Examination of Witnesses (Questions 440-442)|
THURSDAY 29 NOVEMBER 2001
440. So I am just trying to get to the point
of, what do you see as the role of the Treasury in the delivery
of public services; is there a role for the Treasury?
(Sir Steven Robson) There obviously is a role for
the Treasury, because the Treasury, in the end, is a conduit through
which all the money flows, and the money is what makes the public
services happen or not happen, in part, but not in whole; so there
is clearly a role for the Treasury in setting and monitoring budgets.
And there is a legitimate role for the Treasury as the guardian
of the taxpayers' interest, in trying to ensure that those budgets
secure value for money.
441. But is not one of the issues that the Treasury's
definition of what is public spending actually skews this whole
debate, and actually people find PFIs or PPPs, in fact, the whole
tube debate, is about trying to get round the definition of public
sector borrowing requirement, rather than a definition of whether
that particular service should or should not be managed?
(Sir Steven Robson) The test that is applied to PFIs
and PPPs is whether they are providing better value for money
than the public sector comparator. If they do not do that, they
do not get passed.
(Mr Dromey) Just very quickly on this. It may be my
Catholic education lets me down, but my understanding is that,
when Moses came down from the mountain, on the tablets of stone
were not Treasury Rules. They are the manufacture of man and minister,
and they should change, in particular, in terms of the powers
of the public sector to borrow and trade. That is crucial, both
in terms of a level playing-field, so that any partnership arrangements
are not shot-gun partnership arrangements driven by a public finance
imperative, on the one hand, but also in terms of the flowering
of public sector entrepreneurship, on the other hand. And, as
I have argued, much of that public sector entrepreneurship is
actually done then on a partnership basis with others.
442. The Victorian entrepreneurs who in the
public sector created most of our infrastructure now would not
be allowed to do it under the current rules, so you could not
create gas companies, you could not create electricity companies,
you could not create water companies, as the Victorians did. But,
I am just curious, how do you actually see the Treasury, and given
your experience in the Treasury, what is the Treasury's way of
operating; what should be the way that the Treasury operates,
should it be involved in the Public Service Agreements, or should
that be down to Departments and local authorities to decide their
own local budgets? Is that balanced and central, local, I am trying
to get that, given that the point you made fairly early on is
that we have not had very good management and you cannot control
a command economy?
(Sir Steven Robson) The trouble is that the public
sector we have at the moment is, in Jack's words, quite a Stalinist
creation. You have got, going back to one of your phrases, essentially,
monopoly organisations, and an attempt is made to drive those
monopoly organisations to be efficient and effective by setting
targets. Now, clearly, if the approach of having monopoly organisations
driven by targets was a successful one, the Soviet Union would
not have collapsed.
(Mr Baume) Two very quick points on that. Steve is
an expert on this, but I would suggest that the Treasury now is
more powerful than at almost any time in your 30 years in the
Treasury, and dominates all of this debate. Just a second point,
and I agree very much with Jack about spending rules, essentially,
our perception is that, within Government, if there is anything
that goes beyond the sort of three-year spending review then it
has to be delivered through a PPP or similar vehicle, which, of
course, sets costs potentially for 25 or 30 years. And I think
we are storing up a major problem down the track, as more and
more of the monies that are going to be allocated to areas are
already committed for long periods ahead through these long-term
contracts, which future Governments, of different political colours,
whatever, or changes within New Labour, or whatever, will find
extremely difficult to amend, change or repeal, even if public
needs and requirements have long since gone. Just as an anecdote,
I was talking to a corporate lawyer, very recently, who was saying
he was negotiating on behalf of the private sector contracts for
the disposal of hospital waste in 25 years' time; and it just
does not, in some ways, seem to make a great deal of sense, and
that is a problem that we seem to be storing up for future Governments.
(Mr Dromey) Perhaps you can invite us back, by the
way, on 29 November 2031, so we can review how things have gone.
Chairman: Make a note of that, yes. We have
had a fascinating morning. I feel that Stalin and Lenin have been
here in surrogates, we have been extraordinarily productive, and
we have broken up the Health Service, we have privatised the police,
we have turned the Government over to BP, we have had a terrific
time. Thank you very much indeed for a genuinely fascinating morning,
which we shall look forward to reading the transcript of and learning
from. Thank you all very much for your time.