Examination of Witnesses (Questions 400-419)
LORD MACDONALD OF TRADESTON AND MR DOUGLAS ALEXANDER MP
THURSDAY 18 JULY 2002
400. The key Prime Ministerial ones, the ones that he says he wants to keep his eye on all the time, amongst all this,
(Lord Macdonald of Tradeston) No, they can be public, Chairman. The implication of what I said earlier was that they should be public.
401. No, no. That is fine.
(Lord Macdonald of Tradeston) Thousands of public servants should know what they are and be able to respond to them.
402. Just to be clear on the setting side, it is interesting to know too exactly where these targets come from. Is it the case that the Treasury simply comes up with suggested targets for departments, tries them on departments, departments say, "Oh well, we do not like the look of those", and negotiations happen, or do departments come up with a raft of targets to the Treasury? How does it work?
(Lord Macdonald of Tradeston) We have the public spending process, the PSX, which is the Cabinet Committee, and through the work of the Treasury spending teams who work closely with their counterparts in the departments to see whether resources are adequate and whether there is value for money. As I say, on any particular areas where the expertise of the central units might be useful our people could well be called in, but normally it is a process that is very much between the Treasury spending teams and the departments and that is going on constantly across a very wide area and it is monitored by that PSX process.
403. But in a nutshell are these Treasury targets or are they jointly owned targets?
(Lord Macdonald of Tradeston) They are jointly owned. Each department has clearly signed up to those targets and we have had obviously a Spending Review process and you have heard the Secretaries of State begin to develop in more detail how they will take those targets forward just in the past week.
Mr Liddell-Grainger: These targets are fascinating, are they not? Can I ask about Lord Birt? I am stuck on this. It follows on naturally. It is a target, you see.
Chairman: An easy target.
404. I still do not understand the relationship to Lord Birt. Last week in here we had the Civil Service, the three Delivery Units. I did not get to the bottom of what actually Lord Birt did. He seemed to be an omnipresence around the fringes of this, passing information up, but again trying to hit targets. Is he a target-led person? Is he an adviser?
(Lord Macdonald of Tradeston) No. I would like to pass this over to Douglas but let me just say that I have actually worked with John Birt in the past. I have got a very high regard for him. He has got a very fine analytical mind. I have seen the work that he has done for the Prime Minister and he is an adviser to the Prime Minister. He is working alongside the Strategy Unit but working part-time and working unpaid. The ability of John Birt to be able to analyse and isolate trends or ideas is in my experience quite singular and he is a very useful addition to the excellent work that we get from our officials and from other sources. As I say, Douglas is now responsible for the Strategy Unit and John Birt works in that framework.
405. Can you just answer the other question? To whom is he accountable? Is he accountable to you, the Prime Minister, the Head of the Civil Service?
(Mr Alexander) John Birt is an unpaid strategy adviser to the Prime Minister. I have in preparation for giving evidence before this Committee looked back to Hansard of 25 March where the Prime Minister named the unpaid strategy advisers of whom John Birt is now one. Previously he worked alongside the Forward Strategy Unit. Now, in terms of changes which have been introduced following the appointment of Sir Andrew Turnbull to his position as Cabinet Secretary, his work was previously in the Strategy Unit and what was previously the Forward Performance Innovation Unit but has now merged into the Strategy Unit. That work was already commissioned but in fact there was a complementarity in the work that was being taken forward, and ultimately his position has been very distinctive from some of the discussions we have been having in terms of work with the PSA and so on.
406. What is he doing at the moment?
(Mr Alexander) He is providing strategy advice to the Prime Minister.
407. No: what is he doing? Is he on hospitals, cups of coffee? What is he strategising on? What does he do?
(Mr Alexander) It is a matter of record that he has been undertaking work, for example, on transport policy, and in another Select Committee there is clearly a great deal of interest in that particular piece of work. I would feel it to be perfectly reasonable for a Prime Minister to be able to draw on a wide range of sources for advice.
408. I do not have any problems with that. The Prime Minister can ask anybody he wants or she wants or whoever else wants for advice, but what intrigues me is the accountability of unpaid people within Government who are advising, suggesting, strategising. There are already four Delivery Units with all this back-up from the Civil Service and Ministers and all the rest of it; yet we have still got people on the fringes who are creating a strategy on transport policy. To me this is just another strand of somebody in the New Centre who does not seem to have a set policy or a set brief. It is transport this week. What is it next week? Is it cleaning the outside of Parliament?
(Mr Alexander) It is a matter of record that Lord Birt has already worked on the issue of crime and the issue of transport, but there is little I can usefully add to the points the Prime Minister himself has made in relation to the unpaid strategy advice being offered by Lord Birt, which, as I say, I think reflects a general principle which is that it is a matter of long-standing recognition that Prime Ministers are able to draw on the advice of a range of different people and there are arrangements in place in terms of the establishment of the Strategy Unit which, rather than leading to more complexity, actually surfaces the reality, which is that there are a range of issues which I think it is perfectly reasonable for the Prime Minister to commission work on but which sometimes do not sit comfortably within departmental briefs but none the less would be issues that he would be keen to seek advice on and is able to receive advice on. Frankly, one of the challenges of Government is to be able to sustain informed, intelligent policy-making advice across a range of areas and, while the Civil Service is providing an outstanding service in one regard, there is also scope for the kind of work that is being taken forward by the Strategy Unit. I do not see there being any inconsistency between that general role and the particular work that has been commissioned from Lord Birt by the Prime Minister.
409. I am unclear in my own mind about whether Lord Birt is a kind of lone figure, an outrider, or whether he works very closely with Ministers and civil servants. Lord Macdonald of Tradeston, you have a huge range of responsibilities but you also speak in the Lords on transport matters. You must have had many meetings with Lord Birt when he was thinking about transport policy.
(Lord Macdonald of Tradeston) No, I did not. At that time I did not speak on transport matters in the Lords. It is only since the re-shuffle that I have had to do that. When I ceased being Minister for Transport after the election I was not involved. I have seen John Birt's work. I have talked to him on a couple of occasions. This stream of ideas or analysis that the Prime Minister wishes to commission from John Birt or from other sources all simply goes in to inform a broader view of the issues. We in the end work closely with the officials in the department. Now as a spokesperson for transport in the Lords I will of course work with officials in the Transport Department, but they would set the priorities with their Ministers that I would follow. I would not be going to John Birt looking for advice on how I would address any particular issue.
410. I understand that. What I am trying to get at is the relationship that John Birt had with the organs of Government, if I can put it that way. We had the three central unit heads here last week and they told us that people who offer advice to Government could only do so effectively if they interacted with the relevant Government departments, so what interaction, if I can put it that way, was there between Lord Birt and the Department for Transport when he was preparing his report on transport strategy?
(Lord Macdonald of Tradeston) As I say, I was not a Minister in that department at the time but I would imagine that he would, working with the Secretary of State, have had access to the officials who might be able to provide the information or expertise or argument that he needed to try and come to his conclusions.
411. I do not want to press this point unduly, but there was no discussion with the heads of the central units about these proposals that John Birt was working up.
(Lord Macdonald of Tradeston) There would have been discussions clearly with Geoff Mulgan as the head at that time of the PIU.
(Mr Alexander) Geoff also made it very clear, if I recollect the evidence accurately, that, as he himself said, in his own capacity he advises and Ministers decide, and it was quite clear that that was where responsibility lay. I think that we can over-complicate a general view which says that if you have a view of politics and governance, as I do, that it should be rooted in values but driven by ideas, then I am not hostile to the idea that senior politicians should be able to have access to ideas because in many ways they fuel the policy making process.
412. No, but here is this guy, Lord Birt, who has got no background in transport matters at all, who has not spoken on transport issues in the House of Lords since the general election, has nothing to do with the Department for Transport at all so far as I can gather, comes forward with proposals to introduce motorway tolls and it is quite legitimate for people to say, "How much credence is going to be given to this report and how did he come up with these ideas anyway?"
(Mr Alexander) Of course the Prime Minister is on record as answering observations similar to the ones you have just made by asserting his right as Prime Minister to have access to people because of the distinctiveness of the judgement they bring to bear on a range of different subjects. That is reflected in the fact that not only on transport but also on crime the Prime Minister is keen to have Lord Birt advising him.
413. Okay, but the great danger with Lord Birt is that it is seen as cronyism, is it not?
(Mr Alexander) As I say, I take a different view of politics which is not views in and views out, but that actually underneath the politics does rely ultimately on translation of ideas and policies into outcomes and therefore to sustain the intellectual capital of Government by drawing on a range of different sources, be that the Strategy Unit, be that an unpaid strategy adviser, be that the expertise of the Civil Service, is actually a very constructive and progressive way to take forward policy making.
414. Just before we leave that, during some of our previous reports we have been looking at the fact that the Civil Service was considered to be a gifted amateur and that whole process has moved with the greater professionalism of the Civil Service, Civil Service training, all those issues. Is not the introduction of somebody like Lord Birt, an individual coming in as a gifted amateur, a throwback to those days?
(Lord Macdonald of Tradeston) John Birt is a very experienced business person. He was involved in commercial business over many years and then he was involved in running a huge public corporation. I think that some of the strengths that this corporation is displaying today is down to the kind of analysis and actions that John Birt took when he was in charge of the BBC. I do not think it is right to try and diminish what John Birt has done or what he can contribute. It is true that in business, as in every other walk of life, we have had to live with pretty dramatic change over the past few decades and the Civil Service too is wrestling with the kinds of problems that every organisation faces now: how to get on top of the challenges of IT, how to deal with the management of major projects, how to properly motivate its staff, how to recruit and train. How to get better leadership, which is coming through as a characteristic that is essential in the achievement of many of our aims. With respect, John Birt is part of the more general thrust that Douglas has described, but he does bring a lot of technical expertise to Government, albeit for a very short time each week, unpaid.
(Mr Alexander) I also think that there are the individual qualities of collective politicians. There has never been a metric which says that experience prior to entering public life is necessarily a guide to excellence within public life. It was said about Ian Spedding in the Foreign Office that he was equipped to do two jobs, either to be a rather grumpy lift attendant in the Foreign Office or perhaps the most brilliant Foreign Secretary we have had in the last century. In that sense I think the idea that because someone does not have a background in health they are not equipped to be somebody who can give strategic advice on that or on other roles.
Mr Prentice: I am going to be a brain surgeon.
415. We do not want to get stuck on Lord Birt. I do not know the man. I presume the Prime Minister would not call on his services unless he felt he had something to offer and I very much take the point about wanting advice from all kinds of sources, and if people have broad ideas and skills they should be able to be brought in. I accept all that, but the point we are getting is that the capacity for confusion here is considerable. Here we are with a PSA systemI am looking at the transport page of the Spending Reviewwhich gives as its objectives its targets for the period ahead, so it is locked in to all those. It has got its 10-Year Plan which gives the long term projection. Government has now its Strategy Unit to do broad strategic thinking, and on top of all that we get these free range strategists who appear. Accepting all that has been said, there is a possibility of some confusion coming in here.
(Lord Macdonald of Tradeston) Chairman, I would say that in any organisation which is in the process of spending £500 billion a year and spreading that across five million people, you would need a degree of complexity at the centre. What might strike you, coming in from outside, is that so few units are involved and are in some senses so thinly staffed, as we have here for the British Government. As I think the Prime Minister intimated when he saw you, if his support gets any bigger at the centre of British Government it might soon rival that of the Irish Taoiseach.
Chairman: That is a good point with which we all agree, but complexity is not the same as confusion. Let us move on.
416. When the Modernising Government White Paper came out, everybody said, "Yes, very good". Have you been back to look at how we progressed against the objectives set out in the Modernising Government White Paper? Also, one of the key things it identified was the departmentalisation of silos and the need for cross-departmental working. In the PSA process it is still very much a departmental focus, so how are you dealing with the cross-departmental issues?
(Mr Alexander) Part of the mandate or the letter that I understand was sent by Sir Andrew Turnbull spoke about the fact that there was an enthusiasm to secure a Civil Service, which is respected just as much for its delivery skills as its policy advice. I think, again for the reasons that Gus suggested, that means not just in terms of the amount of money being spent, where of course there are challenges, but also whether the machinery of government is able to take that work forward. I think at times you can take the analogy too far. I know the comparison is a subject of some concern to the Committee between private sector management structures and the structures appropriate for governments in the United Kingdom. I would like to reflect for a moment on the kind of structures that would be in place in any large organisation: there will probably be a capacity for trying to think ahead in terms of some of the major strategic challenges the organisation would face. There would certainly be a means by which in terms of some of the targets within the business we would actually be able to say they are a basic means and an effective means by which they could keep track of whether those targets were met was in place. In all likelihood there would be access to external sources of advice beyond the individual organisation itself and at the same time there would be a means by which clarity was given in terms of the strategic direction and accountability, in this case for ministers. In that sense of course there is a process which Sir Andrew Turnbull is taking forward allied to work being taken forward in the Civil Service reform. I think one should not assume because it is a large organisation that complexity is inevitable, in fact it may be a function of the scale of the objectives. We have now returned to one of the observations which I have held most deeply in recent weeks since moving into the Cabinet Office, which is if you are serious, as I am, in terms of recognising the immense political challenge that the government has set for itself in terms of rehabilitating and rebuilding public services in this country then actually we have an obligation not just to make speeches but to translate those speeches by the poetry of campaigns into the prose of government. We have to be in the boiler room, in the engine room making that change happen. That is why the work of the Secretaries of State and the departments are so key, because actually as a government we made clear it is the mandate we received, but it is also a genuinely historic cause, and one which I relish.
417. Professor Stewart used to refer to the "wicked issues", do you see the Cabinet Office having a role in dealing with "wicked issues"?
(Mr Alexander) Give me some examples?
418. Issues that do not fit into anyone's box. Looking at issues, like how people relate to the public services, they do not relate to the Department of Social Security, they do not relate to the Home Office, do they, they relate to whatever the particular issue is at the time.
(Mr Alexander) Of course there has been the historic role for the Cabinet Office of holding functions which naturally sit at the centre and frankly do not naturally sit else where within Whitehall. That is why, despite the fact that it draws some scepticism from certain members of this committee, we do recognise that one of its responsibilities is to support the Prime Minister. Of course there are other functions which we discharge in the Cabinet Office, not least, for example, the intelligence and security matters Gus mentioned at the outset. In that sense there are central functions of government which continue to be held at the centre. On the specific point you make, I have been looking at what is in the jargon described as customer satisfaction. One of the things I look forward to engaging in in the months to come is exactly the kind of question you have identified, how do we try and cut through some of the policy language and some of the ideals that we have set for ourselves and actually make sure that the development of policy within those public services are genuinely customer focused? It is essential that we understand the customers experience of those public services if we are to deliver our promises.
419. You are unique, you had the e-envoy report to you in the DTI and now you have him in the Cabinet Office, can you explain the differing roles he has in what he reports in the Cabinet Office and what he reports to the DTI?
(Mr Alexander) There has been some kind of change post the reshuffle in the sense that previously the position was that Gus had ministerial oversight within the Cabinet Office for certain e-government responsibilities while at the same time I had parallel responsibilities in terms of commerce within the Department of Trade and Industry. One of the main areas of concerns we were developing in cooperation and working closely with the e-envoy was the agenda of broadband Britain, of which I know you are an expert and you know a great deal about. In terms of change post reshuffle I think there has been a recognition, an acceptance that the appropriate location for that work is the DTI. In terms of the best guide to the work that the e-envoy will now be taking forward I return to the mandate set by Sir Andrew Turnbull and the Prime Minister when he spoke about transformation, and that is one of the major challenges that we see. I know that questions were asked of the Prime Minister before the Liaison Committee in terms of the work of the e-envoy, while there is a clear target for getting government services on-line that does not capture either the scale of the Prime Minister's ambition or, indeed, the work of the e-envoy's office. As e-commerce minister I made a lot of speeches last year asserting the importance of information and communications technology, not just in terms of utility within a business but actually the capacity of that investment to transform the way those organisations do business. I think there is a lot we can draw on within the public sector or the public domain based on exactly that insight. That is why I certainly welcome the change to this, the explicit transformation, which is actually the business community being taken forward by the e-envoy over this. That is, as we see, a text book example of where resources at the centre can actually stand in and service and support the work of ministers and the departments. Actually, it is asking a lot of ministers as well as taking forward policies within individual departments to be able to take forward what is certainly a very challenging agenda in terms of the transformation of public services using new technology. In that sense I think it is a very good example of the e-envoy's office and in particular e-transformation, Andrew Turnbull's vision of the Cabinet Office.
2 Witness Correction: Ernest Bevin. Back