economy, including the Government sector, so I cannot answer for them. But what people do know is that our Ministers, across Government, want to see procurement done quicker, so we have been dramatically shortening the timeframes, done without obstacles to small companies, to increase the approach to SMEs and to get other social and economic benefits, like apprenticeships, pulled through. That is consistently driven throughout procurement across Government.

Q60 Robert Halfon: Will you make a commitment to advise other Departments to have a look at contracts of that kind?

Ian Watmore: Absolutely, and we do already. Mandating it is a different issue because you have to decide on the individual contract, what is legal and what is not, and what is best value for money.

Q61 Robert Halfon: Will you send us whatever you are sending to other Departments?

Ian Watmore: I can give you the guidance on this. That would be a pleasure.

Q62 Robert Halfon: That would be great.

It is very important that you have got consultancy fees down. What are you doing about the huge amount of money spent on headhunters by Government Departments?

Ian Watmore: If you talk to anybody in the headhunter business, they will tell you that they have swung most of their resources away from Government.

Q63 Robert Halfon: Government Departments are still spending huge amounts of money on it.

Ian Watmore: They still use them occasionally for senior appointments, definitely. That is a tiny fraction of what used to be spent. The individual costs on an individual headhunter assignment are very modest by private sector comparisons.

Q64 Robert Halfon: Is it really necessary, given that civil servants have capabilities in their Departments, and there is the Appointments Commission and all these bodies, which could perfectly do the job of headhunters and save the taxpayer?

Ian Watmore: There are times when you are just not going to find the best candidate. To give you a recent example, my Ministers wanted us to get a director to come and lead on the whole business of mutuals and the commercial side of mutuals. What they wanted was somebody with deep commercial skills and an appreciation of the mutual environment. That is really hard to find and lobbing an advert into open space is not going to elicit the right people. In the end we chiselled somebody out, using a headhunter-they happened to be from Rothschild in this particular case-and he will join us in April. He is a fantastic recruit to the Government, and his recruitment will pay dividends multiple times over. So one headhunter fee to get somebody like that is good value for money. Using headhunters to get routine recruitment done is not good value for money. That is the distinction.

Q65 Robert Halfon: We had a senior headhunter come before the Committee who happened to have a senior human resources job in the previous Department that she worked in. Surprise, surprise: the company she now worked in was employed as the headhunter by that Department. Surely this is something you should look into: firstly, whether or not there is too much money being spent on it, and secondly, whether there is too cosy a relationship between headhunters and various Civil Service Departments.

Ian Watmore: As I have said already, the amount of money being spent on headhunters has plummeted. We are not doing what was done before, which was routinely using headhunters for routine recruitments. We are reserving them for the most difficult times when we need specialist skills. Regarding individuals moving across from one place to another, there is a whole Advisory Committee on Business Appointments that looks at individual cases and judges whether or not it is appropriate. I think I can guess which one you are referring to from previous testimony but I think that one was done through the Business Appointments process and was deemed quite kosher.

Q66 Chair: Do you think you get better value by letting that person leave the Civil Service and then work as a headhunter than if that person had been retained in the Civil Service?

Ian Watmore: I think it varies with the individual. This person chose to leave the Civil Service to pursue a career in headhunting. Government headhunting is only one part of that career.

Q67 Robert Halfon: When the Department then hires that headhunter, does that not look a little bit iffy in the eyes of the public?

Ian Watmore: It may be that it looks iffy but all I can say is that in any cases that I know of, the individuals are always cleared by the Advisory Committee on Business Appointments and once they have been cleared then, if we do a headhunter search, we use a process of procurement to buy the best one.

Q68 Robert Halfon: The Big Society Report, which I am sure you have looked at, mentioned a number of flaws particularly regarding coordination and there being too many chiefs. It suggested there being just one senior Minister responsible for the Big Society and also that, in many ways, the Big Society was not benefiting the little society, as it was the big charities and big organisations that were hogging all the contracts. Could you respond to this and give your thoughts on the Committee’s Big Society Report?

Ian Watmore: I did read the Report and thought it was a very interesting piece of work. It was a quality document and we took it very seriously as a result. The issue of the Big Society as a policy is that it is a whole-of-Government policy. The Prime Minister has personally put himself at the front of leading on the Big Society. It is not for an individual Department to drive; it has to go right through the whole cascade of Government policies. What we are responsible for in the Cabinet Office, under Francis Maude and Nick Hurd’s leadership, are the programmes that fit under the civil society umbrella and then, through the wider policy-setting agenda, through Oliver Letwin, whose job it is to ensure that policy gets baked in right across Whitehall to meet a number of Government goals, of which the Big Society is one.

So those are the two responsibilities the Cabinet Office has in particular. I think we are discharging those in line with where your Report was headed. In the end, the Prime Minister has put himself as the personal head of this because it is about the whole Government agenda, not just one Department. It is not about DCLG or the Cabinet Office; it is about all the Whitehall systems of Government working together to enable the Big Society.

Q69 Robert Halfon: How do you address the concern often voiced to us by smaller charities that actually this is just benefiting the Tesco charities, and that really the Big Society is not supporting the little society at all?

Ian Watmore: I am sure there are examples where small charities feel they have been squeezed out in a similar way to the SME community feeling it has been squeezed out by some big companies in public procurement. What we are trying to do is promote the idea of commissioning services where you commission smaller, more local services, which therefore should allow the SME community-in this case the small voluntary and community sector, VCS entities-to bid. We are also encouraging the mutuals to spin out from Government as social enterprises, which fit into this umbrella. They range from really quite small groups of staff going off to form a mutual in parts of the health and justice sector, for example, to parts of the bigger mutuals that might be coming out of the Civil Service.

Q70 Robert Halfon: Do you think that when domestic policy is legislated for, there should be an impact assessment, just as they have other impact assessments, for whether it increases the Big Society?

Chair: That is one of the recommendations in our Report.

Ian Watmore: I understand why you say that; it is obviously a sensible idea. The issue again comes back to the number of impact assessments that already have to be filled in, which, to other people, are just a bureaucratic burden. So it is about trying to get the right balance between what the relevant impact assessments are for a new policy idea versus those where somebody at some point in the past has said they must have an impact assessment on X, and so you end up filling out long and turgid documents that nobody cares about anymore. We are trying to get rid of all those burdens.

I personally think there is benefit in trying to apply the test to any policy: is it actually conforming with the Government’s agenda on localism and the Big Society? Is this going to enable it or hinder it? That is a good question to ask.

Q71 Robert Halfon: Do you think there should be one senior Minister in charge of the Big Society and get rid of all the ambassadors and so on, so there is one person who can knock heads together and make it happen?

Ian Watmore: I do not actually, because the whole point of the Big Society is that it is not a topdown programme, primarily managed by one person. The Prime Minister has given his own authority to this programme by making it a centrepiece not just of the Government’s legislation but his own political beliefs. It is then up to the whole system to respond in the ways that we are coordinating at the centre through Oliver Letwin, Francis Maude and Nick Hurd’s role. I think that is an appropriate way to do it.

Q72 Charlie Elphicke: Good morning, Mr Watmore. I hope you do not mind if I lower the tone by moving to boring things like process, money and organisation.

Ian Watmore: No, these are not boring; they are very important.

Q73 Charlie Elphicke: Let me take an example in terms of the whole efficiency and reform side of things. There is a project to change benefits in this country to a Universal Credit, with Real Time PAYE. That will necessitate the DWP and HMRC working together effectively and efficiently to actually deliver this project on time. What is the involvement of the Cabinet Office in making sure that that all goes according to plan, both organisationally and also with the IT, which might be slightly complicated?

Ian Watmore: Let me take the two parts of that. On the organisational side, there are really four pieces of Government that have to come together. You have named two: DWP and HMRC. The third is the local authority world, so DCLG, and then I suppose the fourth is the centre of Government-i.e. Cabinet Office and Treasury-that has to ensure that what is going on is appropriate. So there is a piece of governance across the whole programme, which is chaired by the Secretary of State for Work and Pensions. I sit on that, representing the Cabinet Office, Treasury colleagues sit on it and also HMRC and DCLG are on it. We look at the programme as a whole, not just its component parts. If there are issues-for example the boundary issues-between Departments, they get thrown up at this meeting and we decide how we are going to play them. As you probably understand if you have looked into the project, Universal Credit relies heavily on something the Revenue are doing called Real Time Information. Real Time Information is collecting employers’ data about all employees and making it available to DWP in real time, rather than at the end of a year.

Q74 Charlie Elphicke: That would be really easy to do because you have this wonderful computer system that already exists, which is BACS. I would have thought you could do a really great link across with that existing IT and use it really effectively. Are HMRC going to do that or are they going to rebuild the entire system and waste vast oceans of public money?

Ian Watmore: They are not going to rebuild the entire system. What they are actually doing is using the system they already use for end-of-year transfers but on a weekly and monthly basis. That was one of the areas that became a source of importance to a Universal Credit, to make sure that the Revenue were doing this right. As it happened, I spent some time with the Revenue on behalf of the Secretary of State for Work and Pensions to look at how they were proposing to do that and I judged that the Revenue’s approaches were the least-risk way of getting this in place. They do use BACS as part of the transfer mechanism.

There is a much riskier solution, which would be to change the whole BACS system, in order to be able to get the additional Real Time Information in it. That may come one day but that would have been a much higher-risk approach and likely to put not just the Universal Credit at risk but also the whole financial exchange system of the country. The judgment the Revenue took, which was to use their existing system but on a more frequent basis, was the right one.

Q75 Charlie Elphicke: Did the management of that risk mean the Revenue then spent more money than they might have done if they had gone for what you describe as a more risky route?

Ian Watmore: No, I think the opposite. I think they felt it was not just less risky but actually cheaper to do because you were reusing stuff. The concept of reuse is a good one in these sorts of environment.

Q76 Charlie Elphicke: In looking at your role in that, you then had oversight of that and effectively they have to run these things by you. You approved it.

Ian Watmore: As I said, the five groups sit together and govern it. It is ultimately the Secretary of State for Work and Pensions’ decision on what goes on in DWP and ditto in Revenue, through David Gauke, the Minister there. The role the Cabinet Office can play in those situations is to ensure and quality-assure that what people are doing is the right thing. In that particular case, I was asked to do a particular review of that. I did and I recommended back to the group that we went with the Revenue approach and the group accepted it. We also have the Major Projects Authority, which is a slightly different beast. The Major Project Authority’s intention is to look at all Government projects of a certain size, scale and importance-we have about 205 of them identified-and they have a collective lifetime value of something extremely large, like £400 billion. This is a massive series of projects, of which Universal Credit is one. Under the role of the Major Projects Authority we have project management specialists reviewing the way the projects are going, almost on a continuous basis. Any projects that get into a high-risk situation are escalated for attention. That would normally involve me and whoever the Department was-in this case DWP or HMRC. So there are two kinds of-

Q77 Charlie Elphicke: I understand that. My concern is that because you are the Cabinet Office, you serve the whole Cabinet and therefore you are very much in a co-ordination role. One of my fears is that Departments will then sit there and then go off and do their own thing, and at the end of the day, they do not always fit together quite as you would necessarily like.

Ian Watmore: There is a risk of that.

Q78 Charlie Elphicke: Let me put to you a different possibility and a different way of doing things, which is that the Cabinet Office ceases to be the Cabinet Office and effectively becomes the Prime Minister’s Office, with a much stronger enforcement function. It would effectively run the writ of Whitehall to actually make things happen effectively and efficiently. Effectively it would give you the hand of the Prime Minister and dictatorial powers to actually make the Departments do the Prime Minister’s bidding.

Ian Watmore: Prime Ministers make decisions on things like that; I am not going to give an opinion on whether we should have a Prime Minister’s Office versus a Cabinet Office. However, within the Cabinet Office we do, as a result of the last Spending Review, have the powers and controls to stop people acting in the way you have said. I think the Chairman asked me earlier whether Departments resented our presence at times. Yes, they do, because of these controls. In the past, those controls did not exist so they could ignore us if they wanted to and carry on as before. Under the new regime, they cannot do that because in the end, if they ignore the recommendations that we come to, then they have to seek approval for the expenditure they were going to make on their projects and Francis Maude would, in his own words, happily say no in such situations, and say no again until people actually came to the table and changed what they were doing.

Q79 Charlie Elphicke: Has he done so to date?

Ian Watmore: Yes, an absolutely massive number of times.

Q80 Charlie Elphicke: Good, because you need to at least shoot an admiral to encourage the others occasionally.

Ian Watmore: Absolutely, and he likes shooting admirals, as he has probably told you. He has been very effective at that, so now Departments are bringing their plans to us much earlier in the timeframe because they do not want us saying no when it is well advanced. So we are getting into a dialogue with them early on about what the best way of doing something is. When we have agreed on the best way of doing something, when it comes back for approval it gets nodded through and that is working much more effectively.

Q81 Charlie Elphicke: So you hope that with that mechanism, the Revenue will aspire to save money and be efficient.

Ian Watmore: Indeed. I am absolutely convinced that the new Head of Inland Revenue, Lin Homer, will want to do three things: she will want to be efficient, she will want to save money, but she will also want to collect money.

Q82 Charlie Elphicke: I ask this because the NAO Report says, "The key challenge for the Cabinet Office will…be its ability to influence and oversee other Government Departments".

Ian Watmore: Which paper is this?

Charlie Elphicke: It is the National Audit Office Report-the NAO review of the Cabinet Office in 2010-11.

Ian Watmore: Oh, the Efficiency and Reform Group, yes.

Q83 Charlie Elphicke: You are saying that you are holding the cheque book now, which is a good way to encourage compliance. It is a key way.

Ian Watmore: I have this analogy that these controls will become redundant over time because people will behave the right way.

Q84 Chair: Like the Marxist State, you will wither away.

Ian Watmore: Like the Carlsberg complaints department was the analogy I had in my head; it exists but it is never used.

Q85 Charlie Elphicke: But it is over time, isn’t it?

Ian Watmore: At the moment we use it a lot because, left to their own devices, people would do things that were suboptimal when you look at it from across Government. Francis Maude is in a position to say, "No, you are not doing that. You are going to do it this way and reuse somebody else’s system or somebody else’s way of doing things". He is very hands-on and vigorous at doing that.

Q86 Charlie Elphicke: Just moving on to the issue of data, the NAO Report says that oversight from the centre can be affected by deficiency and the quality of data across central Government. What will you do to improve, first of all, the quality of data but also the importance of the sharing of data? If the Department of Health will not tell the Department for Education what is going on, it is not very good for the welfare of our children. You could actually intervene much more quickly and prevent the difficulties that children have growing up in different circumstances.

Ian Watmore: If I remember the PAC or NAO Report correctly, they were talking about management information data-cost per unit, widget type of information. That is something that we are obsessively collecting and publishing; it is enabling us to score the savings that we have referred to. In fact, the NAO Report on that same thing commended us on that aspect of being open and transparent with the data and supporting the numbers that were saved. So for the first time, the NAO has actually audited the savings numbers and said, "Yes, they are good robust numbers and we agree with them".

On that front, we are ahead of the game. There is a different issue about sharing data about individuals across departmental boundaries. That is the age-old debate between the more you share, the more joinedup an approach you can have around an individual, but the more you share, the more you threaten people’s privacy. People have completely different views on where we need to be on that spectrum. The previous Government tried to move more towards a data-sharing approach. Certain Members of this House would think we should move away from that. What this Government has committed to is to be very transparent about information and therefore put data out into the public domain that anybody can use, including other Government Departments or interested companies. The transparency agenda is one of those.

Q87 Charlie Elphicke: The NAO Report says that, "The main area of slippage was driving efficiency and effectiveness in Government, where 13 of the 43 planned actions were not completed on time". What followup actions have you taken in these sorts of cases and can you give specific examples?

Ian Watmore: As I said, the vast majority of the actions missed were missed by a month. Nobody was living or dying by the date that was set and the actions were completed. The impact of that collective set of actions has been very positive. £3.75 billion was saved in the first year and we are on track to save £5 billion in the second year. This is an extraordinary achievement that has not been achieved by Governments before. It is enabling us to reduce the deficit and collectively across Government preserve as much as we can of the delivery of frontline public services.

Q88 Chair: Can I just pick up on one term you used: boundary issues. What do you mean by boundary issues?

Ian Watmore: In any project of any size, the work gets subdivided into different groups of people. Often the most difficult thing about a project is when you bring it all back together and assemble it and you find that both think they have done a perfectly good job but actually the boundary between them was not well defined, so they either overlap or there is a gap. That happens in projects of any size and scale. It is exaggerated when the boundary of responsibilities is actually transferred to another entity, like another company or another Government Department.

Q89 Chair: So we are talking about interdepartmental working again.

Ian Watmore: Yes, and that is a classic challenge of any project management. Wherever those issues crop up, which they do on a daily basis, you have to sort them out because otherwise you only find out when you bring the whole shooting match together.

Q90 Chair: So in terms of crossdepartmental project management you need a permanent capability because otherwise Departments are always going to revert to type.

Ian Watmore: This particular case is a really positive example of how we brought the two major players, here and local government, together under a single management structure so that these issues come out. I would put the opposite on this one. I would say it is a really good example of crossGovernment working; it was recognised upfront by all politicians and officials concerned, so that is why we formed this group.

Q91 Charlie Elphicke: Do you think Universal Credit will work, be on budget and on time?

Ian Watmore: From where I sit today, I think all the signs are very positive. I am never going to predict that something is going to be on time and on budget until it is.

Chair: That is a deft answer.

Q92 Kelvin Hopkins: I would just like to pursue the Universal Credit argument a bit further. I would suggest to you that giving HMRC the job of handing out meanstested benefits was daft and having local authorities having another great chunk of meanstested benefits is also daft. Would it not be sensible to go to the logical conclusion and not just have Universal Credit, but have one Government Department responsible for handing out all benefits so they can all be means-tested at the same time? That would save a vast sum of public money and make life a lot easier for those on benefits.

Ian Watmore: I can only comment that it was the last Government that moved a big chunk of the benefit side from DWP to what was then the Inland Revenue. HMRC has built up, over a decade or so, the experience of delivering certain means-tested tax credits, or benefits in disguise. Possibly the single worst thing you could have done to Universal Credit would have been to reorganise the Departments to deliver it. If there is one thing I personally have a lot of evidence for, it is that machinery-of-government moves, done for the sake of it, do not achieve their end game. They consume the organisations within two years of absolute hell in trying to reconcile budgets and reorganise people’s conditions. 90% of mergers and acquisitions in the private sector fail for those very reasons. So machineries of government are the last resort that I would move to. I was not here at the time the Universal Credit policy was set but if I had made one recommendation, it would be: do not change the organisational boundaries at this point in time; get the project delivered through the organisations you have got and at some future point you can then decide whether or not you want to change the organisation, but do so in a period of relative calm, not in the heat of a big project.

Q93 Kelvin Hopkins: That is a very politic answer.

Ian Watmore: It is not a politic answer at all. Forgive me, it has nothing to do with politics; it has everything to do with management. It is a managerial recommendation that reorganising does not achieve short-term results, it creates short-term problems. In an era when you are trying to introduce change rapidly, do not reorganise.

Q94 Kelvin Hopkins: So we have made big mistakes but do not unscramble them and create a sensible arrangement?

Ian Watmore: I did not say that. I said if you want to achieve what you want to achieve, use the organisations you’ve got.

Q95 Kelvin Hopkins: The NAO has identified procurement, which we have talked about already, as a major area where Government could achieve efficiency savings. We have already had an IT report, which identified that the big beasts in the IT industry have effectively given the Government the run-around and that if it was split between smaller companies and we also had a major, much bigger, effective inhouse IT facility-that could actually make proper judgments where IT companies are concerned-we would do a lot better than we do now.

Ian Watmore: We accepted all those recommendations when you made them, and we have been implementing them.

Q96 Kelvin Hopkins: You mentioned some figures about how much more is going to smaller companies now but it is still quite slow progress, isn’t it?

Ian Watmore: I think doubling in a year is very rapid progress.

Q97 Kelvin Hopkins: Yes, but from seven to 14 or whatever.

Ian Watmore: That is a lot of companies and a lot of spend. That is from £3 billion to £6 billion of spend. £3 billion through an SME world is a huge number of contracts. They would not be SMEs if it was not.

Q98 Kelvin Hopkins: How have you progressed in developing an effective, inhouse capacity for making effective judgments so Government can tell companies what they should do, rather than the companies telling Government what they need to do?

Ian Watmore: As you may know, we have done a number of recruitments-some of which were with headhunters as it happens-to strengthen the capability that we have in Government. We recruited Mike Bracken to come and lead the Government Digital Service. He, in turn, has completely transformed the way that we do the central websites of Government-a fantastic improvement. We brought in Liam Maxwell, from a local-government background, to challenge us on how we were dealing with the big companies and, in particular, how to break up some of the big deals. I have just appointed Andy Nelson as the Government’s Chief Information Officer. He was at the Ministry of Justice in his most recent job but, before that, he was the CIO of GE, Royal & Sun Alliance and Asda. We are out, at the moment, recruiting for a head of DWP’s IT, and again we have used a headhunter for that to try to get the best talent in. We are also recruiting a deputy to Andy.

So, we are out there building the capability and getting the best people in. We also have a programme internally, which is about building the capability of IT across the Civil Service that we already have. For example, we have a cross-Government HR professional approach to IT, which is now baked into the HR world. We also recruit fast-streamers to specialise in the interface between IT and business, and we have been doing that now for six or seven years. There are now 70 or 80 of these guys around Government, who have come up through the fast-stream ranks but are now specialists in how to apply technology to the public service setting. It is a long journey to get the capability of something as big as Government right, but I think we are on it and we are agreeing with you that we need more of it.

Q99 Kelvin Hopkins: There are serious problems inside the health service at the moment with their IT systems.

Ian Watmore: I think we have kind of largely fixed those-he says optimistically, perhaps-but we used the Major Projects Authority approach to call a halt to that particular national programme for IT. We then helped the Department of Health-this is a good example of cross-departmental working, with the Cabinet Office and the Department of Health working hand-in-glove-to renegotiate the contracts. As you will have noticed, only last week the Secretary of State for Health announced that a significant chunk of money saved from those renegotiations of the IT contract was being reinvested in the frontline health service. We are in open litigation with one of the suppliers, who failed to deliver. We have called a halt to that problem. We have solved the vast majority of the contractual issues and we are using the money that is saved to reinvest in the health service.

Q100 Kelvin Hopkins: What about defence procurement? There are constant arguments about defence.

Ian Watmore: I am personally less close to the defence procurement agenda, although what I would observe is that the first part of this Parliament was primarily about trying to get the Strategic Defence Review on the stocks and then trying to get a balanced budget. It took longer than the Spending Review time to get to the position where the defence Department had a balanced budget, which I think they now have. As a result of that, they are now turning their attention to the reform agenda that they are trying to do within the defence environment, and they have brought in Bernard Grey to head up what they are doing on procurement. His recommendations are with Philip Hammond soon, I think, on what they should do next. I am not close to the detail of that but they are taking the reform of procurement very seriously.

Q101 Kelvin Hopkins: Can we look forward to Government not making cuts-relatively small cuts in these terms-to things like the BBC World Service, which has a tiny budget by comparison with defence and DWP, is very, very important, and yet seems to have been suffering from cuts?

Ian Watmore: The answer is that I do not know, because that is a matter for DCMS.

Q102 Kelvin Hopkins: Indeed, yes. Just a last question on your own Department and the proposed full-year 2010-11 administration expense in your Department: there was a supplementary estimate that is 29% higher than that planned in the 2010 Spending Review-£210 million compared with £163 million. A small amount of that would have saved the BBC World Service, but we will not go into that. Is the Cabinet Office still aiming to meet its original target of £151 million set in the 2010 Spending Review for its administration budget in the next year?

Ian Watmore: We have written a detailed letter back to the Committee on that. All of the increase in spend came from the machinery-of-government moves that were made to put different bits of Government into the Cabinet Office. When the Cabinet Office started, at this election, it was approximately 1,500 people in size. Once the Government had moved all the various bits from elsewhere-like OGC, Directgov and all these other things-into the Cabinet Office, it swelled to something like 3,300 people. Our baseline was that 3,300; we have now got it down and it will be around 2,100 at the end of this financial year. We have taken the inherited cost base of all the bits of Government that came into the Cabinet Office down by a third.

Q103 Chair: Do you separate personnel between programme and DEL as well?

Ian Watmore: There are one or two technical peculiarities in the way the Spending Review was set up. Basically, we think of our personnel as administrative expenditure, and hence DEL, but there are cases where the Treasury, for reasons of the Spending Review, regarded some aspects of administration as programme expenditure.

Q104 Chair: Did the transfer of estates costs from administration to DEL of £7 million involve any people?

Ian Watmore: That, I think, is where the Government Property Unit transferred across.

Q105 Chair: Does that involve people?

Ian Watmore: Yes, because-

Q106 Chair: It becomes very difficult for us to keep a handle on this.

Ian Watmore: It does, but that is why we have set it out in detail. The Government Property Unit was set up under BIS, and its spending settlement had a number of millions of pounds for it.

Q107 Chair: People managing properties count as programme expenditure, not-

Ian Watmore: It did under the way they set it up under BIS, so when it moved to us, it transferred in that way.

Q108 Chair: Basically, the Cabinet Office is growing and taking on more functions.

Ian Watmore: We have reduced those functions as we have taken them on. We take them in and then we rationalise them. We have reduced the size of the Cabinet Office in a year-or we will have by the end of this month, when the last two organisations that we have taken in close, which are the National School of Government and the Central Office of Information-from about 3,300 people to about 2,100 people.

Q109 Chair: Can I ask you to take a rather old-fashioned view and produce us a table of total headcount for all the functions-programme and DEL-from the beginning of the Parliament, and show us a like-with-like comparison to show how your headcount has been reduced, however it is classified?

Ian Watmore: I will do that with the greatest of pleasure.

Q110 Chair: I think that would give us confidence that you are actually reducing your administrative costs.

Ian Watmore: Seriously, we are. I cannot tell you how much time I personally have spent on restructuring and dealing with the closures. We have had to make several hundred people redundant through this and we have reduced the size of the Cabinet Office by over a thousand people.

Q111 Chair: Very impressive. Your letter also explained the delay in the Office for Civil Society programmes, and you say the reason it is being delayed is "to manage its significant portfolio of programmes in a measured way". This sounds like Civil Service speak for, "We have had to delay it."

Ian Watmore: No, not particularly. What tends to happen is that block amounts of money are allocated at the Spending Review time: "Approximately spend this much this year, then the next…" People have an approximate view of what they can-

Q112 Chair: Was money allocated without any identifiable or deliverable programmes?

Ian Watmore: I would say that it was allocated at the high-level identification. It was not down to the detail. Nick Hurd would then sit down with the officials and go through that in detail and start to work out precisely what the Government actually wants to do in this area. Sometimes they have taken the view that they want to spend the money in the second year rather than the first year of the Parliament, because it takes them a year to get the organisation in place. All that has happened here is that Ministers and officials in that part of the Cabinet Office have taken the judgment that they want to spend the money next year rather than this year to get it properly spent. The Treasury allows for that-it has a mechanism-and we have just taken advantage of it.

Q113 Chair: Would it not just be better to say, "We have delayed programmes because they were not ready"? That is what it means.

Ian Watmore: No, I do not think it does. I think it means that Ministers have decided on the programme that they want to follow now, and that has a later spend profile than what was assumed by the CSR. That is not the same as a delay. That is just that they want to do things differently.

Chair: I think we are going to let you get away with that.

Q114 Alun Cairns: Mr Watmore, how would you describe the transparency record of the Department?

Ian Watmore: As a Department or as the Department that is leading on transparency?

Q115 Alun Cairns: As a Department to begin with.

Ian Watmore: Because the transparency agenda started with us, we have attempted to be as transparent as we possibly can in as many areas as we can. We have been publishing loads of statistics about what we have achieved, when we have achieved it, what all our people get paid, how many savings we have achieved in the efficiency programme, etc. I do not know if there are any areas that you have in your mind that you wanted to probe.

Q116 Alun Cairns: Yes, I wanted to probe a bit further. Having expressed concerns in August 2010 about the performance of the Cabinet Office in responding to FOI requests, in October 2011 the Information Commissioner announced that it was placing the Cabinet Office under special intensive monitoring arrangements. How do I reconcile that statement with what you have just said?

Ian Watmore: No, I absolutely understand what you are saying. I think what happened, bluntly, was not a lack of transparency. The FOI requests were flooding in from all parts of the system; we had hordes of people arriving; the Department was being restructured; and the management eye went off the ball in terms of ensuring that the FOI requests were answered properly. I think the Information Commissioner rightly held us to account for that. We have put in place a programme to deal with that. It is now dealt with.

Q117 Alun Cairns: Are there any other Government Departments under those special measures?

Ian Watmore: The answer is that I do not know.

Q118 Alun Cairns: How do you see, then, the Department acting as a role model to other Departments across Government, bearing in mind you need to take the lead on this, when you are under such special measures?

Ian Watmore: I think there is a difference between, "Are you administratively correct in what you are doing?" and "Are you trying to hide information?" We are definitely not hiding information. We seek to be transparent. We will answer all Freedom of Information requests as required by the law. In this particular case, we got behind on the backlog of FOI requests and we had to move resources to it to deal with it. It was a mistake. We have corrected it. I do not think it will happen again.

Q119 Alun Cairns: I might accept the responses that you have just given me if it was not for standard parliamentary questions going out and the responses coming back saying that you do not hold the information or the information is too costly to collate, which has also been a concern to a number of interested parties and to MPs too. Is it not that that has been used an excuse?

Ian Watmore: That answer, almost certainly, would have been given whether we had done it on time or not. There is a difference between, "Does the FOI request get answered in the allowed time?"-and I accept that the Cabinet Office got behind on that and we have sorted it-and the completely different question of, "In an individual FOI request, do you like the answer that is given?" You will not like some of the answers that are given. We get a lot of requests for a lot of information that would be an unbelievably disproportionate cost to go and collect, at a time when we are already accused, by other parts of the world, of being overly demanding on information from Government Departments.

Q120 Alun Cairns: Mr Watmore, I think you are missing the point. It is not only about answering the questions in time, because you can easily respond in time. The question is whether the content is accurate.

Ian Watmore: That is what I am saying. The Information Commissioner held us to account for not answering them in time, and we have sorted that managerially. We have put in place a programme to fix that, so that is now sorted.

Q121 Alun Cairns: Why, then, do you regularly respond to round-robin parliamentary questions saying that you do not hold the information?

Ian Watmore: I would have to look at each one individually and deal with it, but usually the reason given is that we get asked a question about something that would have a disproportionate cost to collect. That is what we put back.

Q122 Chair: Do you apply the same test of disproportionate cost to your FOI requests as to parliamentary questions?

Ian Watmore: I do not honestly know the answer to that question.

Q123 Chair: Is that not rather a disturbing fact-that you do not know the answer to that question?

Ian Watmore: No, not at all.

Q124 Chair: Should it be, axiomatically, that Parliament should get at least as equal respect as an FOI request?

Ian Watmore: Oh, sorry, that way round. It definitely gets as equal respect as an FOI request.

Q125 Chair: Quite often, we put in parliamentary questions and they are fobbed off, so we put in an FOI request and we get the information. Is that not rather unsatisfactory?

Ian Watmore: If you have some examples of that, I would be happy to look into them.

Q126 Chair: I probably will have some examples of that.

Ian Watmore: I do not think there is an intention to delay-

Q127 Chair: I am sure there is not an intention, but there is no legal force to a parliamentary question but there is legal force to an FOI request, so, inevitably, it is easier to fob off a parliamentary question.

Ian Watmore: I would be happy to look into any examples you have. What I am saying to Mr Cairns is not that there is an unwillingness to be open. There is a very strong willingness to be open. The Government has committed to that and we take it. What I think we did lose the focus on was the administration of it. We have corrected that. Then it is a question of having to look at each topic on its merits.

Q128 Alun Cairns: Let me pursue one topic, then. I still think, with the greatest respect, Mr Watmore, that you are missing the point, because you are considering it on time. You are right in terms of the-

Ian Watmore: You asked me a question about the Information Commissioner putting us in special measures.

Q129 Alun Cairns: In terms of the Information Commissioner passing judgment and putting you under special measures in terms of the time-and I have used the examples of parliamentary questions, round-robin questions, that we have highlighted-what about the Comptroller and Auditor General, who gave qualified opinion to the 2010-11 My Civil Service Pension Scheme accounts, because the Cabinet Office was unable to provide sufficient evidence to confirm that the correct payments had been made?

Ian Watmore: That is a completely different topic, which I am happy to answer.

Q130 Alun Cairns: Mr Watmore, I think it is all about management of information, isn’t it?

Ian Watmore: I will answer that question in a second, but what I come back to is that the judgment on an individual request is made on its merits within a timeframe laid down by law and convention. I have not had complaints from the Information Commissioner about the judgments we are making. We did have a problem with doing them in the timeframe, which we have fixed. If there are issues about the judgments that we are making, then I am happy to take those examples off-line.

Q131 Chair: Can I just press you on this point before we go on? We are advised that you have, in the past, refused information on the grounds of cost, which other Departments have been able to provide. Do you accept that?

Ian Watmore: I do not know. You have to give me the examples. Without an example in front of me, I cannot say.

Q132 Chair: In relation to round-robin parliamentary questions.

Ian Watmore: I am very happy for you to give me any examples.

Q133 Chair: We will furnish you with examples of that.

Ian Watmore: And I will look into them for you.

Q134 Chair: We would be grateful. Moving on.

Ian Watmore: The My Civil Service Pension thing is a completely different topic, so if I can move to that, the NAO came in to audit the accounts of the Civil Service Pension Scheme for the year ending March 2011, I think, so over a year ago now-or just about a year ago now. They asked for information on around 130 people to be furnished to them for an audit. Most of those cases-in fact, the vast majority of those cases-were held by Departments, not by the Cabinet Office, going back into the mists of time. They might ask about some person who retired in the MOD in 1992: "Can we have the data for it, please?" There were 130 of those requests and, obviously, we tried to get that data but Government Departments went back in time and could not find the information in time.

Then the audit ran out of time and said, "We are going to qualify the accounts." We are pursuing with Departments every single one of those 130 cases. We are about halfway through now. It is really difficult to find the data, often, because it is in the mists of time, but we are getting them piece by piece and, at the end of this month, I am hoping to have a report on where all of the 130 cases are. We will then go back to the NAO and, hopefully, they will approve that we don’t have a problem there; it was just an audit-evidence problem from the past.

Q135 Alun Cairns: Are you saying that the Comptroller and Auditor General was being unreasonable?

Ian Watmore: No, I am not. I am saying he asked difficult questions. One might ask why previous audits didn’t ask the same questions-which they didn’t-but that wouldn’t be to criticise what Amyas has done this time. Amyas’s people came in and, I think, validly asked questions about the history of why people have this pension versus that pension. That is right across Whitehall and we have been working with every single Department to try to dig that information out from whatever record basis they have.

Q136 Alun Cairns: What action are you taking, then, to improve the management of the information that may be needed under FOI or may be needed by the Comptroller and Auditor General in the future or may be needed by any other Department?

Ian Watmore: You are linking things that I don’t think are linkable. I have told you what we have done on the FOI. We had a short-term administrative problem, which we have fixed, and it is my intention not to get back into that position again. We will continue to answer FOI requests and PQs on time, to the best of our ability, and if people want to challenge on individual cases, they are welcome to do so. On the audit of My Civil Service Pension, we are learning from the audit from last year and we are trying to get Government Departments more ready to get the information earlier this time so that we will not have a repeat of the audit experience this year. This is always assuming that, when we have dug out the 130 cases, it is just a question of, "We could not find them at the time," not that there is an underlying problem. If there is an underlying problem, then of course it is a completely different issue, but so far there isn’t.

Q137 Alun Cairns: Your letter to the Chairman of 7 March this year talks of "increasing the likelihood of the Cabinet Office receiving a clean opinion on the 2011-12 accounts". Is there still some uncertainty then?

Ian Watmore: There is always an uncertainty with an audit until it is done. That is the nature of audits. The National Audit Office asked for a much bigger number of cases last year than they have in previous years. We are now gearing up for that sort of volume of requests again, so that we will be able to answer them in a timely fashion.

Q138 Alun Cairns: What action are you taking to ensure that newly published datasets are accompanied by the appropriate explanatory and contextual information to ensure that users can interpret the data effectively?

Ian Watmore: Give me an example in your mind.

Q139 Alun Cairns: I am talking in general terms. When you publish data, there can be an overload of data that has been published voluntarily, but without the context, the background, the track record and the history, that data is pretty unusable.

Ian Watmore: The Government came in with a series of transparency announcements, which people did their best to comply with, but got the criticism that you have just levelled, I think, that what was put out there was unintelligible. A good one I remember was the early spending data that the Treasury published on its so-called COINS database. It is a very ancient system. The way the data is held is understood by a small number of experts. We published that in the public domain and people did not like it very much, understandably, so the Treasury are now working on how to get that sort of spending information much more transparent and understandable, rather than just publishing what is a quite obscure database at the heart of Government. They have a whole series of projects on the go to improve the way that financial management is made available to the public. The transparency agenda that one of my directors leads on has two broad themes to it: be transparent and be understandable-or be readable. When we are talking about publishing health data or education data, it is to do so in such a way that people who need that data can actually use it and understand it.

Q140 Alun Cairns: Is that happening across all Departments?

Ian Watmore: That is the policy. Every Government Department will have its own challenges with the way it publishes its own data, depending on how it is held and how easy it is to turn it into a publishable format, but that is the policy.

Q141 Kelvin Hopkins: Our last couple of questions are about social mobility. The Government has taken a great interest in social mobility, quite rightly, because our socio-economic divisions are deep and seemingly intractable in Britain and have got worse in recent years, rather than better, according to academic research. How helpful is the Business Plan model for monitoring progress on the implementation of the Government’s social mobility strategy?

Ian Watmore: My view would be that it is a necessary part of the process, but a long way short of being sufficient; in other words, if we monitor activities in the Business Plan, yes, that is great and we can tick those off, but the complex subject of social mobility is such that it can be years before you can really judge whether or not social mobility has occurred. Of course, a lot of people debate what the definition is, so there are people out there who are much more expert to opine on social mobility than I am, about how it is achieved and what causes the problem. In terms of the business-plan side, yes, we will do the things we are doing. That is what the Business Plan says, but I think it is a much bigger judgment as to whether or not it is being achieved in the way that people want it to be achieved.

As you know, the Deputy Prime Minister puts this right at the heart of his interests in Government, and he is pushing for policies to be implemented right across Whitehall that will improve social mobility. The coalition has adopted a number of those in the Pupil Premium and some aspects of the higher-education debate, apprenticeships and all these other things that people see. He is looking to do examples of mentoring and internships open to the best person, not to the person who knows somebody who knows something. It is that kind of arrangement. There is a whole range of activities across the whole Government spectrum designed to improve social mobility that is at the heart of one aspect of the coalition’s agreement. The Business Plan is just a part of that picture. I would not say it is anything more than that.

Q142 Kelvin Hopkins: Appointing the new chair of OFFA, for example, has been quite an interesting case.

Ian Watmore: As you know, it was a controversial appointment.

Q143 Kelvin Hopkins: He is a personal friend so I will not go any further.

Ian Watmore: I know him very well as well. I thought it was a great appointment, but one person’s agent of social mobility is another person’s social engineer. It is a political debate.

Q144 Kelvin Hopkins: I have just one supplementary question, really. The Cabinet Office online Business Plan merely records that the implementation of the strategy is in progress, with a target completion date of April 2015. How can people find out in detail what progress is being made?

Ian Watmore: Which one are you referring to, sorry?

Q145 Kelvin Hopkins: It is the Cabinet Office online Business Plan for social mobility. It records that the implementation of the strategy is in progress and it has a target completion date of April 2015, so how can people find out in detail what progress is being made?

Ian Watmore: The answer to that is I do not know. I will find out for you.

Q146 Chair: It is under subsection 10 on 5.1: "Work with Departments to implement the Government’s social mobility strategy (including the various 2011-2015 milestones set out in the strategy) Started. End April 2015.".

Ian Watmore: I would have to go back to the detail on that point.

Q147 Chair: I think there is a shortcoming of Business Plans to which you refer, which is they are of value and they are necessary but not sufficient.

Ian Watmore: That is exactly my view of them.

Q148 Chair: When I see subsection 5-"Begin to work with relevant Government Departments to implement the social mobility strategy. Completed"-how can you complete something that you have only begun? It becomes a bit vague, doesn’t it?

Ian Watmore: There are examples of that and, each time we do them, we are trying to be more crisp about what the actual action is, and measurable and so on. On the question Mr Hopkins asks, the Government expects to go into the next election with social mobility as one of its tests to the public. It is right at the heart of the coalition agreement. Deficit reduction, economic growth and social mobility are the three themes that drive throughout the whole Government policy agenda, and they would expect to be judged on that, I am sure, by the public in a whole range of areas including health, education, jobs and the economy, etc. I think that is all that probably means in that particular case.

Q149 Chair: Mr Watmore, thank you very much for your time this morning. You have talked at great length and with great intensity about a great many things, and we are very grateful for that. Is there anything you want to add?

Ian Watmore: No. Just that I think the Cabinet Office is a great Department and I am enjoying being its head and I am enjoying finding out about all the work of the bits of the Cabinet Office that I had not come into contact with before. It is a great organisation and I would like to have an ongoing relationship with this Committee, as you would expect.

Q150 Chair: Please pass the thanks of this Committee to everyone who works in the Cabinet Office. As you know, we champion the Cabinet Office and we think the Cabinet Office should be doing more rather than less in terms of promoting Civil Service reform and better cross-departmental working, so all power to your elbow.

Ian Watmore: Thank you, and I hope we can have a constructive relationship between myself and the Committee over the months and years ahead. That would be great.

Chair: Thank you very much.

Ian Watmore: Thank you.