CORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 983-iv
House of COMMONS
MINUTES OF EVIDENCE
TAKEN BEFORE
public administration committee
Wednesday 26 November 2008
MS ANN ABRAHAM, MR STEVE BUNDRED and MR TIM BURR
Evidence heard in Public Questions 168 - 237
USE OF THE TRANSCRIPT
|
1. |
This is a corrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee, and copies have been made available by the Vote Office for the use of Members and others.
|
|
2. |
The transcript is an approved formal record of these proceedings. It will be printed in due course. |
Oral Evidence
Taken before the Public Administration Committee
on Wednesday 26 November 2008
Members present
Dr Tony Wright, in the Chair
David Heyes
Kelvin Hopkins
Julie Morgan
Mr Gordon Prentice
Paul Rowen
Mr Charles Walker
________________
Examination of Witnesses
Witnesses: Ms Ann Abraham, Parliamentary and Health Service Ombudsman, Mr Steve Bundred, Chief Executive, Audit Commission, and Mr Tim Burr, Comptroller & Auditor General, gave evidence.
Q168 Chairman: Good morning. I am delighted to welcome this morning, Ann Abraham, the Ombudsman, Steve Bundred, Chief Executive of the Audit Commission, and Tim Burr, Comptroller & Auditor General. As you know, we are doing this inquiry, which we have rather grandly called Good Government, trying to work out some of the underlying principles involved in what makes government good or bad. In doing that, we obviously turn to bodies like your own whose job it is to examine the ingredients of good and, indeed, bad government on a continuing basis. We thought it would be quite a challenge to get you to try to think through what you think are some of the general lessons that emerge from all this work and all of these reports that you do. You have been excellent in producing these documents for us, and I hope you have found them useful in getting you to reflect upon your own activities. We have certainly found it useful in looking at them. That is what we shall be exploring with you for the next hour or so. I do not know if any of you would like to say something by way of introduction?
Mr Bundred: I would like to say just one thing. Although the Audit Commission memorandum quite naturally focuses on areas where government could have done or could do better, there are a lot of positive developments taking place within government at the present time which I hope this Committee will recognise and applaud. I would include among them, for example, the growing professionalism of the finance function, the greater willingness of the Civil Service to open itself to external influence, and the improving and changing relationship between local and central government which is evidenced, for example, by the new local area agreements. There is a lot that is working well. I would not like that to be ignored when trying to focus on the things that could be better.
Q169 Chairman: I will start with you, Ann, if you do not mind - as I so often do. Your note raises the relationship between good administration and good government. It seems to be saying: Do not forget how integral good administration is to any notion of what good government is. Do you think we do forget that?
Ms Abraham: I suppose it is a back to basics question in a way really. I have to say I was hoping you were not going to start with me, because I thought these guys had rather more to contribute than me in terms of their overview, but I think what I am saying and what Principles of Good Administration are saying, our published documents of how we see the world, and how we would like to influence improvement in it, is that actually if you get the administration working well and you get the basics of good recordkeeping, good design, good planning, good communication, proper customer focus, if you get those things right, then actually a huge amount will flow from that. If you get your complaint handling working well, so your feedback mechanisms are working well and you have that driving continuous improvement, then that will take you a fair way along the road to good government. I think that is what I am saying.
Q170 Chairman: I think you are also saying that people's contact with the state is very much experienced through their experience of the quality of administration they receive, so it is not a tangential thing, but is integral to people's wider relationship with the state.
Ms Abraham: Absolutely so. One of the documents I sent you was a copy of the speech I gave at the Constitution Unit earlier this year, Good Administration: why we need it more than ever. That made those connections with democratic engagement, democratic deficit. One of the things that I find most difficult to deal with is if a complainant says to me, "It's not worth complaining. Nothing ever changes, nobody ever listens. I'm not going to engage with the system, with this complaints handling process. It's not worth it." It seems to me that is the citizen turning their face away from the idea that they have any self-worth really and that they are worth listening to.
Q171 Chairman: Let me then turn to our auditors. The reports you have given us are excellent and helpful in all kinds of ways, but can we first of all establish what you do not talk about, what you see is off limits to you in an inquiry into what good government might be?
Mr Burr: There is of course the restriction - which is a statutory restriction - on commenting on the merits of policy objectives that applies to me, certainly. That does not mean to say, as our memorandum brings out, that there may not be something we can offer in terms of policy design. In a way it links with the issue of government and administration which you were just asking about. There are different reasons why one might question a policy. Whether one disagrees with its objectives, is not for me at all. But, of course, if it does not work or the implementation proves very challenging and not very cost-effective and so on, that might be a different sort of reason for asking whether the design - another issue that I raise in my note - is as good as it might be.
Q172 Chairman: Just so that we get a sense of what the "No go" areas here are and therefore which field you are addressing, I suppose I am prompted partly by the article which your predecessor John Bourn wrote in The Financial Times, a very robust article based on his experience of being the Comptroller & Auditor General, Whitehall urgently needs to reform its culture. It goes into some rather big points about how we do government in this country. Those sorts of big points, I do not see reflected in the report which you have done for us. Is that because it is off limits?
Mr Burr: No, it is not off limits. In the note that I have provided, I have not tried to ask "Why is it all so bad?" or something like that, but rather to base myself on the work that we have done, which, as the note brings out, does reveal that there are things that are not very good and could be improved, but does also bring out examples of things which have been done rather sensibly and rather well. That makes me a bit reluctant to generalise. It is not that I do not feel able to comment on the big picture, but that I think it is more complex than that the bureaucracy is dysfunctional or something of that sort, because it depends what you are talking about and it needs to be relative too, in terms of the different challenges and complexities faced in particular policy areas. Certainly we have been very critical of the Child Support Agency, for example, in successive reports we have produced. Having said that, I do recognise that it was always going to be difficult to bring that initiative off.
Q173 Chairman: There are some very, very useful examples that you give. I am just trying to establish the terrain that we are talking about here. Obviously we have had a range of witnesses who have come and told us what they think is wrong with government. For example, they might tell us that governments legislate too much, there are defects in the legislative process, there are problems in the relationship between politicians and ministers. There are all kinds of things that bear on the nature of government in this country, but all that stuff is not really stuff you can take a view on, is it?
Mr Burr: No, it is not, but, as I say, there may be issues about design rather than objectives and there may be issues around implementability and those sorts of things.
Mr Bundred: Like Tim, we are constrained from commenting on the merits of government policy, but we do have a duty to report on the implementation of government policy within the areas covered by our remit. We are also constrained from moving into areas which are the remit of other bodies. Often, of course, the issues that we are looking at cover the local and the national and they may cover areas which are the responsibilities of, for example, other inspectorates, but in order to address such issues and ensure that they are not overlooked, we do very regularly conduct joint reports with the National Audit Office, with the Healthcare Commission, with Ofsted, and with the Commission for Social Care and Inspection. We are able to overcome that problem, therefore. In relation to the bodies within our remit, we have different powers in relation to local government and health, but in relation to local government, we do very regularly look at the way local government is managed, at the relationships between members and officers in local government, and at the role of political leadership. Indeed, only this year we published a report looking at the way in which chief executives of local authorities are recruited and remunerated.
Q174 Chairman: I suppose the core business, certainly originally, of your organisations was financial. It was financial audit. You have expanded from that core.
Mr Bundred: The Commission was created in 1983. From the very beginning it had a duty to undertake national studies designed to promote economy, efficiency, and effectiveness in the delivery of public services, and to look at the implementation of policies or ministerial directions. That studies function has been there from the very beginning, therefore. The way in which the Commission's remit has changed over the years is that in the late 1990s we were given responsibility for inspecting the quality of services provided by local government.
Mr Burr: Of course it has evolved in our case, because we go back further. I look at it like this: from the start there has been concern, as there is with all public auditors, on whether the funds authorised have been applied to the purposes for which they were authorised. That very naturally leads to a second question. Parliament authorised these funds, but it authorised them on the basis of a prospectus, in terms of what would be achieved, so was the prospectus delivered? And that is value for money.
Q175 Chairman: I ask this partly because in a previous inquiry the former Cabinet Secretary Lord Butler raised with us what he believed was a useful innovation. He said that we should think about setting up a National Performance Office to match the National Audit Office: "a body whose explicit remit was the quality of administrative performance inside government" so that it is not just something that is sort of tacked on to the work of bodies which are doing something else. I wondered how you responded to that.
Mr Burr: We did respond to it. Our view was that there was nothing obvious here which could not come within our remit as the National Audit Office. Indeed, if you look at our memorandum which draws upon numerous reports that we have produced - and we produce about 60 in the course of the year over and above other work that we do with departments - there is enormous scope there for acting as a stimulus to improving the quality of administration. It is not for us to say, but we would like to think that is a function that we can, and to a certain extent increasingly do, discharge.
Q176 Chairman: Would it not be sensible to put your two audit bodies together and beef you up into something that does the whole shooting match?
Mr Burr: Steve and I have talked about that in the past, of course. It does encounter some difficulties, in the sense that I am an Officer of the House of Commons and my job is to report to the House of Commons on the accounting for the monies which Parliament has voted as supply and to look at the value which has been achieved for those monies, and the people who appear before the Committee of Public Accounts are accounting officers who are formally accountable to Parliament. If we were to have a joint body, of course, there would then be questions as to the extent to which an officer of the House of Commons could appropriately call to account directly servants of local democracies in the local authorities who have a different accountability. I will not enlarge on that but Steve will be able to. There are also some other difficulties around the question of where the responsibility for appointing such a body would lie, because of course members of the Audit Commission are appointed by government whereas there is a procedure for appointing the Comptroller & Auditor General which is designed to guarantee independence from government. I am not saying that Steve is not independent of government, but there is that sort of safeguard and whether one could read that across to Steve's side of the work he had better say.
Mr Bundred: The only thing I would add to all of that is that although the practical and constitutional difficulties of bringing the audit agencies together into one have been overcome in other jurisdictions, I think they would be greater in England, where there are over 300 local authorities. There is no doubt if neither of our two organisations existed and you were starting with a blank sheet of paper you would not create exactly the present arrangements. But, while the present arrangements exist as they do, I think the obligation on both the Commission and the NAO is to ensure that we work in very close collaboration and absolute tandem with each other, and we do.
Q177 Chairman: I do not know whether it was in the NAO or the Audit Commission memorandum to us, but one of you said that citizens have no idea who provides what service any more. They do not know, they do not care, they just want a decent service. They are not detained by these nice distinctions, that you seem to think are obstacles to having an integrated audit operation.
Mr Burr: Yes, but they did vote for Members of Parliament and they did vote for local authority members, and so, ideally, one would want the public to have some idea of where the accountability and initiative in the provision of those services lie. I was not making any stronger distinction than that.
Q178 Chairman: Is it possible for you to say in any sort of general way, also taking account of comparative experience, the experience of other countries, what sorts of things we seem to do rather well, and what sorts of things we do not do so well. Is it possible from your work to say that?
Mr Burr: I have been reading the evidence you have already taken for this inquiry and I was rather struck by Peter Lilley's response to that question, which is that government does probity well; it does policy reasonably well; policy implementation could be better; and project management generally was not that good. I applied myself to thinking why that might be, because I think there is something in it frankly. I noticed about that spectrum that probity does not cost you any money - it does not cost you anything to be honest, in that sense. With policy formulation, limited resources are devoted obviously to that - high quality resource - but you are not betting the farm on it at that stage. With implementation, of course, you are engaging the resources, but if you are talking about ongoing programmes you do have some scope to learn as you go along. With projects, however, you generally have large resources and you have to get it right first time. I think that that perhaps says something about what is, in a sense, less and more challenging to government machinery. Having said that, I want to add one point, which is that one should never belittle probity. Probity is a major issue for governments around the world. I think we can be very thankful that in this country, that is not something which we cannot take for granted, but it is something on which we can usually rely.
Q179 Chairman: That is a really interesting answer. You commissioned this report from --
Mr Burr: PWC.
Q180 Chairman: Yes, as background to your submission to us. They find, studying certainly France and the United States, that "Experts in the United States and France highlighted UK performance monitoring and evaluation systems as examples of best practice." Is that something that you would point to as an area where we -----
Mr Burr: It is not a job done but it is certainly something which is receiving a degree and a quality of attention in government. One only has to think about public service agreement targets - which have evolved and which are now primarily cross-cutting targets, but there are also now departmental strategic objectives - and I am pleased to say that we have been able to work with government on that, particularly in the validation of the data systems which underlie that monitoring to which you refer. We have not yet moved as far as validating the data in the sense that we would audit an account, because that is something which we might do in the future but not yet, but we do look at the extent to which the methodology and the sources for the data are robust, and that has led to quite a good dialogue with government. In that respect, I think there are things you could point to in terms of a commitment to effective performance measurement and some willingness to submit that to external validation.
Q181 Chairman: Could I ask you, Steve, to respond to the good and bad question.
Mr Bundred: First of all, I would strongly endorse the points that Tim has made about probity and so on. The comment I would make is that we do many things well sometimes, but the thing we do not do well is to have a consistent approach right across government, so we see the same errors being repeated on occasions where the lessons from history have clearly not been well learned.
Q182 Chairman: That is something that the Ombudsman has said to us many times over the years too.
Ms Abraham: To come in on this good and bad point, I would start by saying that all my customers come to me because they are unhappy about what the Government has done to them, so there is not a lot of the good, but I was very taken with Tim's comments on probity, policy, policy implementation and project management. I do not disagree with any of that, but where I come in is that the day-to-day administration is the main interface with citizens, it is those transactions on which the citizen experience is based, and, therefore, if that policy implementation and its ongoing maintenance is the area where actually we are not doing too well, that is the bottom of this huge pyramid. That is one thing. I suppose I would say - it is certainly the experience of my Office over the years and I think endorsed by the NAO in recent studies they have done - that government does not do complaint handling well. If we can expand on that later, I would be happy to do so.
Q183 Mr Walker: We were just touching on targets. Do you think that good administration is reaching targets? There is a debate at the moment as to the merits of targets and whether they depersonalise the delivery of services to just simply box-ticking. I would be interested to have your thoughts on that.
Mr Burr: I have been saying to my staff that merely to say that a target has been achieved is not in itself evidence of value for money because there are questions about whether the target is itself appropriate and sufficiently demanding. I would say that targets can certainly help, departments and public bodies focus on the task to be done, but there needs to be integrity about the target-setting process, that it is intended to drive performance and not simply to give a ring of plausibility to what would have been achieved anyway.
Mr Bundred: I would say that well-chosen targets have an important role to play but they do have to be well-chosen and they do have to be owned by the organisation responsible for delivering them. I do not know of any well-run organisation that does not have its own targets and use those targets to drive its own performance, so undoubtedly targets can play an important role but they have their limitations too.
Q184 Mr Walker: Haringey Council reached its child protection target, but would you say that was a success, given the disaster that has just happened?
Mr Bundred: Obviously I cannot comment on what has happened recently in Haringey because I do not know enough about it, but undoubtedly targets have an important role to play. I think there would be few people who would deny that the performance of local government generally has improved significantly over the last decade, and targets have been one of the factors that have contributed to that, but they do have limitations.
Ms Abraham: My view is that there is a huge industry around targets which sometimes works well and sometimes serves us all very badly. This is really about performance and measures of success and key performance indicators which tell us whether we are achieving the things which we are supposed to be achieving. Perhaps I can give just one illustration. The outgoing system for complaints in the NHS has a target, indeed a legal requirement, of answering letters about complaints in 20 working days. That means that you get a lot of nonsensical letters which actually do nothing to respond to the problem and the issue under consideration but there is an absolute tick in the box which says, "We have answered a letter". Usually that means that local resolution is complete, box ticked, on we go to the next stage, unhappy complainant, problem not solved. They can work absolutely perversely or they can work very well. But they need some really developed thinking about: What it is we are trying to measure here? How will it tell us that we are succeeding in what we are trying to do?
Q185 Mr Walker: You get many complainants come to you complaining about organisations that may well have reached their targets but the complainants come in to you because they have not been treated with compassion or dignity, or common sense has not been applied to their case. I think there is a role to have a debate about targets and whether we attach too much importance to targets and whether there are other areas of importance being subsumed by the need to reach a target. Would you agree with that? I would be interested in what the panel think about that.
Ms Abraham: I absolutely agree. In the context of the NHS, I have argued for a long time, and in a special report on this some years ago now, about having a system which is focused on outcomes and not on process. That does not mean you do not have the processes, but if people just get into a bureaucratic process of complaint handling as moving paper from one place to another, you will not get the outcomes and you will not get the learning, and, therefore, I am sure that debate would be useful and I am happy to contribute to it.
Mr Bundred: I touched earlier on the new local area agreements as something which I think has been a very positive development. One of the reasons why it has been positive is because there are fewer targets within those local area agreements and there is a better balance within them between local and national priorities. I think that is important because, while targets can have a positive role to play if they help to provide focus, if there are too many of them they can simply create confusion.
Mr Burr: Along with that, of course, targets can only be selective. The concern was that some of the softer things, around the way things are done as well as what is done, are hard to target and probably it would be a mistake to try. They have their uses but they are not a substitute for a culture of good public administration.
Chairman: That is interesting. Our success in the Olympics was widely attributed to a very strong and robust target culture that drove the programme. Anyway, I just insert that as an observation.
Q186 Julie Morgan: I want to explore some more of the relationship between the centre and the delivery of local services. Do you think power is too concentrated in the centre?
Mr Bundred: There is another Committee of the House looking at the balance of power between local and central government at the present time. The CLG Select Committee is conducting an inquiry into that and we will wait with interest to see what they have to say. Fundamentally, while national government is providing through national taxation, the great majority of local expenditure, then inevitably national government is going to have a very powerful say in what local authorities do.
Q187 Julie Morgan: Do you think there could be more decentralisation?
Mr Bundred: As I said earlier, I have welcomed the shifting balance between local and central government that I have observed over the last decade or so, but local government is a creature of statute. It is for central government and Parliament to determine what its function should be; it is not for the Audit Commission to decide what the functions of local government should be.
Q188 Julie Morgan: In your memorandum you referred to examples where the working between the two layers was not good. Was that flooding and the Children's Trusts? Could you expand a bit more on that.
Mr Bundred: They are different examples but they are both quite interesting examples. In relation to flooding - and this was a report we published in December last year about the experience of those local authorities which had suffered severe flooding in the summer - this is an issue about consistency of approach by central government. Local authorities said to us that they very much welcomed the swift response of central government in providing additional money to cope with the consequences of that flooding, but there were four different funding streams, provided by three different government departments, with different criteria attached to each. The consequence of that was that in London, where there was no widespread flooding, two local authorities received compensation from government, but in Hull, which is the area that was most badly affected by the flooding, the local authority ended up having to meet most of the cost of the damage itself. There was a kind of lack of coherence and a lack of cohesion in the Government's approach to supporting local authorities that had been affected by the flooding.
Q189 Julie Morgan: Are you saying that in London two local authorities received money for flooding that had not occurred?
Mr Bundred: There had been very localised flooding, there had been no widespread flooding in London, and the damage that those authorities had suffered was very slight and could reasonably have been met from their own resources.
Q190 Julie Morgan: How can that sort of thing be remedied?
Mr Bundred: We made some specific suggestions in our report; for example, the operation of the Bellwin scheme which exists to support local authorities experiencing major emergencies which we know government is still giving some thought to. If I can turn on to the second point, your mention of Children's Trusts. Children's Trusts was a different example of ways in which we think government could have a better approach to policy design. The problem with Children's Trusts was that while the policy was extremely well-intentioned and designed to address a very serious problem, the difficulty was the over‑prescription on how things should be done rather than a focus on what should be achieved. Again there was inconsistent and sometimes confusing guidance given, not just between different bits of government but also over time.
Q191 Julie Morgan: Which still has not been sorted out, presumably.
Mr Bundred: Ministers have said in response to our report that they intend to issue fresh guidance very soon.
Q192 Julie Morgan: Do you have anything to add?
Mr Burr: As Steve says, it is for the Government to determine what the balance of responsibility between central and local government is, but I think it needs to be looked at from two aspects - what I might characterise as a micro and a macro - in the sense that, service by service and issue by issue there may well appear persuasive grounds for a stronger central government role or whatever, but I think there is a need to look at the relationship between central and local government as a whole. Because you presumably are going to have to have some vision of what sort of local government you want to have and then there will be issues about critical mass in terms of responsibilities, funding and so on, without which you might begin to compromise its effectiveness in some way. There is a big question about where the balance should lie - it is not a question for me, but there is a question anyway - as well as the series of individual questions about how a particular service is best organised. You could answer all those questions in what seemed to be a rational and satisfactory way and end up with a result in terms of overall balance which was not what you wanted, so I think it needs to be looked at from both ends.
Q193 Julie Morgan: Do you have any comments?
Ms Abraham: I was trying to reflect on whether there was anything I could say that was remotely evidence-based in this and there is very little indeed. I was just thinking about the extent to which my Office has looked jointly at complaints with the Local Government Ombudsman where there is read across. Health and social care is a huge area, but that does not go to this question. The very, very tiny number of complaints that we have where things have not worked well that have sat across those boundaries have tended to be in environmental or in transport, that sort of territory. I really do not think I have an evidence-base that would allow me to say anything much about anything on that really.
Q194 Chairman: Could I press you on the first of Julie's questions, which was about the centralisation issue, because again your consultant's report to the NAO, talking about international experience, says, "Good government is increasingly decentralised and closer to its citizens". I would like to know if this is true in evidential terms. I would think it is true that after devolution England is probably the most centralised country in Western Europe now. The question there is: Does centralisation of that order produce less than good government? Is that what the evidence seems to show? Do smaller units do better?
Mr Burr: As a generalisation, it is hard to argue with the idea that the more you know about the needs of the customers and the circumstances in which they are, the better the job you are likely to do. Of course that is not the same thing as saying that things should be done by local government rather than by central government. For example, the Department of Work and Pensions has to deliver benefits to individual people and individual families and needs to have a high degree of feel for the question whether conditions for benefit and the like are met and for local labour markets and those kinds of issues, but that can be discharged within the context of an appropriately managed central government department. I do not think that what we were saying in the memorandum is quite the same thing as saying that local government needs to be responsible for more things or something like that. As I say, my chief observation on that would be that you do need to consider whether you might by a perfectly rational process, on a service by service/issue by issue basis, chip away to the point where you were not really left with enough to be the kind of local administration that you wanted it to be. I am not saying it is so, but it seems to me that is a proper consideration of policy in these matters.
Q195 Chairman: Can you answer the question? Is government too centralised in England?
Mr Burr: I do not think I can answer it at that level, because that is really a political question as to where authority should lie. My role is rather to look at the service delivery, to look at delivery chains - which are increasingly complex - to see whether a good result and a good performance is achieved, and, as far as possible within that framework of policy that is set, to see how it might be improved, how communication might be better, how performance reporting and monitoring might be better and so on, rather than the challenge the framework itself.
Q196 Chairman: What I meant was "too centralised for good government". That is the proposition that these consultants are telling us and which other studies have seemed to indicate. I just wanted to know if this seemed to be supported by your experience of the evidence. What about you, Steve?
Mr Bundred: I have some sympathy for politicians on this issue because I do not think they get consistent messages from the public. On the one hand the public will express a desire for decision-making to be taken as close to the point of delivery as possible, whereas on the other hand they do talk the language of the postcode lottery and do get concerned if standards are not exactly the same everywhere. It is undoubtedly the case that government has become more centralised over recent years - over a long period of time, in fact - but there are factors in public opinion that have helped to drive that.
Q197 David Heyes: If I may say so, it is the public in that perception who are to blame for poor quality of government - if you take your argument to its extreme. If you were to ask a lay person, "What is the Government?" they would say, I guess, "Gordon Brown", "It is the Cabinet", "It is an array of ministers," and they might even say presently "It is the Labour Party that is government." We are looking at what is good governance, and for virtually all the witnesses we have had before us, including yourselves, the political dimension really does not feature as the determining factor in achieving good government, and clearly it is. You tend to shy away from that. Tim, you just declined to answer a question that you perceived to be a political question. I understand why you did that, and this point about being sympathetic to politicians because of the vagaries of public opinion. All these things impact on good government and yet yourselves and the other witnesses we have had, and maybe others as well, concentrate on looking down at the bureaucracy and the way it is structured, the way it works, the way it functions, often forgetting or almost being blind to the fact that we operate in a political dimension. Does good government require good politics? That is the question.
Mr Bundred: Certainly the experience of the Audit Commission in relation to local government is that the best local authorities are those that have strong political and managerial leadership and good relationships between the two.
Mr Burr: The reason why I have not commented - and perhaps we have not commented - on the problem with the role of the politicians is because that is somewhat outside my competence and the process which I serve. The Committee of Public Accounts does not take evidence from politicians or from ministers but it directs its inquiries to the accounting officers who run the administration of those departments. On your question, I hesitate to venture into what is good politics and what is bad politics, but I certainly think that there is such a thing as good policy-making and poor policy-making, as it were - not, as I said earlier, in terms of whether I may agree or disagree with its objectives and orientation but certainly, in the terms of my memorandum, in terms of policy design. I think that reads across directly into the question of the link between government and administration, because if the policy is not designed in a way which is likely to make sense for those it is intended to help or serve, then administration will struggle from the start.
Q198 David Heyes: Ann, do you have a view on this?
Ms Abraham: I was just trying to think what good politics would be really. I suppose if I think about this from the perspective of, to what extent can the political dimension interfere with or play against good administration. Some of the examples of that are maybe more behavioural/cultural than processy, but the things I observe - maybe some of my personal bug bears over the years of observing government in action - there are a number of things that go on where the political dimension kicks in and is a challenge to good administration. So I would say there is a huge focus on what I would call the front end: thinking things up but not thinking them through. Trying to do things in impossible time scales - to me the political imperative - which means that you do not get your planning and your testing in. There is a phrase I used in the report about NHS complaints: "slippage and scramble": there is no activity for a while - for quite a long while - and then there is this frantic activity. There is something about a view, when it comes to the focus on the front end, that getting a piece of legislation through Parliament equals implementation, when actually those of us who know a bit about delivery know that that absolutely is not the case. The other political dimension, which I think really mitigates against good government is what I would call defending the indefensible. Over the years, I have seen - as I am sure this Committee has - examples where civil servants are desperately trying to protect their minister. I call it keeping the lid on. It is very obvious that something has gone horribly wrong. The Debt of Honour report which I did and this Committee actually followed up on was a wonderful example of civil servants trying to keep the lid on something which was clearly going to explode. Somehow putting something else in, keeping the lid on, when actually what really needed to happen - which is what the minister did in the end - was to get it all out, put it on the table, sort it out and then deal with it. I think there is something about protecting the minister, keeping the lid on, which is cultural for civil servants - and quite rightly too, in many respects - but it can play actually against good government. I suppose those are my observations really about how the political dimension can get in the way of good administration.
Q199 David Heyes: Is it the case, though, that where there have been examples of serious implementation failures, things like tax credits, child support and even the farm payments, those are attributable to political failings, the kind of failings that Ann has described: short-termism, overambitious commitments, and being unrealistic about what could be achieved? Is that what is to blame for those things that we would all accept are examples of government failure?
Mr Burr: To take tax credits, I would not go so far as to say that it was in some sense wrong to seek to redistribute income to what would otherwise be benefit recipients through the tax system. I would say that it was always going to be challenging because you have to marry the weekly payment culture of the benefit system with the annual assessment culture of the tax system. Therefore, for officials responsible for advising on the implementation of such a scheme there was a great deal of careful design work that was going to be needed. One wonders whether some of the decisions that were taken later in response to the problems that emerged, such as the increase in the disregard for rises in income during the year, should perhaps have been features from the outset. That would have reduced one of the most difficult aspects, which was of tax credit recipients finding themselves with larger amounts than they were supposed to have received which they were then expected to pay back.
Q200 David Heyes: Was that the fault of the bureaucrats who did not recognise that they needed to establish the systems to cope with that or was it the fault of the politics for just designing the policy wrongly in the first place? What is the balance between those two?
Mr Burr: I would not necessarily want to apportion blame there, but I would say that if it became apparent in due course that you could not operate it in the way it was originally designed and you had to modify it in that major way, was it just the case that you had to learn from experience or could it not have been foreseen that these were people who, given their financial situation and circumstances, you did not want to put in a position where they had to make large repayments, so you had to design your system so that it did not create that necessity? That is the way the thing has evolved. I do not see why, with more thought at the start on the way in which this idea was to be made operable, that could not have been built in from the start.
Q201 David Heyes: This is probably more a comment than a question. I was really taken with what Steve said about the differences between local authorities. I have two local authorities in my constituency. The year ranking is one to four now. One authority struggles around the one and two level year after year and the other authority is always up there at the top level of achievement. If you look at the two localities, the demographics, the social and economic circumstances are almost identical. The only difference you can see between them - in my view a significant difference - is the consistency and quality of political leadership in those two areas. That is the defining different factor.
Mr Bundred: We would absolutely agree with you that leadership really matters, and not just political leadership but managerial leadership. The two have to be working in tandem. You can see that not just in government but in other spheres as well. There are some examples where government has provided real leadership, and that has been evident in the design and implementation subsequently of important political policy priorities and they have been very successful. An example I would give of that would be something like the Government's approach to reducing landfill and to tackling climate change: the policy was well designed, the right incentives were in place, and, although it was a very ambitious target, we reported relatively recently that it looks like the targets will be achieved. But there are other examples where the leadership is not sustained over any prolonged period and that is often because there is no kind of consistency either at the political or the managerial level within government. If you look at the bodies within our remit there have been four different government departments responsible for local government since 1997. I have been in my post since 2003, during which time there have been four secretaries of state for health and you see the same movement at senior levels in the civil service too.
Q202 Chairman: Just on the question that David asked originally about the importance of the quality of political leadership and administrative leadership. Steve, you were able to say for the Audit Commission that your work had shown that this was pivotal and yet, Tim, from the NAO side you had to say this was all off limits to you. The question is how can it be off limits to one audit body and yet integral to the assessment of good government for another audit body? Following on from that, why is it that you are not doing the kind of audit of central government in these areas that is being done for local government? Why do we have these capability reviews that are done by somebody other than you, why does Steve do his comprehensive performance assessments of local authorities but you have no comprehensive performance assessments of central government; is there not a mismatch here?
Mr Burr: There are differences. For example, with local authorities you have a plurality, quite a large number of different bodies, which are all delivering the same range of services so an approach which relies on ranking performance in terms of benchmarking them against each other will work and be quite telling and effective. There is only one Ministry of Defence, there is only one Home Office, there is only one Defra, and they are dealing with very different sorts of challenges, very different sorts of tasks so to compare the performance in that way directly is more difficult. Indeed, the capability reviews do not actually do that; they look at what the capability of a department is, its potential if you like to deliver good performance. They do not actually look specifically at the whole organisation and performance delivered.
Q203 Chairman: This makes my point stronger.
Mr Burr: I was not looking to argue otherwise, I was just really trying to set the scene in terms of the nature of the task. We do of course produce numerous reports looking at different aspects of the way in which government departments deliver particular services. We have not yet sought to produce some overarching verdict on whether a department is performing strongly as a whole or not, because there would be a risk of losing the plot and not producing the kind of clear conclusions that you can if you are looking at a specific set of service issues which are linked and therefore are auditable. Whether the Ministry of Defence is doing a good job is in a way a larger question. You also raised the question of why, if the Audit Commission can reach judgments on the political leadership of local authorities, we cannot reach judgments on the political leadership of government departments. My role is as an Officer of the House serving directly the Committee of Public Accounts and, as I said, the way that convention operates there is, that accounting officers are accountable to that committee which I serve; ministers are accountable to the House.
Q204 Chairman: We know the problems, we are trying to get to the solutions, and I am still not sure listening to you whether you are saying that a rigorous assessment of central government departments, more rigorous than capability reviews, is something which is not doable in a technical sense or whether it is perfectly doable but you are not currently able to do it but you would quite like to. Which of these is it?
Mr Burr: I would not like to say that it was not doable, and I am not saying that. What I am saying is that in practice it has proved more tractable and more conclusive to be able to look at what has been achieved in particular programmes, and where evidence can be brought together in a form that is manageable in terms of an inquiry by the Committee of Public Accounts which looks at the ability of the department to discharge that particular service. That is the way we have done it because it seems more tractable and more effective and more conclusive, but I am not saying it could not be attempted.
Q205 Mr Prentice: Could I stick with you if I may? This is a tremendous report on Good Government which you did for the Committee, but reading it I ask myself why is it that despite all your reports we still get huge cock-ups occurring. Are we congenitally incapable of learning from mistakes or are we always going to repeat past errors?
Mr Burr: We had the same reflection ourselves and we are in the middle of a report on helping government learn, because we do think that is a question that the record very much raises in terms of the ability to repeat the same experiences without apparently being able to learn and transmit the lessons from that.
Q206 Mr Prentice: Do you ever get angry - and I am not necessarily inviting you to be angry today - that despite all these reports that you tell us about you get these gigantic cock-ups, no one seems to take the blame but the end result is that people out there feel more alienated from government than ever. Does that just make you angry?
Mr Burr: It does not just make me angry - it may do that too - but we have our part to play, which we do not shirk, working with the Committee of Public Accounts in trying to make that learning more effective. We look into these issues, be it tax credits, be it the Rural Payments Agency, be it the Child Support Agency and so on; we try to get at what has been going on, why the problems arose, why they were not resolved and dealt with more effectively, why it took so long to reach a solution, and then of course there is the process whereby the accounting officer responsible has to explain ---
Q207 Mr Prentice: And then off it disappears into a big black hole.
Mr Burr: I do not think it does quite, because the committee will report on that, the Government will respond, committing itself to action which will be designed to address the difficulties, and that can lead to major change and major reform, for example in tax credits or in the way that the CSA system has changed.
Q208 Mr Prentice: I am not going to ask you the details, that would be unfair, but I had a debate yesterday on education maintenance allowances. A cock-up I described yesterday of galactic dimensions - 200,000 students waiting for their money. At one stage I was told by the minister the backlog had been cleared and 12,000 students were waiting for their money, hastily revised to 26,000. The whole thing is just appalling; yet when I looked at the history of this affair all the procedures had been followed, all the rules and regulations had been applied, the gateway review which you talk about in this report, the transfer of the contract from Capita to Liberator had been waived through by the gateway review of the Office of Government Commerce and still there is this huge cock-up. The accounting officer, the permanent secretary, has waived any possibility of penalties; Liberator under contract should have paid £3 million in penalties and instead we, the taxpayer, are paying Liberator £4 million so they can transfer their IT equipment from the company responsible for the cock-up to Capita who originally had it. That is appalling, is it not?
Mr Burr: Yes, and we have looked at cases where similar difficulties have arisen and have pressed for that kind of restitution and those kinds of levers which the Government has to make sure that the costs lie where they should. Those should be activated and should be effective. I would not want to imply though that there is no learning from those kinds of experiences, because tax credits has changed in the way it is administered, the Child Support Agency has changed, the Rural Payments Agency has changed. The way that these services are delivered has been reformed in a way that is designed to tackle the difficulties.
Q209 Mr Prentice: Yes, I understand, but it is all after the event, after the damage has been done. In this excellent report that you did for the Committee you talk about people taking personal responsibility for programmes, and with the complexity of government delivery you talk about £79 billion to £80 billion of state services that are now delivered by private sector organisations, third sector organisations; how is it possible in this new complex world to pin responsibility on individuals and if there is a huge cock-up to make sure that that individual pays, either with his or her job - big rewards, big penalties - or in some other way? People just seem to walk away from these catastrophes.
Mr Burr: That is of course a matter for those government departments to take any disciplinary action that may be appropriate and to draw the right conclusions from it.
Q210 Mr Prentice: What I am trying to get at is would you like to see a new kind of culture? When things go wrong, we expect people to fall on their swords, to resign. I am not just talking about politicians, I am talking about people in the private sector who have failed to deliver, that there should be penalties, which is not the case with the administration of EMAs.
Mr Burr: No.
Q211 Mr Prentice: No?
Mr Burr: It is not that I do not agree; it is just that I was agreeing with you that it was not the case. If you think, for example, of the incident that occurred nearly a year ago in which details of 25 million people's child benefit and other details were lost, the chief executive of the HMRC did resign over that.
Q212 Mr Prentice: And was brought back on on a temporary contract; this was Mr Gray. People are cynical about these things.
Mr Burr: Yes, indeed, I can understand that; the only point I was making was that there was a resignation, that responsibility was accepted in line with the accounting officer regime that we have. Could there be more of that? It must be right that personal responsibility is clearly defined, not after the event but up front, so that we know who is responsible for making a particular programme or service work effectively, and that there is accountability, as there is through the Committee of Public Accounts, but accountability administratively and managerially within organisations for performance. It is not just a question of, as it were, punishing the guilty, but also of incentivising good performance.
Q213 Mr Prentice: May I just put a question to Steve Bundred? You are an expert on local government issues; I have been reflecting on what has been happening in the Metropolitan Police this week, where there were allegations of racism by the Assistant Commissioner Tariq Ghafoor and apparently a settlement; he is walking away with his full pension and a payout of £300,000. The allegation was made against Ian Blair, who is walking away with a payout of £300,000 and an annual pension of £165,000 / £168,000. Does this not feed the cynicism that people have? If there was this allegation of racism in the Metropolitan Police why should it not have gone to an Employment Tribunal to get the thing sorted out, and if there are these deals done at the MPA or at the top of the Metropolitan Police so that the two parties can walk away with a fortune - for people in my constituency, for people in most of our constituencies, these are huge sums of money and clearly at the top of the Metropolitan Police there was a real problem, it has not been resolved and the two parties are walking away with huge sums of money. That is not good government, is it?
Mr Bundred: You will appreciate that I cannot comment on the specific instances in relation to the Metropolitan Police that you are referring to. I have no idea of whether the allegations were well-founded and I do not know the details of the basis upon which those allegations were withdrawn. If I may, I would just like to say something about the wider issue you are raising and which you have touched on also with Tim, and make some comment about the local authority experience. I would make two comments. The first is that I do see many instances where people in local authorities carry the can for failure and, indeed, one of the reasons why the Commission's comprehensive performance assessment has been perceived to have real bite and to have contributed to driving improvement in the performance of local authorities is because it is perceived to have been career-threatening for individuals to be identified as having been held responsible for failure in those circumstances. The second point I would make, and it relates to your questioning really of Tim, is that it is important that we learn the lessons of success as well as the lessons of failure in relation to government. One of the difficulties that we have in this country in relation to the public services is that the penalties for failure are so much greater and so disproportionate to the rewards for success, and it creates for us a culture of risk aversion and a reluctance to innovate in some instances, which I think is less healthy than it could possibly be.
Q214 Chairman: That takes us into an interesting other area, which is the one that says, be more concrete, tell us in what areas we should be more risk-taking - presumably not in child protection for example.
Mr Bundred: Not in child protection and not in building bridges, but what I am saying is that often in public services, if you do something and it comes unstuck you expose yourself to the risk that you will be shot down. If you do nothing and you just keep your head below the parapet, you carry on and you do not take that risk, then you are very unlikely to come under fire for that. So there is an issue in relation to our culture of public services where those who get things wrong immediately come under very, very heavy attack but we do not celebrate the success of those who get things right to the same extent.
Q215 Mr Prentice: Can I just say on this point someone talked about the complexity of government and all over the shop there is a multiplicity of partnerships. Is it the case that no one takes responsibility because responsibility is now so diffuse it is very difficult to identify someone who was primarily responsible for the cock-up?
Mr Bundred: I would certainly accept that the proliferation of partnerships creates issues of accountability and, indeed, the Commission published a report on the governance of partnerships a couple of years ago which made that point. It is important that even within partnership arrangements there should be clear accountability; that I would absolutely agree with you on.
Q216 Paul Rowen: Can I just ask on that, the NAO has qualified the accounts of the DWP for the last 20 years. Last year they lost £2.5 billion; the permanent secretary says you should accept that we can lose £1 billion through fraud but what is he doing about that? Nobody has been sacked or pilloried as far as I know for this regular occurrence.
Mr Burr: The situation has been improving.
Q217 Paul Rowen: So £2.5 billion last year was okay was it?
Mr Burr: No, it was not okay and nobody would say that it was, but the amount that has been lost through fraud and error has been managed down and I know - this is a dialogue that he has had with the Committee of Public Accounts - that the permanent secretary of that department, Sir Leigh Lewis, has placed a great deal of attention and priority on tackling that problem, but it would be wrong to say that this is just money that is, as it were, irresponsibly lost. If you look at the reasons as we have done very closely, why these errors arise - this is not to excuse them or say that they are all right at all - if it was something like the retirement pension the level of error is very low and indeed I specifically, in my opinion on the accounts of the DWP, exempted state retirement pension, which is much the biggest benefit, from the scope of the qualification because that was administered to a high standard of accuracy. Where the problems tend to lie is where entitlement to benefit is dependent on complex contingencies like disability or where it is dependent on income which may be fluctuating and hard even sometimes for the claimant because some of the errors are the result of claimant error.
Q218 Paul Rowen: They are not the majority; with respect, they are a very tiny minority of the proportion. If you take the Social Fund, for example, 60% of all determinations when people are applying for a crisis loan are wrong. Given that that is an ongoing situation what are you doing to make sure that there are procedures in place within the department to make sure that that does not happen?
Mr Burr: A great deal. I cannot answer for the particular figures and I do not have them at my fingertips, but we are working with the DWP all the time in terms of where they need to focus in tightening up their controls, and the movement is in the right direction. There is a debate as to how far one would actually be able to eliminate error and causes of error without some more radical simplification of the system, which would bring its own problems in terms of the effects it would have on people's benefit entitlement, because some of the complexity is born of a desire to be fair and to distinguish appropriately between different types of claimants and different situations.
Q219 Paul Rowen: In terms of the changes that are now happening, with all the disability living allowance changes, what discussions have you had with the DWP about making sure that the project management and the systems are in place? I am told that there are going to be, on DWP estimates, 55,000 lone parents this year that are being moved off one allowance onto another and are going to need to apply for a crisis loan because the system is not able to cope. If that sort of thing is known about, surely in terms of risk taking or whatever somebody should be doing something about it to make sure that the system is sorted.
Mr Burr: As part of our audit of the department we are looking all the time at the controls which apply to benefit entitlement and whether the benefits officers who actually make the decisions are in possession of the information they need to have in order to make accurate decisions and whether they do in fact make the correct decisions - that is really what a lot of our audit work with the department is about. Has there been overnight a transformation, no there has not, but the direction of travel is where one would want it to be. It does, however, get increasingly challenging because the benefit system is, for good reasons, very complicated.
Q220 Chairman: Can I just ask Ann, who has an intimate knowledge of the DWP, for any observations on this?
Ms Abraham: This is such a wide-ranging discussion ---
Q221 Chairman: That is what we do.
Ms Abraham: Absolutely; I am just wondering where to start. I had the dubious pleasure some years ago as a non-executive director of chairing the audit committee for what was then the Benefits Agency, and I remember being pretty astonished that year on year qualification of accounts was something that people just thought that is how it is really, how could you expect anything else, and I was pushing very hard - I had never had a set of accounts qualified in my life - I thought we cannot be having this. There is something which is around attitudes, and I do not for a moment suggest that Leigh Lewis shares this view, that if you are in that sort of complex business with multiple transactions you are never going to get it absolutely right and it is something that constantly is challenged. What I was really interested to hear was what was being said about the differences in the performance assessment regimes really for central and local government and whether there was a gap here. I was very sympathetic to what Tim was saying about not being able to take the same sort of approach as the Audit Commission, and I can remember when I came into this job looking at the Local Government Ombudsman's annual letter to local authorities and thinking that is a jolly good idea, I could do that. Actually it became rapidly apparent I could not do that because I was dealing with departments which were hugely different and therefore I could not make any sensible comparison, so I quietly dropped that idea.
Q222 Paul Rowen: Is not the principle though that the local authority fails, the inspectors go in; a school fails, the inspectors go in, it may happen to Haringey next week, but the DWP regularly loses £2.5 billion, oh well that is fine.
Ms Abraham: There is a big but here about that different sort of regime and how it impacts really on the leadership. I had a fair old go when the capability reviews were being designed, to get in there something about complaint handling across departments, customer focus across departments, and I failed miserably to get that built in. But it seems to me that there must be cross-cutting things across departments, whether it is about financial management -complaints handling would do as one of the components where you could look across and do comparative performance work.
Q223 Chairman: Even to the extent to which they are achieving their stated objective.
Ms Abraham: Absolutely so, and it comes down to this clarity of what constitutes success and failure, which is about good performance assessment and monitoring, and is that going on. That is what seemed to be coming through here for me. The other big strand is Tim talked about the work that is going on and trying to help government learn, the pace at which it does learn and the extent to which it does learn - painfully slow, usually on the job at the taxpayers' expense. Well actually, is that okay? No, it is not okay; it makes me angry and I am sure it makes a lot of my colleagues angry. It is that sense, I think, about what happens to all these recommendations. There is a lot of evidence, it seems to me. Let us stay with complaint handling; the Citizen Redress report the NAO did recommended that departments collect information on complaints in a systematic way. What happened to that? The DWP report - these are recent reports this year - the potential to learn lessons from complaints, not fully utilised because of the lack of a department-wide system. Health and social care - lack of systematic learning from complaints to improve NHS and social care services: both networks lack methods for capturing learning. This is across central and local government and there are missed opportunities for learning and continuous improvement. I just think about some of the work that we have done where the NAO have also been involved - I come back to these ex gratia compensation schemes, three spectacular failures, civilian internees, the trawlermen - you could not make it up, it is just an extraordinary story - the miners' compensation scheme. I made recommendations, the NAO made recommendations for cross-government guidance on what to do if your minister says we need an ex gratia compensation scheme. I am sure the Treasury has got a nice tick in the box against ombudsman's recommendation complied with, guidance in managing public money. Now who has learnt anything from that? To what extent are civil servants aware of that, what has been done to promote and share that learning, and those dreadful experiences that people have had to put right, and the next time a minister says we need an ex gratia compensation scheme because there is a political imperative that drives it, what will the next civil servant facing that situation do? I do not know where the learning is.
Q224 Chairman: Is it not your point that there is no bit of government or no somebody in government whose job it is to make sure that happens?
Ms Abraham: Yes, absolutely, and if the Committee wanted to drill down a bit into this, just tracking the learning from the work that has been done by my Office and the NAO on ex gratia compensation schemes; yes there is a bit of guidance in managing public money. Anything else?
Q225 Chairman: But it seems though there is no auditor who is doing that audit exercise.
Ms Abraham: If there is I do not know where they are.
Q226 David Heyes: But, Steve, you have got the machinery to do this, you have the experience, your CPAs are superb the way they refer to my area already. They really focus the minds of those local bureaucrats, those chief executives, those little local princelings, on getting the job right and working with your people to improve the performance. You have proved over and over again that you can do it and it is effective; why can we not translate that into central government, could you do it for central government?
Mr Bundred: Tim has already explained the position in relation to central government. Firstly, my experience of local government is that well-run, self-confident, ambitious organisations welcome external scrutiny because they themselves learn from it, so certainly I welcome the introduction of the capability reviews in central government. I have seen from my dealings with government departments that they are taken very seriously by the senior civil servants in those departments and that real things have happened as a consequence of those capability reviews. Whether there should be other forms of assessment and scrutiny I think is for others to comment on, but again my colleagues among senior civil servants if they were sitting here would no doubt say that they are already subject to a very substantial degree of Parliamentary scrutiny which local authorities are exempt from.
Mr Burr: On that note, how big a chunk of a particular department one bites off in conducting an accountability review of any kind is of course a question we can discuss, but it is not as if government departments are not exposed to scrutiny of what they do. If I could just refer to our own work, we produce 60 reports every year which look, I would argue, pretty thoroughly at aspects of departments' business, the Committee of Public Accounts holds 50 sessions every year and out of that, as our report indicates, it is possible not only to distil a lot of lessons but also examples of where that has had an effect and where its views have been addressed. I know that it would be better if, in a sense, the problems had not arisen in the first place, but that there is an accountability process which actually from all my contacts with permanent secretaries and indeed the wider view of the process in the media and elsewhere - actually the accounting officer system, which is a system of personal responsibility - is I think perceived by them and more generally as pretty tough.
Q227 Chairman: There is excellent evaluation of programmes that then feed back into departments and have some scrutiny through Parliament and so on, but the question that we are exploring is whether, comparable to local government, there ought to be some sort of more systematic external audit of departmental performance as a whole.
Mr Burr: Somebody referred to aspects of performance which one can compare and we would certainly agree with that, and I give two examples. We have, for example, work on service contract management across departments, looking at how they do tackle the sort of issues that Mr Prentice was referring to. We have embarked on a series of reports on financial management in departments which look at the financial management of the organisation as a whole rather than just at particular programmes, and the reports that we have produced jointly with the Audit Commission on financial management in the National Health Service have been of that character and have received a good deal of attention.
Q228 Kelvin Hopkins: If I can go back to what Ann said earlier and also to her speech she made at the Centre for Public Scrutiny in 2005 in our papers, "Rushed and hasty legislation is introduced without enough consideration and consultation - leading to flawed services ..." et cetera. Is not the real problem that politicians, particularly in this era of right wing revolution, which started really in about 1970, have driven through lots of policies which are deeply flawed and misguided? I will just take the example of benefits. If we had not had reform of local authority housing, there would not have been housing benefit administered by local authorities; if we had not had this (I think) potty idea of establishing tax credits instead of benefits we would not have had yet another department administering means-tested benefits. I have asked you before if in any sensible world, with one government department administering all sorts of benefits would we have less means-testing? Is it not the politicians' fault?
Ms Abraham: I am not going to say yes to all of that, as you would expect. I said earlier something about the way the political dimension actually can play against good administration, and I was very taken with what Tim said about tax credits. Take tax credits as an illustration: I agree with what Tim suggests is possible, that it should not have been necessary to learn on the job that the recipients of this benefit were likely to budget on a weekly basis. I can remember sitting with some fairly senior civil servants from Her Majesty's Revenue and Customs in the fairly early days, before we produced our first tax credit report. We were talking about the experience of complaints to us and the impact of what was going on here when we had not just overpayments but fairly systemic maladministration just across the delivery of all of this, lots and lots of problems. They were at pains to explain to me how this system was supposed to work; it was annual assessment and it was important to understand that, and that "if people were overpaid, what they should do is put this money in a nice little interest-bearing account". That is a quote. It seemed to me that there was a total lack of understanding about the customer base. If you are planning the delivery of a new benefit to a new set of customers who you have not worked with before, is it not a good idea to go and find out something about those customers or talk to some people who do know about those customers, which is probably any MP and most advice sector organisations. But it really was a revelation I think, certainly from what I observed, that the beneficiaries of tax credits were likely to budget on a weekly basis and were not going to carefully put aside what was possibly an overpayment because life was not like that. What do my Principles of Good Administration say about being customer-focused, designing things well, planning well - it is perfectly possible to work that out and to say well actually maybe we need to build in some safeguards rather than find it out along the way. What was going on there was poor administration in the sense of designing things without proper research. If the proper research had identified that what you then needed was quite a complex administrative system which was going to be difficult to run and needed, in language I have used before in front of this Committee, meticulous administration and needed to be quite people-centred, you could not do it all by automated systems, you needed people intervention to sort out the nonsense, then the message to ministers would have been if this is what you want to do, then actually the administrative cost of this is likely to be quite high. If that was working well then the combination, it seems to me, of good administration, the courage to tell ministers that actually if that is your policy objective there might be other ways of delivering it, ought to play towards good government. I suppose that is a very longhand way of saying, you know, if there are daft political ideas about the place, but in order to deliver perfectly good and laudable policy objectives, then working well together - legitimate policy objectives, good administrators, good leadership - ought to get good results.
Q229 Paul Rowen: How do they learn the lesson? We have now got a situation where we have had all that and we know all about that; we are now getting lone parents back to work and, as I say, they estimate that 55,000 of them are going to need to apply for a social fund loan because of the difference between the timescales of working out what they are entitled to and the payment. How do you make sure that down the track the same department is learning the lessons from its previous failures?
Ms Abraham: You will probably read the next report that the NAO are going to produce on helping government learn, but fundamentally it seems to me that there are cultural shifts here about being open, to learning, to scrutiny, to external challenge which, from my observations, are not built into the civil service culture.
Q230 Kelvin Hopkins: I think you have made my case and we agree.
Ms Abraham: We invariably do.
Q231 Kelvin Hopkins: You are all three of you admirably cautious in what you are saying, restrained - understandably so - but there must be a point at which you go home and say quietly to your friends and relatives, what are these mad people doing?
Ms Abraham: I go home and I say "Kelvin Hopkins was right again".
Q232 Kelvin Hopkins: Behind closed doors you must sometimes tear your hair out, I am sure, but let me turn to Steve. You make some very complimentary remarks about local government officials, local government administrators, and many of them I have met. Equally I was a councillor 35 years ago, but central government has not trusted local authorities and Mrs Thatcher abolished some of them. She cut the ground from underneath them financially by taking away some of their funding, and now we have a government which has insisted on things being farmed out to quangos, to ALMOS, to trusts, to housing associations, to academies, to new deals for communities - surrounded by consultants and privatisation. Then they have changed the structure of how local government works to give as little power as possible to the backbenchers. You have officials in local government who are constantly looking over their shoulders and ticking boxes to please central government rather than actually being driven by what they should be driven by which is their public service ethos. Is that not the problem?
Ms Abraham: A simple yes or no will do.
Mr Bundred: It is important to recognise how local government itself has changed enormously over the last 20 years. Mrs Thatcher may well have been right to have reservations about some aspects of local government at that time; certainly we have seen enormous improvement in the performance of local authorities just over the last decade and with that, and as a consequence of it, we have also seen a development in the relationship of trust and understanding between local and central government, and as I said in my opening remarks, I think the new local area agreements are a manifestation of part of that. My answer would be that the relationship between local and central government is constantly changing, as is the relationship between both local and central government on the one hand and the public on the other, and the longer that local government can continue to demonstrate improvement in its performance the greater it will command respect from the public and from central government.
Q233 Kelvin Hopkins: Do not all these changes create interfaces, and interfaces mean cost, mean complexity, mean less accountability. Is that not undermining the whole essence of local government which is about open local democracy?
Mr Bundred: I do not think I would agree that local democracy is undermined. As I said to David Heyes earlier, our observation is that the best local authorities are characterised in part by strong political leadership and that strong political leadership is in touch with its communities, understands its communities and feels itself to be accountable to its communities. I would not agree that local democracy has been undermined.
Q234 Kelvin Hopkins: One question for Tim Burr because in the previous Parliament there was an attempt to legislate to effectively get the NAO under the wing of the Treasury, and many of us in Parliament resisted that; the legislation was dropped because it would never get through the House of Lords. Was that not the high point at which that particular government - in the same spirit as successive governments - was trying actually to aggrandise total power to itself and to resist criticism from outside organisations. They do not like Parliament, they do not like backbench MPs and they certainly do not like the NAO when it makes critical reports to the Public Accounts Committee.
Mr Burr: Forgive me, I am not quite sure that I can locate the attempt that you are speaking of to bring that about, but certainly we would strongly resist any such suggestion and I am sure the Committee of Public Accounts would as well.
Q235 Paul Rowen: There is a review going on at the NAO and it is described in this article here as, rather than muzzling the dog, trying to rebuild the kennel in the dark. What is happening and what should we be doing to strengthen the role of the NAO?
Mr Burr: What is happening is that the National Audit Office is being reconstituted so that instead of just being me and those that I employ, it will be a statutory board with a non-executive chairman and a small non-executive majority on the board. Arrangements are being carefully made so that that does not encroach upon the professional freedom of the Auditor-General to reach opinions on the accounts of government departments, and indeed on the value for money that they have achieved, but it is designed to ensure that within the organisation there are appropriate checks and balances dedicated to good administration.
Q236 Chairman: I want to ask you two very quick things, if I could ask them quickly and if you could answer them quickly then we are done. One is about this complexity point which comes out of Gordon's question and Kelvin's. Is it the case, do you think, that if you have a complexity of organisation so that people do not know who is responsible for anything any more, you probably should not do it, and if you have a complexity of administration so that it produces the consequences that Ann describes you probably should not do it. Should complexity by itself sometimes tell you that you should not go down a particular route? Just in a nutshell.
Mr Burr: It does tell you a lot and it would certainly tell you that you are at high risk. You need to ask yourself the question: do I have the capacity to manage that risk?
Q237 Chairman: Could I just ask you this finally. If you could just say one thing, all of you - and I know this is an impossible question but I am going to ask it - if there is one priority that you could point to that might assist in the search for good government, what would you nominate?
Mr Bundred: The point that I would make which has come up during the course of this morning's hearing is that leadership really matters and when central government attempts to provide leadership on often quite complex issues, too often in my view that leadership is undermined by inconsistency between departments and a lack of focus over time.
Ms Abraham: Mine is going to be a somewhat obvious answer but I would say - because I would say that would I not - take complaint handling seriously, do it well and learn from it.
Mr Burr: Politicians and administrators should work together really to understand the practical implications of the policies they are seeking to implement and understand that designing something properly does not need to call the policy into question but it is essential if the thing is actually to succeed.
Chairman: Thank you very much and thank you again for putting all the work in to produce these distillations of your own work, which we found very helpful. I hope you found them helpful to do; we have built on them today and we have had, I think, a very interesting and useful session. Thank you to all of you.