Liaison Committee - Evidence from the Prime Minister - Minutes of EvidenceHC 150

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Evidence heard in Public

Questions 360 - 442



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Oral Evidence

Taken before the Liaison Committee

on Tuesday 6 March 2012

Members present:

Sir Alan Beith (Chair)

Mr Graham Allen

Mr Clive Betts

Malcolm Bruce

Geoffrey Clifton-Brown

David T. C. Davies

Mr Stephen Dorrell

Mrs Louise Ellman

Margaret Hodge

Mr Bernard Jenkin

Richard Ottaway

Mr Graham Stuart


Examination of Witness

Witness: Rt Hon David Cameron MP, Prime Minister, gave evidence.

Q360 Chair: Welcome, Prime Minister. At the beginning of today’s sitting, I thought that it would be right to record the recent death of Lord St John of Fawsley-Norman St John-Stevas-and to pay tribute to the fact that it was he who carried through the creation of the Select Committee system in the House of Commons, which most people regard as one of the most significant reforms that has happened in the House of Commons.

Mr Cameron: I absolutely agree with that. When I studied politics at school, I remember learning about the great reforms that he had put through in 1979. It was very interesting coming here a decade or so after that, and then sitting on a Select Committee and seeing what an effect they had had. It was one of those reforms that have really endured. It was a great honour for me. I got him into No. 10 Downing street after May 2010 and heard some advice from him, so I am glad he got to do that. He was an extraordinary politician and someone who has left a real legacy in the Select Committee system, which has raised Parliament’s game at calling the Executive to account.

Chair: Thank you very much. I am rather alarmed by the thought that, while I was here voting for those reforms, you were at school.

However, turning to a very serious matter, we thought that we would begin today by looking at the situation in Syria. Richard Ottaway will open the questions.

Q361 Richard Ottaway: Good afternoon, Prime Minister. We are seeing blood shed daily in Syria at present; 6,000 people are reported to have been killed and the calls for action grow. The main bar to this is the Russians and Chinese using their veto on the Security Council at the United Nations. You told the House yesterday that you were going to have a phone conversation with Mr Putin, presumably to congratulate him on his election. During that, did you have a chance to talk about Syria? Do you have any hope or optimism that, now he has been elected, his attitude may change?

Mr Cameron: I did discuss the issue of Syria with President Putin and, indeed, with Dmitry Medvedev as well yesterday. You are right. What is happening is absolutely appalling. The loss of life is appalling. The butchery being organised, ordered and carried out by this regime, in my view, is criminal, and it was extremely disappointing that Russia and China vetoed a resolution that would have helped.

I raised the issue. I don’t think that we will ever agree about everything to do with the future for Syria, but we have to persuade the Russians that it is absolutely essential at the very least that there is humanitarian access and that we have a clear resolution about a stop to the violence. There is no doubt that whatever one thinks of the Russian position-and I think they are absolutely wrong to take the position that they did-they have considerable influence in Syria so they can make a difference. They need to understand that what they have done is very bad for their reputation right across the Arab world. The Arab League is united in wanting to see transition in Syria, which is the best way to end the violence.

Q362 Richard Ottaway: Did you get any vibes from him that he might shift his attitude?

Mr Cameron: I think it is early days. I didn’t sense any sign of a shift, but the agreement was that our Foreign Ministers would talk and we would explore whether more could be done to try to reach some common ground on this issue. Let us be clear: Britain is not going to give up what we believe is right for Syria. We want to see humanitarian access. We want to see the regime called to account for its crimes. We want to see a transition that means that Assad has got to go. We are not going to change those things, but if there were a way at the UN of getting a resolution-which other countries could agree-that at least would provide condemnation of violence and proper humanitarian access, that would be progress.

Q363 Richard Ottaway: Can we have a look at what we can do there? In his statement on 6 February, the Foreign Secretary left open the possibility of further support for the rebels. What exactly did he have in mind?

Mr Cameron: It would be welcome if there were a clearer establishment of whom the Syrian opposition are and a clearer sense that they are genuinely representative of a future for Syria that would be democratic, open, tolerant of minorities and all the rest. Let us compare it with the situation in Libya. The National Transitional Council did a good job at bringing opposition elements together and giving the world someone to talk to and someone to work with.

In the Syrian National Council, we now have a body that we can see as legitimate, but frankly we need to do more work to understand the various elements of the Syrian opposition and encourage them to come together and present a more united front so that we can work with them. Let us be clear: all the European countries have an arms embargo that is applied to Syria, but there are quite a lot of things that we can do to build diplomatic and political support for the Syrian opposition.

Q364 Richard Ottaway: You mentioned the arms embargo. This is a general embargo on the supply of weapons to Syria. Is there not any way around this? This embargo is preventing us from arming the rebels or giving support, yet we know that the Russians are putting in a substantial number of weapons and support there for the Assad regime. We have the rebels fighting with one hand behind their back here, because of an embargo that we are enforcing.

Mr Cameron: I think we need to stand back for a second and ask ourselves, "What is the best path to end the violence in Syria?" We discussed this at length at the National Security Council, and I think the answer is that the best path to peace for Syria is a transition at the top of that regime, with Assad going. The idea of transition at the top is possibly a better and less bloody outcome than a revolution from the bottom. Those who are giving succour to President Assad, and who think somehow clinging to him ensures stability in Syria, are absolutely wrong. Having him stay is a cause of instability, and they may run out of time when the revolution from the bottom helps to unseat him, rather than transition from the top. I think in terms of ending the bloodshed and getting a better outcome in Syria, transition at the top is the best answer.

Q365 Richard Ottaway: But the Foreign Secretary said, in an answer to a question from me, that there is "no limit on what resources we can provide"-this is talking about helping the rebels-and that "we may be able to do more in the future". What did he mean?

Mr Cameron: There are stages to this. First of all, as I said, it has been important that the Syrian opposition has become better organised. I think that has now happened, and I think the meeting of the Friends of Syria group has been helpful in encouraging that. There is then the supply of advice, information and help, and the supply of non-lethal equipment to help them. There is also the supply of humanitarian aid to make sure that those people who have been caught up in the fighting are helped. There are those steps that do not break, in any way, an arms embargo that is in place and that we have supported.

Q366 Richard Ottaway: But you are ruling out weapons at this point?

Mr Cameron: At this point, I think, as I said, the right approach is to bring together the international community, to put diplomatic and political pressure on the regime, to work with the opposition and to make sure that they have a proper outward face, as it were, and then to work out what more we can do to help them and pile the pressure on. I think we are at that stage rather than going further for the time being.

Q367 Richard Ottaway: Thank you. Moving on to what we might find, the British ambassador said yesterday that he thought the regime would fall within the year. Have we made any assessment of what we are going to find there, when it does? What sort of regime will succeed Assad? We seem to be reluctant to recognise the Syrian National Council. Is there a reason for this? Would you like to comment on the fact that al-Qaeda is reportedly quite active with the Syrian opposition at the moment?

Mr Cameron: On the Syrian National Council, we have said that it is a legitimate interlocutor for the Syrian people. We have made that step forward, and that has been with allies at the Friends of Syria meeting in Tunisia.

On the second point, on al-Qaeda, there is growing evidence that extremist elements want to get involved in Syria, and there is some evidence that they may have got involved already, so there are clearly dangers on that front. But as I say, if we ask ourselves, "What is the quickest way to end the bloodshed and get to transition?" it is actually for Assad to go. That is why there is diplomatic, political and sanctions pressure, in terms of what Britain can do, because it is immensely frustrating when you see the scale of bloodshed.

I spoke to Paul Conroy, the photographer who was caught up in Baba Amr, and he tells absolutely horrific stories about what is happening and the amount of people who have been deliberately targeted. There were no weapons in the buildings where these people were targeted, but they were deliberately targeted and killed by this regime. So it is immensely frustrating, but we should not underestimate what we can do through political pressure, diplomatic pressure, sanctions pressure, pressure at the UN and work with the opposition-all these things.

I do not know whether you want the Committee to spend time on this, but people ask, "Why did you act in Libya but you are not acting in the same way in Syria?" I think we have to be frank that there are some important differences. In Libya there was a UN resolution authorising force, there was the Arab League asking for force, and there was an international consensus. It was something that was, as I put it, not just necessarily legal and right, but also achievable through the force that we were prepared to put on the table. I think Syria is different. We have to look at other methods to bring about the change that the world and, above all, the Syrian people need to see.

Q368 Malcolm Bruce: Prime Minister, may I ask you to elaborate a little bit more on the role of the Arab League? You mentioned it just now. It seems to be taking a somewhat more supportive view of the rebels. Foreign Minister Saud al-Faisal asked, "Is there anything greater than the right to defend oneself and to defend human rights?" He was apparently considering giving some arms to support the resistance. If that is the case, what would the British Government do in the event of the Arab League intervening in that way?

Mr Cameron: I think it is right to recognise that the Arab League has a very legitimate interest and a leadership role. Both the Libyan case and this case show that when the world allows the Arab League to get into a leadership role, it is far more likely to end up with a better outcome, because Arab people, including in Syria, can see that their friends and neighbours are supporting them in wanting to get rid of this illegitimate and criminal regime. I do not accept that somehow we are taking a different track to the Arab League. We want to work in lockstep with them, and that is why we have said that the Syrian National Council is a legitimate representative of the Syrian opposition.

Our view is that we should work with the Arab League. When it came up with its plan, we took that plan with it to the United Nations and wrote it into a resolution. That was a way of trying to work with it to demonstrate that this is the world working together with the Arab League rather than western countries trying to tell Syrians what to do.

Q369 Malcolm Bruce: So if they took a more direct interventionist line, we might follow them through.

Mr Cameron: We might well do. But as I say, I think if you ask the question, "What is the best way to end the violence?" it is transition at the top rather than bloody civil war that would be a better, faster outcome for people in Syria. I think the Arab League feel this too. If those who are supporting Assad, because they somehow think he brings stability to Syria, go on with that, they will continue with a civil war that is going to cause so much pain and suffering, so it is better to get transition at the top than revolution at the bottom.

Q370 Malcolm Bruce: I think we would all agree with that, but so far the mechanisms you have used have not delivered results.

Mr Cameron: That is absolutely correct.

Q371 Malcolm Bruce: On the humanitarian front, you have said it is awful. We have seen the situation, for example, with the Sunday Times journalist not just being killed, but her body not being got out for days. When we do hear of people getting in, we hear of public executions in the street, and yet we seem to be unable to intervene. There are two things here. What can we do when this is happening day in, day out to stop it? At what point does the responsibility to protect kick in, and to what extent do we need to support the neighbours-Lebanon and Turkey-who are having to take the refugees who are fleeing, when they can get out?

Mr Cameron: The first thing to do is to make sure that the resources are in place so that the help is there. We have announced the money to provide for humanitarian aid, so there is no block on resources. We are always the first to put our foot forward and to help. The problem is getting the aid to the places where it needs to go. The problem with that is that the Syrian authorities are not allowing that to happen, so what we need to do is build up the maximum amount of pressure. That is why Baroness Amos, who runs that part of the UN, is going again to the region to try to make sure that aid gets through. That is why we are trying to write this UN Security Council resolution, and get Russian and Chinese support for that resolution, to mandate that the aid has to get through. At the moment, as I understand it, the aid is still getting to places 4 km away from Homs; it is not getting into Homs itself, and that is not acceptable. So we need to keep up the pressure.

In terms of the responsibility to protect, I want us to do more. I want us to be active in taking every step that we can to try and stop this slaughter. The reason I stop short of the action that we took in Libya is that I think we have to be clear that the circumstances are different. In my position, or the position of the French or American President, we have got to be clear about knowing what our means can achieve and knowing that we have everything necessary to achieve them before we start taking steps like that.

Q372 Malcolm Bruce: My final point is that that would apply even for a temporary humanitarian pause. The problem is that we have not even been able to get humanitarian relief, never mind support for any resistance.

Mr Cameron: It may be possible to get a humanitarian pause via this UN Security Council resolution route, but we have to be clear: whether it is pauses, corridors or safe zones, you can’t open those things up unless you have the means to enforce them.

Going back to the example in Libya, those of us that wanted a no-fly zone-and, indeed, a sort of no-attack zone, so that Gaddafi couldn’t murder his own citizens-had to be prepared to take the step of taking out the Libyan air defences right across the country. We had to be prepared to use some fairly overwhelming force to make possible the ends that we wanted to achieve on the ground.

We have to be clear in Syria that at the moment it is political pressure, sanctions pressure, diplomatic pressure and UN pressure-it is all those pressures that we should be building. I don’t think we should rule out for ever corridors, pauses or safe zones; we should examine all these things, but as we do so, we must make sure that we are prepared to will the means to achieve them rather than just declare them.

Q373 David T. C. Davies: How real is the danger that if or when Assad goes, he could be replaced by an extremist Sunni theocracy with sympathies towards al-Qaeda?

Mr Cameron: It is very difficult to posit what Syria’s future will be, but when we have discussed this in the National Security Council, the view coming as much from the expert community as from anyone else is that it is hard to think of an alternative that would be much worse than Assad himself. When you think of what-

Q374 Chair: Doesn’t that make an assumption that the removal of Assad alone would bring about a change in the regime?

Mr Cameron: No. There are two questions. One is: is there an outcome that is worse than the current one? I think it is quite difficult to imagine that when you think of Assad’s butchery of his own people, the support that he has given to terrorist groups in the region and the like. The question that follows from it is: can you be sure that someone else would stop the slaughter that’s taking place? That’s where I think the diplomatic political sanctions pressure is so important-for the world to say to Syria, "What is happening is unacceptable. Assad has to go as part of a transition, which must be about stopping this violence against your own people."

Q375 Chair: But where would he go and how much of his clan would he take with him?

Mr Cameron: First, I don’t want to see this person not held accountable for their crimes. That is very important. One of the reasons why we are sending people to the region is to document the human rights abuses, the war crimes and the dreadful things that are being done, so that this leadership can be held to account for what they have done. But I am absolutely clear that if we want an end to the slaughter in Syria, one of the quickest ways of getting it is an end to the regime and Assad going.

Q376 David T. C. Davies: Would an Idi Amin-style solution, whereby Assad and his family went into exile somewhere in return for a peaceful transition, be a price worth paying?

Mr Cameron: Look, an outcome that stops the slaughter and sees a peaceful future for Syria is a better outcome than what we have now. There are people who are supporting Assad, who think that clinging to him is somehow part of a stable future for Syria. I think that is just not the case. I think it is unthinkable that this man could now run-even if he stopped the slaughter-a stable Syria; he couldn’t. His going is very much part of the transition we need to see.

Q377 Richard Ottaway: Prime Minister, I am sure that you don’t need reminding of the immense dangers that exist in Iran. A nuclear-armed Iran would have, in my view, devastating consequences for the Middle East. At present, our policy is to implement sanctions against Iran. How do you measure the effectiveness of sanctions?

Mr Cameron: I would say that our policy has three parts. The first is, as you said, sanctions. It is pretty tough now that there are EU oil sanctions against Iran. That is not something to be sniffed at or something that people would have thought possible, perhaps, a few years ago. The second leg is to say to the Iranians, "If you stop pursuing a nuclear weapon, there is a future, through negotiations, of having civil nuclear power and being a civilised part of the world." The third element of our policy is that nothing is off the table. It is difficult to say that, because no one wants to see conflict in any way, but it is very important that the world sends a message to Iran that a nuclear-armed future is not something that we want to see. Those are the three elements of our policy.

To answer your question very directly-what effect can the sanctions have?-there is no doubt that they are beginning to have an economic effect. You can see that in what is happening inside Iran. You can see it with what is happening to its foreign exchange position. You can see it in terms of the fact that it is scrabbling around desperately trying to sell to others the oil that it would have sold to European countries. The pressure now needs to turn-given that Europe is doing its bit, you now have to convince the Indians, the Chinese and others not to buy the surplus oil that Iran will be punting around the world.

Q378 Richard Ottaway: If the Iranians continue with their programme, you are going to have to make a rather uncomfortable decision and reach the conclusion that sanctions are not working. In that event, which to you is the least bad option: a nuclear-armed Iran or a military strike?

Mr Cameron: They are both extremely bad outcomes. I think the Foreign Secretary has put it that it would be a calamity for Iran to have a nuclear weapon, but it would be calamitous to have to take-to take military action to prevent it. My point is that, before we even get to that point, we should put the maximum amount of effort into the current approach of sanctions and pressure. It is a very simple point that the more pressure we pile on Iran through sanctions, the tougher they can be. The more the pressure that can be applied, the greater the threat there is, the more they have an incentive to take a different path. I can’t tell you for certain whether that is going to work, but it is certainly the best option that we have. As I said, I think it is impressive that the European Union, including countries such as Spain, Greece and others that were importing quite a large quantity of Iranian oil are going to stop doing that. We need to maximise the pressure.

I don’t want to raise false hopes, but clearly the Iranians have reacted by making a new offer of discussions, and Cathy Ashton has replied on behalf of the E3 plus 3 to try and take them forward. We have to be very clear that this is acceptable only if they are going to have civil nuclear power but no route to military nuclear power. That would be the best outcome, but the Iranians have to make a big change in their strategic thinking.

Q379 Richard Ottaway: The Iranians have been engaging in diplomatic talks for many years now, and it clearly has not come to anything.

Mr Cameron: I think one of the reasons why that has not come to anything is that the world has not been sufficiently united to send a clear message to the Iranians that says, "This is what you need to do in order to convince us that you want civil nuclear, not military nuclear." We have had that whole play-around with the research reactor and the talks in Istanbul and all the rest of it. I think there is now a greater sense-you feel this when you go to the region-that the world wants to send a very clear message about what is and what is not acceptable. We need to maximise the pressure, and we should try to give that path some time to work.

Q380 Richard Ottaway: But if it doesn’t work, could we live with a nuclear Iran?

Mr Cameron: I don’t want to see that come about, so I don’t believe in giving up on this track. We have been very clear about what we think today. Today, we think that military action against Iran by Israel would not be the right approach. We have said that both publicly and privately to the Israelis. We think this track of sanctions and pressure has further to run, and we think we should run that as hard and as fast as we can, to persuade the Iranians to change track. But we don’t take anything off the table-the Government are very clear about that in terms of the future-but let us maximise the pressure.

Q381 Richard Ottaway: Last week, President Obama confirmed that his policy was to prevent Iran from obtaining a nuclear weapon, and he confirmed that he would not hesitate to use force to implement that policy if necessary. I know that we already have units deployed in the Gulf, but would we provide any logistical support or assistance to the Americans in that eventuality?

Mr Cameron: That is not a decision that we have made. I think the American position is very clear. They say, "Maximum pressure through sanctions, with a path of negotiations open," but they believe, rightly, that it is unacceptable for Iran to have a nuclear weapon, and they have made that clear. In terms of our dispositions, we do have minesweepers in the Gulf. We are part of international forces that believe it is important that we keep sea lanes open, and obviously we work with our allies. We haven’t made decisions about any military action, but clearly we would want to consider not least how best to protect our own interests and our own people.

Q382 Richard Ottaway: Would you envisage increasing the number of units deployed in the Gulf?

Mr Cameron: That is not something we are contemplating at the moment.

Q383 Malcolm Bruce: Iran is a divided society. We have seen that even in terms of elections within the existing regime, and there is a strong opposition, even if it has been suppressed. What do you think the effect in Iran would be of an attack? Is there not a danger, in that you have a situation at the moment where there are Iranians who would like to see Iran changed, but if they were subject to an air attack they might well take a rather different view about how their country was being treated?

Mr Cameron: I would rewind a bit and say, "Are we doing enough today to communicate, not just to the Iranian Government, but also to the Iranian people, what the alternatives are?" I think perhaps we could do more. The BBC Persian service is extremely popular and successful, but I think we need to communicate to people in Iran that there is a peaceful, civil nuclear future, where Iran can rejoin the community of nations, but in order to do that, its regime has to give up the idea of military nuclear power.

We have to do the right thing for our own national security, and in a way, that is what this comes back to. To take Richard’s question: I do not believe that an Iranian nuclear weapon is just a threat to Israel. It clearly is, because the Iranian regime have said that they want to be part of efforts to wipe that country off the map, but it is also clearly very dangerous for the region, because it would trigger a nuclear arms race, and it is a danger more broadly, not least because there are signs that the Iranians want to have some sort of intercontinental missile capability. We have to be clear that this is potentially a threat much more widely, if I can put it that way, than just Israel and the region.

Q384 Malcolm Bruce: But if President Obama and Prime Minister Netanyahu have both said that they rule out no option to prevent Iran from actually developing a nuclear weapon, what-

Mr Cameron: That is our position too, just to be clear. As I said, there are three parts to our position: our sanctions, the offer of negotiations if the Iranians are serious, and not taking anything off the table, including military action. That has been the British Government’s position for some time, and I think it is the right position. I hope I have explained what I hope will be the outcome, but we have to be very clear that nothing is off the table.

Q385 Malcolm Bruce: My question is what consideration has been given to the likely impact of such a strike, not least in Palestine? For example, has our own National Security Council considered what the implications would be for the United Kingdom’s security?

Mr Cameron: Of course, the whole point of a National Security Council is that you consider all the elements-foreign, international, domestic, security-of any course of action, and obviously, were that to come about, that is exactly what we would have to do. That is one of the reasons why we brought the National Security Council into being. For instance, that is why we have had such a focus on Somalia, because when you start thinking of foreign policy in national security terms, you are driven towards those things that both make a difference to a safer world, and also make a difference to a safer Britain.

Q386 Geoffrey Clifton-Brown: Prime Minister, there is evidence that sanctions against Iran are beginning to work-the rial has dropped by 40% in the last few months, inflation has reached 21%, and unemployment has reached 26%-so is there not every reason to continue at the moment to see whether those sanctions will have an effect, and to negotiate at the UN as hard as we possibly can? We know that Iran has legislative elections this year, and any strike would drive the Iranian people towards the current tyrannical regime. A strike would be likely to cause Iran to withdraw from the nuclear non-proliferation treaty, and the IAEA would then have no access. Finally, any strike is likely to cause huge retaliation by Iran and its proxies against Israel and probably other western states as well. Is there not every reason to continue to see whether sanctions work and to continue down the UN route as long as we can?

Mr Cameron: I think that is right. If the sanctions do not work there will come a moment of a very difficult decision, but right now the sanctions are, I think, having an effect, as you say. We should not revere Iran as some sort of successful mini-superpower. This is a disastrous country that has huge rates of using the death penalty, massive unemployment and huge economic dislocation-it cannot even get oil from one side of the country to the other. It is, in many ways, a deeply flawed economy and a deeply flawed society, and the sanctions will have their effect. However, I also agree that it is not the right thing for Israel or anyone else to launch an attack right now, and we have made that position very clear. Clearly, there are further decisions and work we will have to do, but right now, our view has been very clearly communicated to the Israelis. We quite understand their concerns and their worries, but we are very firmly of the view that sanctions and pressure have further to go.

Chair: We need to turn to a domestic issue, which is what happens to accountability under the Government’s reform programme and the changes in the way that a lot of public services are administered? I will ask Margaret Hodge to start.

Q387 Margaret Hodge: The Government’s policy is to localise services, break up state-run services and introduce a new role for the private sector in the delivery of public services. In that context, how do we follow the taxpayer’s pound when you have literally thousands and thousands of semi or entirely independent units delivering public services-foundation trusts, academy schools, or indeed welfare-to-work providers?

Mr Cameron: The first answer I give to that is that the best way to follow the taxpayer’s pound under our system is literally to follow it. One of the reforms we are making that you did not mention is greater transparency in terms of the spending of money. All contracts over £10,000 are now published, whereas they were not before, and all Government spending on items of £25,000 and above is published, so people-whether it is your Committee, this Committee or members of the public-are much more capable of following where the money actually goes. We are also then publishing the results that are achieved, whether that is GPs’ performance, crime maps or the rate of hospital infections. We are increasing the amount of data published. I am sure that we will talk about how we make sure things are accountable here in Parliament and through the work of Committees and the like, but to me, real accountability is the citizen being able to choose between services on the basis of much better published information about outcomes and making sure that the taxpayer can see his or her pounds going through the system and whether it is providing value for money.

Q388 Margaret Hodge: I accept that that is the case in relation to local government services, for example, but let me take some other instances. Academy schools will be accountable for their results-you are quite right-and Ofsted will publish that information, but how can we ensure that academies are providing value for taxpayers’ money?

Mr Cameron: I think that people can increasingly see the funding per pupil that goes into the school. If we are successful in introducing, over time, a more national funding formula for schools, it will be even clearer. If you think about it, the parent, the teacher and the local community all know, for example, that a £5,000 per pupil amount follows the pupil into the school. They can see how many pupils the school has, what the budget is and what the results are; they can compare them one year to another and one school to another. To me, that is a much better system of accountability: parents having the information and being able to choose rather than believing that you can hold schools to account from Whitehall or the town hall.

Q389 Margaret Hodge: I want to deal with other services, but parents-you and I-will be interested in the results of the schools. What I am really talking about is value for the taxpayers’ money. I have to tell you that we have had the first instance, through a whistleblower, of a federation of academies where some of the money has been used to buy property in France and then some of the money has also been used to fund governors travelling to this property in France. In the disposal that we have got, there is no way of ensuring that sort of value for money. Parents can look at results; parents have always looked at results and that is a good thing and I support the transparency. It is actually ensuring value for money that is the question.

Mr Cameron: We need transparency at the school level. We need to be able to see how much money is going into schools.

Q390 Margaret Hodge: Not for an academy trust. That is the whole point. The structure of an academy is a private institution. I will give you another example-an NHS trust. Who takes responsibility to protect the taxpayers’ interest if an NHS trust hospital goes bust?

Mr Cameron: The problem about the money-if we are breaking down into smaller units and publishing the money that is going into an organisation, then we have a far better likelihood, I would argue, of making sure that money is well spent. You can look at the money going in and you can look at the results that are coming out. In the case of NHS trusts, there is clearly going to be within the NHS a proper regulatory system via Monitor and other ways of making sure that the system is safe, and that is very important. There is an idea that somehow life was more accountable when you really had no idea how much money was going to which school and what the results were and what local government was doing about it. We will have a much more transparent and clear system. Of course there will be problems-in a world where you are trusting individual institutions more, whether it is the individual school or the individual hospital, there will be occasions when things go wrong.

Q391 Margaret Hodge: I know others want to come in, but I will pursue this quickly. The NHS trust-again, there will be ways of protecting the patients’ interest, so if an NHS trust becomes insolvent the commissioning body will come in to protect that, probably at expense to the public purse. What I am interested in if an NHS trust becomes insolvent, is just looking after the taxpayer’s interest, which is very different from the citizens’ or the patients’ interest-

Mr Cameron: You need a regime to sort that. I think Hinchingbrooke is probably quite a good example.

Q392 Margaret Hodge: No, that is before it became insolvent. An NHS trust is completely independent, and I am told that the Public Accounts Committee can interview however many NHS trusts we end up with-252-individually if we have the time. That is the accountability so far. If a trust becomes insolvent-in the new landscape, it could-as I look at it, I cannot see a mechanism that protects our taxpayers’ investment.1

Mr Cameron: I think that is something that Monitor will do. If you want, I will write to you about that issue, but I think that is properly covered in the health reforms. It is a role that Monitor can perform.

Where I would agree with you is that if you want, as I do, to move from a top-down, command and control world to a world where schools, hospitals, independent providers in the welfare system and so on have greater power and ability to change things, you have to accept that there will be occasions when things go wrong and you need to have a mechanism for dealing with that. However, we also have to accept that you are going to get greater inventiveness and creativity by trusting people on the ground with those decisions.

Q393 Chair: That is an interesting conflict; is there not a tension between accountability and giving the initiative and freedom that you want to give by using either private sector bodies or voluntary and third sector bodies, which are perhaps more flexible in what they can do-

Mr Cameron: I don’t think there is-

Q394 Chair: But if you make the accountability strict, it is referring up to the Minister and the central Government Department all the time, isn’t it?

Mr Cameron: But real accountability, to me, is making these organisations accountable to the user. I want schools to be accountable to the parents. The idea that the Secretary of State, however brilliant he or she is, can really hold to account every school in the country is clearly nonsense. What I want is a situation where parents in every local area feel that there are schools competing with each other for the custom of that parent, and they are accountable to that parent because they are having to produce results for the very transparent amounts of money that are going in. The way we make public services more accountable in Britain is, where possible, to move from bureaucratic accountability to democratic accountability; and even better is when you can make that individual accountability-where parents and patients are making choices on the basis of published information.

Q395 Mr Jenkin: Good afternoon, Prime Minister. Since we last discussed this big change programme of yours, turning government on its head, the Government have announced that they are going to have a civil service reform plan published, which I very much welcome-it was one of our recommendations. Returning to the question of accountability, does not the ambition to delegate and decentralise much more bring into question the whole traditional doctrine of ministerial accountability to Parliament? Doesn’t it actually change it?

Mr Cameron: I don’t think so, because as well as studying Norman St John-Stevas’s Select Committee reforms, I understand ministerial accountability to mean that the Minister is accountable for the actions of his Department and civil servants and is accountable to the House, and the Select Committees help to bring that accountability forward. You can also summon and discuss issues with civil servants, but the Minister is accountable for the actions of that Department. You do not detract from that by making sure that those things that come under his or her umbrella-schools, hospitals or welfare programmes-are also more accountable to the people who actually use them.

Q396 Mr Jenkin: The traditional model was demonstrated by, if you remember, the Crichel Down case, but when was the last time a Minister resigned because of the failures of his or her civil service? That does not seem to happen any more.

Mr Cameron: What we have is a better system of holding Ministers to account. The key thing for Ministers is to get to the truth of what went wrong and why, and explain that to Parliament. Ministers have resigned when those answers have not been good enough. I can think of, I suppose, the resignation of Beverley Hughes in the last Government about-I cannot remember exactly what it was. There have been ministerial resignations over Departments that have not been working properly.

I think the most important thing-we might, for instance, talk about the A4e case-is to try to get to the truth of what went wrong and why, and try to explain that and be accountable for your actions. That is Ministers, yes, but under Ministers it is important that they explain what happens in a Department. That individual civil servants should be individually accountable to the House of Commons or to Select Committees would not be a good move. That would be a sort of politicisation of the civil service, which I do not think would be welcome.

Q397 Mr Jenkin: But isn’t this the nub of it? You are delegating, rightly in my view, much more autonomy-indeed, to have a modern and effective civil service, we want much more delegated mission command and much more autonomy at local level-but doesn’t that mean that we have to be able to hold those people more directly accountable than the traditional Haldane model would suggest? We no longer live in a closed government system-you have open data, openness and transparency, and freedom of information. Prime Minister, if you can separate the essence of policy from the essence of, say, implementation and delivery-it is a blurred area-we are going to need a more flexible doctrine of accountability to Parliament in order to hold your policies to account.

Mr Cameron: That is a very good point. First, in many ways I think you can separate policy from implementation. If you take, for example, welfare reforms, the policy is to have voluntary, private and state organisations being paid by results for delivering welfare programmes. That is the policy that Ministers have set and civil servants are busy making that happen, so you can separate policy from implementation.

On being more flexible in a modern age about how we are accountable, yes, I would agree with that. In the scale of government as it now is, to say that a Minister has to resign every time anything goes wrong anywhere in their Department would be rather heroic, but to go all the way from that to saying, "It’s not just Ministers who should be accountable in front of these Committees. It’s civil servants individually, as civil servants," would be too big a step. I think what we need is greater openness about how decisions are made and about who makes what decision. Then we can explain, when things go wrong-and they always go wrong in Governments-that this was the policy, this was the Minister’s decision and here is the causation chain of what happened; and either that can be explained satisfactorily or it cannot.

Q398 Margaret Hodge: Can I ask about A4e, which I was going to bring up as my last thing? Since we had our inquiry-we fell on this; we did not seek it out-I have had about 100 e-mails from employees, ex-employees and clients either complaining about inadequacies in the service or making other allegations of fraud. I just wondered how you expected this to be uncovered in the new landscape, where a contract has gone to a big provider. We stumbled over what was happening in that organisation, and I have literally been inundated. How do you expect that to be uncovered?

Mr Cameron: It should be uncovered. First, the way that contracts were handed out in the past was unacceptable, because they were not payment by results.

Q399 Margaret Hodge: This is present contracts.

Mr Cameron: My understanding is that all of the problems and accusations relate to contracts in the past, rather than the new current contracts.

Q400 Chair: We haven’t got to those problems yet.

Mr Cameron: The contracts are completely different in that, under the new contracts, these companies, whether it is A4e or anybody else, get paid in full only after people have been in work for a considerable period of time. In fact, they do not receive some of the payments until people have been in work for 104 weeks-two years-so it is a totally different world of payment by results, rather than just payment for activity. Be that as it may, the fact is that in this case there has been a police investigation and, when there is a police investigation, quite naturally there should be publicity around that police investigation-we have an open justice system-so these things do come out. I think that is right, and that is why I have asked the Cabinet Secretary, Jeremy Heywood, to look at not just this Department but other Departments, and at whether information, when things like this happen, is passed up the line and outwards, as it were, fast enough. That is an important piece of work.

Q401 Margaret Hodge: Do you honestly think it is enough to depend on whistleblowers or police investigations to ensure again that our taxpayers’ money is being properly used in these contracts? There comes a point-I look at these hundred e-mails and think, "When is it systemic?" At what point do the Government accept that there has been a misuse of public money?

Mr Cameron: We don’t just rely on whistleblowers. That is why we have the National Audit Office, why we have your Committee, why we are publishing all the information, and why contracts over £10,000 are published. That is much more open government-these contracts are open for people to see. Clearly, if there is evidence that this is systemic, the contracts must be ended and that needs to change. My understanding is that there have been 125 total investigations into all aspects of the DWP activity since April 2006. I think there have been 11 referrals in relation to A4e. Those led to eight investigations, of which three resulted in no case to answer, five in a case to answer, two resulted in referral to the police and one in a prosecution. Those are the figures.

We are not just relying on whistleblowers. Increasingly I want to see contracts and results that are published, so everyone can see what is happening. The great thing if you go to these welfare-to-work providers now is that you can see in real time exactly how many people they are training and putting into jobs. Increasingly we are going to see the decision about who awarded a contract, how much money was involved in that contract, who does what under that contract and we will find out more quickly if anything is going wrong.

Q402 Mr Jenkin: May I bring us back to the question of civil servants and implementation? I think you will agree, Prime Minister, that in a modern Government with a modern Parliament, there needs to be a degree of direct accountability between civil servants and Parliament about implementation-their own performance. It is impossible to expect Ministers to be personally accountable for the performance of every civil servant in their Departments. Is that fair? Have I understood that correctly?

Mr Cameron: I think that is fair, but we need to do some things to make that more realistic. Let us take one thing the Government have done. There were far too many quangos, and they were not just expert bodies advising Ministers, but making policy. Through Francis Maude’s very successful exercise, we tried to cull a number of those quangos to save a lot of money and also to bring back into the Departments those things that were policy issues.

For instance, the Environment Agency ought to be more about its expert function as an environment agency, but the policymaking for the environment should be in the Department, for which the Minister is responsible. That will give you as parliamentarians a better ability to say, "What is the Minister accountable for? What are the policy decisions? What does this quango do, and how can my Select Committee get to grips with whether it is doing a good or bad job?" I agree with the way you set it out, but we have done some things to make that more possible. Maybe we need to do some more.

Q403 Mr Jenkin: The chat is that you are finding some frustration with the ability of Government Departments to implement things, and that you want to have an app on your BlackBerry that will give you the data about how Departments are delivering on their metrics. Is that not going back to the old command and control system? Don’t you want that accountability to be more diffused and more direct to Parliament and the public?

Mr Cameron: That is a very good question. I think it is different. The way the previous Government ran things included an enormous amount of public service agreements and targets. They were not just about outcomes, but about processes. They were telling whom to do what, when and how, and what outcome that was meant to achieve. As we have just been talking about, this Government’s strategy is to devolve those powers to schools, hospitals, welfare providers and others, because we believe that that decentralised and devolved model will lead to better results.

Do Government have a role in making that devolution happen, and in finding out the results when that devolution does happen? Yes, absolutely. My frustration is that often the changes I want to see put in place-creating more academy schools; having more free schools; making sure more welfare-to-work provision is carried out by innovative businesses-are not happening as fast as I would like. Government takes time: there has to be consultation, and Government lawyers have to give their opinions-and then more opinions. A lot of these things take time. In two years, the Government have set out a radical agenda and are implementing a large part of it. That is very different from the public service agreement targets of the past. But does No. 10 specifically have a specific role in trying to drive the change and then examining the results that are being achieved from that devolution? I think, yes, that that is an important role for the centre.

Q404 Chair: To take the example of the Justice Committee’s area, your officials have been involved-I think they have wanted to make their involvement publicly clear-in moving policy on issues such as mandatory sentencing, knife crime and the initiative that they obviously told The Times about last week on longer curfews. So, who is accountable: the Secretary of State for Justice or the Prime Minister?

Mr Cameron: It is the Cabinet as a team. Every member of that team has their responsibilities but, as the team captain, you are occasionally allowed to dive into different Departments and make your views known. On some of those law and order things, that is exactly what I have done. I do not think that is an unreasonable thing for a team captain to do from time to time.

Q405 Mr Jenkin: Lastly, Prime Minister, a lot of this is about effective cross-departmental working. Whenever I describe this as endemically bad in Whitehall, I very rarely get any disagreement. How do you think we can improve cross-departmental working, particularly when we are dealing with implementation?

Mr Cameron: There is a lot more to be done, but I would not be as downbeat as you have been. For instance, if we take deficit reduction and the difficult decisions we have had to make, there has been very good cross-departmental work on pay policy and pensions policy. Those are very difficult decisions that affect Departments in different ways, and that has been very cross-departmental.

I would argue that the National Security Council is a massive exercise in cross-departmental working. Remember that the NSC includes a conflict pool budget, a pooled budget from which we spend money on issues such as Somalia because it is in the interests of the FCO, DFID and MOD for that to happen.

Just this morning we had a Cabinet meeting in which we discussed the Iran situation, which we have just been talking about, and we had a second go at collectively going through all the things that were in the growth review at the 2011 Budget on planning, housing, red tape-all these things-and saying, "Right, how many of these things have happened? How complete are they? Who is going slowly? Who is going fast? How do we drive this through?" That was very much the team, as it were, coming together to examine the activities of everybody to make sure that we are working as a team. On some things, that involves different Departments going off and working together better than they have in the past, so I think that Cabinet can be an effective forcing mechanism to drive the sort of cross-departmental work that I know you want to see.

Q406 Mr Betts: Prime Minister, at the previous meeting I asked you about the potential publication of the Government’s report on how well the Departments were getting on with decentralisation. I thank you and the Minister for Decentralisation as I understand that you are going to release that report.

Mr Cameron: I know that that has taken rather a long time, and I am almost as frustrated as you are. The report is very good-I have read it. Because it ranks different Departments on their enthusiasm for driving this agenda, it has obviously caused some stirs in Whitehall, but it will be coming soon to a bookshop near you, I hope.

Q407 Mr Betts: Thank you for that.

In a few weeks’ time, the great cities of this country will have referendums on whether their citizens want elected mayors. In my own case of Sheffield, I think that not a single citizen wrote to Government Ministers to say that they wanted a referendum, but I will put that on one side.

Ministers have been trailing rather loudly the idea that if elected mayors are adopted by cities, as they will know who is accountable for spending in those areas, extra powers and responsibilities will follow that decision. Prime Minister, will you give a clear undertaking that if cities decide that they do not want an elected mayor, it would still be quite appropriate for those cities to have extra powers, responsibilities and financial control at local level?

Mr Cameron: Yes, I can give that assurance. I believe both in giving cities more powers and in elected mayors, so I hope that as many cities as possible will vote for elected mayors. I think that the accountability of a great city leader who is praised when they do well and punished when they do badly helps to build the identity of great cities and helps to get things done. When we look across our country, I think it is the case that Bristol is the only one of the eight largest cities outside London that has GDP above the national average. If you look at other countries, you often find that their cities are driving GDP, rather than lagging behind it. I want to see this happen, but I can absolutely assure you that on the city deals-where cities are coming to us and saying, "We want to have this planning power, that housing power and this extra power"-we can do those deals with individual cities whether or not they are going to have a mayor.

Q408 Mr Betts: That is very helpful, Prime Minister. I want to move on to the issue of community budgets, which were trailed as an idea for communities to have more say over spending in their areas at a local level and to be able to co-ordinate that spending perhaps better than Whitehall can sometimes do. Most of the community budgets that are now being developed with Government support in local authorities are to deal with troubled families. We all want to see the issue of troubled families tackled, but you said a few minutes ago that you are against a command and control, top-down approach. Actually, the community budgets that will be developed for troubled families will have clear Government targets, as Louise Casey said when she recently gave evidence to my Select Committee. I think that Baroness Hanham said that they were not targets now, but expectations of outcomes-I am not quite sure what the difference is.

Mr Cameron: It is payment by results, actually. First, we are doing community budgets outside the troubled families initiative.

Q409 Mr Betts: But the vast majority-90%-is troubled families.

Mr Cameron: That is because there is a real problem with the issue of troubled families, and the Government as a whole need to gird their loins and recognise that we should do something about that. Why? Well, there are 170,000 or 200,000 families, depending on who you believe, that are deeply dysfunctional and are costing the country billions of pounds in terms of law and order interventions and all sorts of other interventions. It is a classic example of where a bit of "rolling up the sleeves" activity to get people going can deliver a very strong-and, yes, quite localist-solution. Yes, we are using a bit of a forcing mechanism, as it were, and saying, "Here’s a bunch of money that we’ve got that we’ve put together at the centre by bullying Departments and taking bits off them. If you in local government want to go down this path, produce some money of your own." We are not dictating what methods should be used or specific outcomes. We are literally saying that it should be a payment-by-results model. The sorts of results that we ought to be looking for with these troubled families are ensuring that their kids are going to school and that someone is getting a job.

It seems to me that that is a good mixture of Government creativity from the centre, saying that we have a real problem as a country, and saying that we should do something to solve it, through working with local government in a relatively localist way, and saying, "We produce some money, you produce some money; let’s do this by results." Through that, we could try to crack through a large number of these families before the next election and the end of this Parliament to demonstrate that we can put some of these lives back together.

Q410 Mr Betts: No one is disagreeing with the general intention to try to deal with troubled families and hopefully to improve their lives as well as those of the people they sometimes affect. The real issue is whether, in the end, central Government will lay down very specific targets-that was the impression we were given-linked to payment by results, with which we have seen some problems. Even A4e, which gave evidence to us, said that it thought that it was an awful lot more complicated to do a payment-by-results system for troubled families than for getting people back to work. These look very much like top-down targets imposed by central Government, rather than a localist approach of trying to get people to work together at local level to develop more sophisticated solutions that are relevant to the local level.

Mr Cameron: I would say that it is both. It is more complicated than welfare to work in many ways, because the trouble with these troubled families is that there are lots of things going wrong. They are in trouble with the law, no one is working, the kids are not going to school, and there are problems with the neighbours, drugs, alcohol and persistent poverty. There is a whole batch of problems together.

Going back to the argument about accountability, if I am going to take some money off the Department for Communities and Local Government, the Department for Education and the Department for Work and Pensions and say, "Let’s really make an effort to help turn these families round," we have to have the accountability of working out what that money will be spent on. All we are saying to local authorities is, "You come in with us for your share of the budget and pool it among the various services that you have, but let us ensure that it is on a payment-by-results model where we are looking at getting kids into school and families into work."

Q411 Mr Betts: You mentioned, Prime Minister, that community budgets are about not only troubled families, but other issues. The whole place community budget that has been announced for the Greater Manchester authorities is quite an interesting and exciting venture.

To come back to the point that if money is taken off one Department, it will want to see what it will get for it, does that not cut across the idea of community budgets, when actually we want to see the silos of Whitehall Departments broken down so that the money can be put into a pot at a local level? It might just be that local communities decide that they want the money spent on something else. There is a challenge of accountability back to the parent Department, but surely there is also a challenge to ensure that we have money spent in line with the wishes of local people, which will be different in different parts of the country.

Mr Cameron: Yes, I agree. I think that is what community budgets generally should be about. As I say, I think there is a specific problem of the problem families that have fallen between the cracks of lots of different Departments. The point of community budgets to me is that there has to be a purpose to them, so there ought to be a reason why the local authority is saying, "I want this bit of money from here and that bit of money from there to put together to get something better done." There has to be a purpose to it. The classic case is health and social care budgets, where if you pool a budget, it is really worth your while getting that older person out of the expensive hospital bed and looking after them better at home because, basically, it will cost less, so the pooled budget for health and social care can stretch further in other directions. Community budgets have to have a purpose; they have to have a point. We should be relaxed about the different directions local authorities want to go in.

Q412 Mr Betts: And be prepared to trust them rather than trying to second-guess them all the time.

Mr Cameron: Yes, absolutely, and we are not trying to second-guess them on community budgets in general, just on this issue of problem families. We are saying, effectively, that this is a problem that is being dealt with well in some parts of the country, where innovative programmes have been tried, but is being ignored in other parts of the country. I think the Government can have a co-ordinating, forcing approach of saying, "We’re going to come up with some money centrally that will help you to deliver this, but if we’re going to come up with that money, we need to know that it will be payment by results because otherwise it will just be more money." We are already spending £9 billion on these families. I have a job to convince the Treasury that a little bit more will make a lot of difference. It is a pretty legitimate argument to say that you need some payment by results to prove that this will make a change.

Q413 Chair: It is an interesting theory of government to think of the Prime Minister going on bended knee to the Treasury.

Mr Cameron: As I often have to point out, I am still First Lord of the Treasury. People are mistaken about this. No. 10 is a relatively small operation. No. 10 trying to work better with the Cabinet Office, which is what the National Security Council does and what the appointment of Jeremy Heywood, which we talked about last time, is trying to do, is about making sure that the centre of Government tries to make sense of the whole.

Q414 Mr Allen: Following on from Clive, Bernard and Margaret, I am a great supporter of payment by results, particularly in social policy and early intervention, as you know. I have one concern and I wonder whether you share it. If we look back at the PFI period, there were many occasions when people in the public sector were skinned by the private sector and private contractors. If you want payment by results to work, as I know you do and as I certainly do, isn’t it very important that we get high levels of competence both into the public services and the private providers, so that we can ensure that we get absolutely the best deal possible? If that is your view-I hope it is-how do we ensure that there are proper lines of account to ensure that there is real value for money for taxpayers, because we ended up with long-running mortgage payments under PFI, which I don’t think any of us would want to see repeated under payment by results?

Mr Cameron: It is a very difficult question. The PFI, as you say, has led to some enormous financial liabilities for the country. In the short term we are sorting that out by having a proper review of it, by not signing off PFIs unless they are genuinely good value for money and changing the way it is done. That deals with it in the short term. But your point is: what next?

Q415 Chair: What lessons do we learn from the abysmal contract writing that must have been involved in those PFI mistakes?

Mr Cameron: Part of the lesson is that there was just such an attempt to get Government spending off the balance sheet, as it were, that we need to be very wary of that. That is what the PAC and the NAO can do. Last November the Treasury published the first audited whole of Government accounts, which have enabled people to see for the first time the total liabilities of the PFI project. So, a review to make sure we learn the lessons and a new system for doing it. But to answer Graham’s question more directly about how we make sure that the expertise is there, I think in the civil service reform agenda, which we are now able to pursue, with Sir Bob Kerslake devoted to that, we should sometimes be more open to recognising that we might want to contract out some policy work and to get some expertise in. There have been examples where some very creative policy work has been done, by Ministers saying, "I know exactly what we are trying to achieve here"-for instance, the Tech City initiative-"so let’s get in some experts, get in some help, on a short-term basis and not great long consultation contracts, to make sure that we have that level of expertise."

Q416 Mr Allen: The other side to this is that payment by results, if it is applied through benchmarking, as it must be, and the civil service is setting the benchmarks, you could actually have the opposite problem, which would be quite a stifling effect, where people are setting benchmarks way too high so that it is not possible to make the payments because you do not get the results set for you. Again, it is a question of skill and competence. In the public sector and in the civil service, which you described at one point as the "enemies of enterprise", do you now feel that there is somehow the capacity to write good contracts from the other end and to incentivise people rather than to be very risk averse and put benchmarks too high?

Mr Cameron: First of all, let me speak up for the civil service. We are very lucky in this country to have a professional, impartial, dedicated and hard-working civil service. It copes with transitions from one Government to the next, and it is very dedicated in the service given.

I think that the world is changing, and it is not so much now about huge, great, vertically integrated Departments devising a policy, and then delivering the implementation and all the rest of it. We do need to be smarter at commissioning, at how we write contracts and about how Government work with other organisations. That leads to challenges on accountability, as we have discussed, and to challenges on competence. A skill change needs to take place in the civil service, and I think that it is completely up for that. I have been discussing this with senior civil servants and I think that they want to be in a more networked, open world, where they are working with others and commissioning-working not just with Pricewaterhouse but with small, innovative organisations as well. So it is a skill change but one that I am sure that the civil service is perfectly capable of delivering.

Q417 Mr Allen: And working to time-getting contracts out of the building, and not taking seven or eight months to do so.

Mr Cameron: Yes. There is definitely a challenge, but part of the reason why sometimes things do not happen as fast in Government as you would like is that civil servants are rightly very concerned about the spending of public money. So, if you take for instance the regional growth fund, that is pretty good-half the projects are now under way-but it has been criticised in the past: "Why hasn’t enough money got out the door?" Well, when you bang the table and ask the question, the answer is often, "Well, we haven’t yet had the due diligence report. We are not yet convinced that it is safe to spend this public money." You have got to get the balance right: on the one hand, having good systems to ensure that public money is not wasted but, on the other hand, not becoming so cautious and hidebound that we wait for every last legal opinion, consultation and check before we get on and do something. That is a frustration, and we need to review how some of the bureaucracy gets in the way of faster action.

In one example, when we announced the housing strategy, which includes a rebooting of the right to buy, with greater discounts, more building of social housing using that money and a number of other initiatives, I think it led to 14 different consultations having to take place. I think we are in danger of consulting ourselves into inactivity, if we are not careful.

Q418 Mr Stuart: Good afternoon, Prime Minister. More than half of our secondary schools will soon be academies. Would you like to see the same thing happen to our primary schools?

Mr Cameron: Basically, yes. I believe that schools perform best when there is clear leadership and ownership of the school by the board of governors and the team of teachers running it. I have always believed that independent schools within the state sector is part of the answer to driving up standards in our country. It is not the whole answer. You have got to have a standards revolution as well, as Michael Gove is bringing in, and you have to raise the bar on failure. You have to be very tough on failure. You have to have great rigour in what we teach and the exams that we have. There should be no dumbing-down of standards, and we have to accept that that sometimes means that results might get worse before they get better. There is a whole lot of stuff that needs to be done, but independent schools within the state sector that can own their buildings, employ their staff, and make their decisions is, I believe, a very big part of the picture.

Q419 Mr Stuart: You say that there are things that need to be done. As the number of academies grows, do we need an intermediary body to monitor provision more effectively and more regularly?

Mr Cameron: That really prompts the question about what the role of local authorities will be. We are going to move to a world where a local authority’s role in education is going to be quite changed. They are still going to have responsibilities for ensuring that there is a place for every child and ensuring that there is proper provision for special educational needs, but I hope that, as these schools become more independent, local authorities, instead of being overly protective of schools and poor performance by schools, will become greater cheerleaders for higher standards. I have been having this big push on what I call coasting schools. I think there are many schools in this country that do perfectly okay, but that could actually do a lot better.

Q420 Mr Stuart: At the moment, the Government’s prescription for failing schools is to give them greater autonomy and have an academy. When we have lots of academies, we will start to have more and more failing academies. Who is going to diagnose that there is a problem, because Sir Michael Wilshaw has said that by the time Ofsted arrives it will be too late? What is this role? Will it be the role of the local authority or is it going to be the role of somebody else to monitor and support and broker support for schools that are failing?

Mr Cameron: The key thing is that we must not allow schools to fail year after year. Michael Gove has put in place a failure regime where-I cannot remember the exact figures-you are only allowed to be in special measures or be a failing school for a very short period of time before you are taken over by another academy. That matters more than who actually does it. It may be that it is the residual role for a local authority to help to ensure that that happens, but the key is that it does happen. What we cannot have is schools that fail year after year.

Q421 Mr Stuart: So do we need an intermediary level? Is that the local authority or is it someone else?

Mr Cameron: That is to be decided. I do not necessarily see why we have to create additional bureaucracy. If anything, I want to slim down the intermediary bodies. I think local authorities have still got some slimming down that they can do in the area of education as we go to a model of more schools that have greater independence.

Q422 Mr Stuart: Further to Margaret’s questions earlier, should Ofsted be given the power to inspect academy chains as they become more important within the system?

Mr Cameron: I would trust Michael Wilshaw to look where he needs to look.

Q423 Mr Stuart: He does not currently have the power, and he said in evidence to us last week that it would need legislation for him to be able to do so. He said: "It is not part of our remit at the moment to inspect chains."

Mr Cameron: I am very happy to look at that.2 It is an excellent appointment. I admired him hugely as a headmaster. I had him in No. 10 with some head teachers recently to talk about his role. If that is a power that he needs and wants, I would be very happy to examine that. Academy chains have a big role to play. If you look at the Harris academy chain-I have to declare an interest that he is an old friend of mine-they are achieving incredible things at those schools, and it is partly because they are able to use the expertise of what they have learnt in one school and apply it in another. There is a model in the private sector of this with the Girls’ Day School Trust, which helped to provide a wrap-around of some great schools, and I think there is a very good model here for the state sector. I hope that we are not going to start demonising the Harris academies, the ARK academies, and some of these other chains. I think they do a very good job, but they have to be as open and transparent as everyone else.

Q424 Mr Stuart: There is a tendency in education that all new initiatives work, whichever direction you travel in, because you get new dynamic people coming in and leading it-Harris chains, ARK chains and the rest. As it grows, that is when you really get to find out whether the policy is an all-round cure-all, because you will have more failure, less dynamic people, and less brilliant sponsors, and you will need a greater system to monitor potential failure.

Mr Cameron: I think that is a slightly gloomy picture-

Chair: I am afraid that I am going to take that question as a comment, because I need to give Stephen Dorrell a chance to move into the health area. I think the point has been made.

Mr Cameron: I just make one point, which is that the whole point about having a model based more on choice and competition is that you at least have a self-correcting mechanism. If you publish the results of every school, if you can see the money that is going into every school, if you have parents choosing to go to that school or not, and if you have regular Ofsted inspections, you are going to find out quickly if something is going wrong. What was wrong in our education system in the past is that you had schools failing year after year after year. We now have the information, the transparency and the choice to make sure that there is an ability to correct that.

Q425 Mr Dorrell: Prime Minister, I was very struck, in the answer you gave to Clive Betts about opportunities created by community budgets that look beyond conventional silos, that you used the example to illustrate the principle of joint commissioning and the opportunity created by joint commissioning between social care and health care. You said that if we did that better, we would make the pound go further. I think you would probably agree that not only would the pound go further in terms of the number of patients cared for, but because patients are out of hospital, the care would be better, because no one, out of choice, goes to a hospital.

The Health Committee recently did a report, and I asked what was the oldest quote that the advisers could find espousing this principle. The oldest one we found was attributable to Richard Crossman in the 1960s. I wonder what is the magic ingredient that will drive that change, given the urgency of it, in the years ahead.

Mr Cameron: I think what is going to drive it is the way the NHS is going to be established. Because funds are going to be in the hands of clinicians, and they have an interest in raising the health outcomes in their area, they will have a better incentive than ever before of working with colleagues in local government and pooling arrangements, so that the pounds go further. There are all sorts of difficulties, and you know this better than anyone, because you have charging in local authority care, but you do not in the NHS. But parts of the country have done it. I had the leader of the clinical commissioning group from Torquay in No. 10 recently. Where it has been done, the arguments are extremely powerful. I hope this is a way of helping the barriers to be broken down.

Q426 Mr Dorrell: The example of Torbay is often talked about, and indeed it has achieved very significant improvements. But it is also an illustration because it is a relatively modest experiment. How much further could that logic go? I guess the question in the context of a discussion about accountability is the need to recognise that in order to achieve that, you need to look beyond the accountability for the individual transaction delivered to the individual patient. In a health or social care context, the system needs to be accountable, of course, for the quality of care delivered to the individual, but it also needs to be accountable to those who are "insured", who might need access to the system in the future. They are interested in the changes that are introduced. Also, as taxpayers, we are all interested in the quality of the outcome achieved and the decisions made about priorities implied by the use of resources. Accountability is often characterised in terms of accountability for service to individual patients, which must be there, but that is a rather one-dimensional view, isn’t it, of how these services need to be accountable?

Mr Cameron: One of the points of the health reforms is to correct a mistake made almost at the birth of the health service and to bring local government back into the picture. That is what the health and wellbeing boards do. I think we have a chance of delivering what I want to see, which is greater local accountability, through health and wellbeing boards, for health and social care to come together to deliver the outcomes we want. At the same time, in health as elsewhere, there is an element of personal accountability, where lots of people-there will be an increasing number of them-with long-term conditions want more personal involvement and ownership of their care plan and want to be able to have individual budgets, direct payments and all the rest of it. I hope we will get to a world of greater individual accountability, where you choose more about your health, but also better local accountability, because the health and wellbeing boards will be able to see where the money is going.

Q427 Mr Dorrell: But it needs to be both forms of accountability.

Mr Cameron: Yes. I think the point has been made that if you simply think about individual accountability, and everyone goes on to a direct payment, the taxpayer might suddenly start asking, "That’s all very well, but am I getting good health outcomes?" My answer to that is probably yes, when you see the effect of someone who gets a direct payment, and the fact that they can then get for themselves the things that the state has often been rather bad at providing for them. Let’s take parents with a disabled child and a direct payment system, where you can get the respite and the health care assistant you need. Because you care for your child more than anybody else does, you are actually going to get a better outcome for them and your family, and the health and wellbeing of the whole package, than by having it all delivered by the top-down system.

Q428 Mr Dorrell: I completely agree that there is a lot of evidence that when individuals are engaged in decisions about their own care in that way they are more contented about the outcome, and resources are very often more efficiently used. But it does not avoid the need for somebody in the system to be responsible for the change in the way care is delivered that achieves the kind of integration-joined-up care-that you were alluding to in the answer to Clive Betts.

Mr Cameron: Yes. The idea of individual budgets and direct payments does not mean that the rest of the health care system will somehow fade away; that is obviously not the case. Also, there is a connection with all of these things to resources. We have made a decision as a Government not to cut the NHS but to put extra money into the NHS. All of these long-term conditions involve considerable cost, and there will be more of them. Indeed, because we are spending more, today we are announcing that we are putting more capital into the NHS. An extra £330 million is going in, in terms of CT scanners, cancer therapy and also new accident and emergency facilities and better equipment and buildings. So we are spending the money wisely, but I think the future of the NHS will increasingly be about people being able to make greater choices locally about how they manage their own care.

Q429 Mrs Ellman: Prime Minister, the Government are very committed to raising significant amounts of private sector funding for transport infrastructure, and earlier this afternoon you spoke about the importance of transparency. How will we be able to tell if that private sector funding is going to increase the already major disparities between spending on and investment in transport between the north and London and the south-east?

Mr Cameron: I do not see why there should be any connection between the two. Look, we all want to see more infrastructure spending. We all think our infrastructure is not up to scratch, we all think it is a way of raising the productive potential of the country and I think we probably all agree that we need a rebalancing of our economy, from the south right across the country. Actually, if you look at where extra spending went in the last Budget, you can see that actually something like 62% of additional spending went to the north. I do accept that we have an imbalance in our economy, but I do not accept that we are doing nothing about it. We are spending public money.

Q430 Chair: That wasn’t the question. The question was whether new methods of raising infrastructure funding-

Mr Cameron: And I am saying that I don’t see why there should be any connection. Look, there are infrastructure needs in the north of England, but I don’t see why the involvement of private sector capital should mean that would be more skewed to the south rather than the north.

Q431 Mrs Ellman: Prime Minister, you have quoted figures. The IPPR has quoted very different figures: the last announcements on spending were equivalent to £5 per head in the north-east and over £2,000 per head in London. But if you look at where spending goes and where raising private sector funding is easier, currently with Crossrail the amount of funding raised by the private sector towards it is almost equivalent to the Government money going into it. Now I doubt if that degree of private sector money will be raised for the northern hub, for example, so there is an issue there. What is the transparency in seeing where the investment is going on a regional basis?

Mr Cameron: First, Crossrail is the biggest infrastructure project in Europe, and so it is bound to skew the figures. I happen to think it is necessary and important, and I am proud of the fact that this Government were able to give it the green light. And that massive investment, employing thousands of people and transforming our capital city, is going ahead. But since making that decision, if you actually look at the decisions we have made as a Government-I have now got the figures, so thank you to the people sitting behind me-62% of the funding for transport schemes in the autumn statement went to the north and the midlands. That is because of decisions made by the Government.

Q432 Chair: Prime Minister, you were asked a question about a future policy-the involvement of private sector money.

Mr Cameron: And my answer is that I don’t see any reason why the involvement of private sector money should skew the investment to the south rather than the north.

Q433 Mrs Ellman: But the evidence is, Prime Minister, that it is. I am not questioning whether Crossrail should go ahead-

Mr Cameron: But I don’t accept that evidence, because you just said Crossrail doesn’t have very much private sector money.

Q434 Mrs Ellman: No, I didn’t say that. I said that the evidence is that it is easier to raise private sector money for schemes in the south rather than in the north, and I evidenced Crossrail as an example. Now you are questioning whether there are disparities. That is very challengeable, and there are other figures saying something very different. But to go back to the question I asked you, we are talking about the transparency in the investment. How in the future are we going to be able to see the impact of private sector investment in relation to where it is spent in different parts of the country?

Mr Cameron: Because every contract over £10,000 is published, you will be able to see. For instance, the Mersey Gateway logistics park is £136 million of private investment. I simply do not accept the argument that private investors want to invest only in London and not in the north of England.

Q435 Mrs Ellman: But how are we going to be able to assess it in future? That is my question to you.

Mr Cameron: Because it is all public. I have just given you the figures for what the Government did in the autumn statement. For the first time, we now look at infrastructure spending right across the piece, so we took every infrastructure proposal, we ranked it in order of its economic impact and we worked out what we could afford to spend our taxpayers’ money on in the Budget. That came out with, as I have said, 62% for transport schemes in the north and the midlands. In future you will be able to see all those contracts, and you will be able to see how much private money is going in.

What I do not accept is that somehow private investors do not want to invest money in the north of England. I do not accept that. Private money will be drawn in if the terms are set up in a sustainable and favourable way. That is where we have got to be more creative about trying to lever in private sector money, including pension fund money. There is a massive wall of money from the middle east that would like to come and invest in transport. That should all be transparent, where the spending is going-

Q436 Mrs Ellman: Will it be transparent? That is the question.

Mr Cameron: Yes.

Q437 Mrs Ellman: How will it be transparent?

Mr Cameron: It will be published.

Chair: We are going to have a return appearance, but a necessarily brief one, from Ms Hodge.

Q438 Margaret Hodge: I am just going to ask one question, because we have gone round it. We have talked a lot about private sector contracts delivering public sector services, and that being part of the issue. What we often come across is a difficulty in investigating those contracts because of commercial confidentiality. Would you consider, where public sector money is being used by private sector companies to deliver public services, whether we shouldn’t have freedom of information powers to follow that money into the private sector?

Mr Cameron: I will certainly go away and look at this issue.3 I have to say that in my experience of two years, and the Freedom of Information Act and all the rest of it, it seems to me that real freedom of information is the money that goes in and the results that come out. Making government more transparent is the best thing. We spend an age-fortunately not me, but the system seems to-on dealing with FOI requests that are all about processes, but what the public, the country and Parliament need to know is how much money are you spending, is it being spent well and what are the results. I think we have approached, as a country, the wrong end of the telescope. What we are doing now includes the publication of the contracts; the publication of the outcomes; the publication of the information. You can go on a crime map; you can see where the crimes are being committed; you know how much the police are spending; you know where they are spending it; and you can break down local government spending to the last £500. That is freedom of information, but this endless discovery process that furs up the whole of Government-don’t worry, we are not making any proposals to change it.

Q439 Margaret Hodge: Can I just say to you, Prime Minister, that even if we took quasi-public bodies, such as LOCOG and Network Rail, both of which are private sector entities-actually, Network Rail has got a very odd constitution, which I accept that we created-you cannot actually get the sort of data that you have set out, to try and see whether the money going in has given you the results you have wanted in a value-for-money way. You cannot get it.

Mr Cameron: Fair enough, Margaret, but I would rather we went down the track of saying, "What are the data we need published?" rather than changing the Freedom of Information Act. I will go away and consider that point, but I think that publication of information is better than the discovery process, which I think furs up the arteries on occasions.

Q440 Chair: If you are not going down the road of your predecessor Tony Blair, you may be making an offer to come to the Justice Committee and explain your views on freedom of information.

Mr Cameron: Hopefully I skirted around that, so as to avoid that invitation.

Q441 Chair: What I hope is clear to you is that Select Committees, which are charged with the task of looking at these things, need the information that enables them to do their job.

Mr Cameron: I completely agree. I remember sitting on the Home Affairs Committee, and the most difficult session was when the Home Office annual report turned up, because you could not really get to what you wanted. I think that this greater use of private and voluntary sectors can add to accountability. If we go back to the Work programme, you can now see what these providers are doing with public money, how many people-

Q442 Margaret Hodge: You can’t get them to publish the information. The data are not out; we are desperate for them.

Mr Cameron: You started investigating the Work programme before the thing was already up and running. Next we will have the public expert who will start investigating a policy we have not yet thought of. That will be the next thing. When you go and visit these welfare-to-work providers you will see the real-time data. You can actually see what they are doing and where the money is going.

Chair: Prime Minister, thank you very much. We look forward to seeing you again on later occasions this year.

Mr Cameron: I am looking forward to it, too.

[1] Ev 91

[2] Ev 91

[3] Ev 91-92

Prepared 5th January 2013