Civil Service

Part of Prayers – in the House of Commons at 10:09 am on 28 October 1983.

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Photo of Dr Jeremy Bray Dr Jeremy Bray , Motherwell South 10:09, 28 October 1983

I am grateful to the Leader of the House for giving us the opportunity to debate the Civil Service and the three papers before us. I am glad to follow the right hon. Member for Taunton (Mr. du Cann) who was a distinguished Chairman of the Treasury and Civil Service Committee. He could always be relied upon to support the work conscientiously carried out in Sub-Committee when it came to be considered by the full Committee.

The hon. Member for Enfield, North (Mr. Eggar) was a member of the Sub-Committee and, I hope, will have an opportunity to speak later. He can bear out my claim that the Sub-Committee made a diligent and conscientious effort to study comprehensively the matters that we are debating this morning.

That brings me to the Government's response. When a Select Committee undertakes a major inquiry and produces substantial recommendations, the Government should accept its conclusions. We do not sit on Select Committees as neutered political animals—we are loyal members of our own parties. We carry out an objective examination of the facts and reach conclusions that we are all prepared to support. By the end of an inquiry we have spent more time, debated more thoroughly and listened to a wider range of opinion about a subject than Ministers could possibly hope to do. We might be considering a mainstream question of national policy such as monetary policy or international monetary arrangements, or an important administrative aspect of government such as effectiveness and efficiency in the Civil Service. Select Committees are entitled to assume that their recommendations will be considered.

The Government appeared to receive sympathetically the recommendations that supported initiatives that were already substantially under way within Government. But where the Select Committee made a significant departure from established lines of work within Government, the Government's attitude was quite negative. We must ask them to think again about their response.

The systematic programme of reviews to which the right hon. Member for Taunton referred was one of the three recommendations that were not accepted by the Government—the annual programme of departmental reviews and the publication of results; the right of Select Committees to commission the Comptroller and Auditor General to carry out reviews of efficiency and effectiveness of Government programmes; and the right of Select Committees to table substantive motions for debate and vote in Parliament.

The consequences of not accepting such recommendations are that the work of Select Committees will be downgraded and they will attract less attention and less effort from hon. Members. By the nature of Parliament, there is an abundance of hon. Members prepared to work in Select Committees. The Government's attitude will undermine the control and responsibility by Ministers of events with which their Departments are concerned. The longer-term tide of events is working against a Government who reject Select Committee recommendations.

We have taken steps on audit which will increasingly come into effect during the next few years. There are precedents—principally in the United States but also in other countries—for the wide range of activities of the General Accounting Office. It is absurd that nationalised industry chairmen should resent proper audit practices. The general pressure for more open government and more thorough examination will increase and will change the atmosphere. The financial management initiative is already under way within Government, and the Select Committee has given momentum to that.

I speak unashamedly as a member of the Opposition. I make no attempt to speak today as an impartial Chairman of the Sub-Committee. That is the way in which Select Committee members see themselves. They are every bit as loyal as Ministers to the policies of their parties. In making recommendations in Select Committees, hon. Members do not in any way take second place to Ministers in their interpretation of their political responsibilities to the country.

There are progress reports from a range of different Departments on the financial management initiative. They are not systematic, but are fairly wide ranging. As the right hon. Member for Taunton said, they are very much progress reports rather than completed achievements. They are plans and aspirations. One report from the Department of Trade and Industry is about efforts on programme expenditure. That matter has been of enormous concern for the 20 years that I have been in Parliament. It shows that this non-interventionist Government are spending £1·4 billion on intervention in industry. It states that several studies have been carried out. The department recognises the importance of the link between exante and expost evaluation and proposes that all new schemes should incorporate, where practicable, 'quantified objectives' against which performances may be compared. More generally, the department is carrying out a substantial exercise to introduce output measurement more widely across its existing support measures. Quite frankly, the Select Committee received more detailed information in evidence than it did on how actual reviews for support under sections 7 and 8 of the Industry Act are administered.

We would have expected by now a systematic publication of the results that we know exist in the Department. Despite parliamentary questions and constant probing, the Government never come clean. There is a plain attempt by Government to withhold politically sensitive evidence.

The Office of Population Censuses and Surveys has, perhaps, suffered more than any other statistical section of Government from the Rayner review. Its report contains the nice, tongue-in-cheek remark OPCS is seeking Treasury MPO support and advice on problems of output measurements. The output measurers are asking how one measures the output of output measurers. The Government, having mutilated the OPCS and the instrument that it should principally be using to examine and monitor the effectiveness of Government programmes, received that nice, tongue-in-cheek response from the office itself.

Yesterday we debated the Griffiths review of National Health Service provision. The report states: The overall effectiveness of the current management arrangements in the Hospital and Community Health Service is being reviewed by an independent enquiry, headed by Mr. Roy Griffiths, taking account of the initiatives already taken to improve performance and accountability. The Griffiths inquiry—although chaired by the managing director of Sainsburys—could equally well have been carried out by any of a dozen Under-Secretaries at the DHSS. It could well have been a routine product of proper organisation of government. If, during the past 20 years, there had been in operation the systematic programme of reviews that we recommended in our report, the Griffiths inquiry would never have been needed. The idea that it needed a man bearing the aura of Sainsburys to give it the necessary authority for Government to act is absurd. The Government, in the ways they do not give their own Civil Service the chance properly to exercise management and review functions and report to Parliament, are gravely weakening its effectiveness.

A further consequence of the Civil Service having a proper programme of reviews is that it would carry out the function much more sensitively than an independent inquiry. Of course, the tradition of civil servants working to Ministers is right in maintaining acutely sensitive political antennae but that is not incompatible with the proper exercise of management functions, and if the management functions ignore the political sensitivities they will be frustrated and not be implemented.

In a debate such as this we cannot go through all Departments and pick out all the particular points. We must deal with the general questions which are the subject of the earlier part of the Command Paper "Financial Management in Government Departments". I shall pick out three matters on which to comment. First, the report remarks: Financial management … is the essential link between the Government's overall economic policy and the day-to-day pursuit of efficiency and effectiveness in government departments and other public sector bodies. The right hon. Member for Taunton correctly emphasised the greater importance of effectiveness over efficiency in assessing progress. But if we are looking on financial management as a link between the Government's overall economic policy and the day-to-day pursuit of effectiveness and efficiency, we must inevitably consider the effectiveness of economic policy. If that is questionable, the link between an ineffective economic policy and an ineffective management of public expenditure will not be impressive.

We pose a problem for the Civil Service. If a Government's economic policy has fallen to bits, gone adrift or is wandering in the wilderness, the management of public expenditure is a one-legged beastie. One cannot solve a problem such as the future of the steel industry without considering wider economic questions. One cannot correctly formulate the amount of national income that should go to the National Health Service without seeing what are the trends in that national income. One cannot consider a programme such as the youth training scheme without seeing what are the demands for employment in the economy as a whole. We shall have in this Parliament—and I hope in the Select Committees, although I shall not be a member of one myself—an argument about this wider pursuit of the linkages through to the mainstream policies of the Government in the economy.

Secondly, there is a plea on page 16 of the report, "Financial Management in Government Departments" for the closest possible relationship between both the public expenditure White Paper and the Estimates and the information system which Departments are developing for the management both of programmes and of their own activities and costs. It is certainly true that the White Paper, the Estimates and the management information system fulfil three different roles but if they do not tell the same story, if they are not functionally related, none of the systems can operate properly. We raised one question in the Defence Estimates as an illustration. The financing of ships is just one single number in the Estimates yet in the White Paper on defence vast programmes such as Trident appear as one element. Ships and weapons and so on are spread across the Estimates but are nowhere identified in the Estimates.

A third wing of this information flow is the management information system within the Ministry of Defence itself. The reconciliation of those three and the operational linkage calls for a substantial revision in the Estimates. We shall be feeling our way in this Parliament on how we conduct the new procedures but I hope that the House and the Select Committees will use their new powers to consider the Estimates and use them in such as a way as to force the Estimates into a role that makes the decisions of Parliament operational in respect of particular programmes.

The third general illustration is overall manpower in the Civil Service. The drive to see the reduction of Civil Service manpower as an end in itself, irrespective of what is the overall job of the Civil Service, is entirely mistaken. The report, "Financial Management in Government Departments" says on page 13: Since staff costs are by far the largest element in administrative costs it is desirable to include them in each budget, but necessary to do so in a way which maintains"— here there is an unfortunate Freudian slip taunt control over the size of the Civil Service. That is exactly what the Government are doing. They are exercising taunt control over the size of the Civil Service. The Government regard the Civil Service as parasitic, as blood-sucking on the main wealth-producing resources of society. It is because that attitude comes out over and over again from statements of the Prime Minister herself that we find the Government completely unable to restore morale or to provide the leadership on which the Civil Service depends.

We see the practical consequences of this coming through in the technical detail of this financial management paper. In our report we tried to spell out the dynamics of control—planning, management and review of programmes and how these are related to each other. In the White Paper on the financial management initiative the sense of dynamics of control and the relationships of the several parts is lost completely in the detail and so we have confusions about output measurement, effectiveness, and so on, leading to no clear message.

The reason for this lack of sense of the dynamics of control is not due to a lack of ability of the Civil Service, not a lack of individual civil servants' understanding of the problem, but because the political direction and purpose is missing. There should be objectives. When one looks closely at what the Government are doing and saying, one finds no objectives, just slogans. What does the Civil Service do in this position? It is engaged in a major development of the mechanics of financial management where that financial management system is having to function in a total political mess. What is the Civil Service to do? Should it fudge so that the damage does not become excessive? I hope that it will not, that it will proceed with the improvement of the mechanics but that it will look beyond these shores and beyond the party of government to see what the proper use of those mechanics is.

I hope that it will look closely at those links with economic policy, that it will begin to revitalise the ideas of economic planning. We need more information than just money and price. We need to consider output and real resources and to consider positive achievements in the management of programmes.

Secondly, I ask the Civil Service to take seriously the devolution of decision-making. At a time when the Government are bringing into the centre powers over local government, powers over enterprise and powers over nationalised industries and are restricting initiatives within the public sector, it is important that the Civil Service should seek within its planning system to create the possibilities of efficient devolution of responsibility so that it may be exercised under a different Government. Finally, where there are functions that must stay in the centre, it is necessary that those functions should be exercised openly within open government. The central issues in economic policy debates and their bearing upon financial management within the public sector must be seen as part of an open government approach.

The Civil Service has a vital task. The service is not parasitic for it is part of the essential structure of society. I hope that it will continue in a state in which it is able to serve, in its proper role, a Government who need the full capabilities that it is able to offer.