Cross-government Cost-cutting

Wednesday 21st December 2022 Lords Chamber

Question for Short Debate

13:30

Asked by

[Lord Bird]

To ask His Majesty’s Government what estimate they have made, if any, of the savings that might be realised by their cross-government cost-cutting exercise.

[Lord Bird (CB)]

I will take a leaf out of some of the interesting ways that noble Lords begin discussions in this House. Recently, there was a big discussion on railways and someone—I will not mention who, because I cannot remember their name—described a particular train journey. They were talking about something very big, the railway crisis or whatever you want to call it, but using a little anecdote to tell the whole story. I want to start with that idea, so please bear with me.

I am going to talk about a young woman I met three years ago. She was a librarian in a prison that specialised in sex offenders. She was doing a very important job; she was trying to give something to a group of people, some of whom were banged up for life and some were in and out, who everybody else would rather shy away from. None of us likes sex offenders and people who do things like that, but she was working away. This young woman had four children. On top of that, she was paying a mortgage on her house and was about £10,000 away from paying it off. She left that job and did other jobs, one of which was for Stoke-on-Trent City Council. On two occasions, the council overpaid her. The first time, she managed to pay it back, but the other occasion—the mistake was made by the council—will lead to this woman, at 4 pm on 6 January, being thrown out of the house that she has almost finished paying for.

I use this as an example of what I call a miscarriage of common sense. That is how I see it. You cannot really blame the council, which went through all sorts of rigmarole to get its £7,000 or £9,000 back. Unfortunately, the young woman had three deaths to deal with, almost all at once, including her own father. In the miasma of a life led in poverty, myopia took over. She put her head in the sand and just lost it every time there was a court case, a letter from a solicitor and all this sort of stuff. She was declared bankrupt and is now leaving her home. She and her four children will be homeless on the Epiphany. As the House knows, that is the day the three wise men visited—but there is a lack of wisdom here.

This miscarriage of common sense is largely because the young woman lost the plot. The reason I am interested in this is not just because I know this woman, but because it is exactly what happened to me when I was five and when I was seven. My mother lost the plot and did not pay the rent, and I was homeless at the age of five, along with my four brothers. I was homeless again at the age of seven, with my five brothers. We ended up in a Catholic orphanage in north London for two or three years. I really fell low; the others seemed to bounce back. I spent much of my life getting over those foundation stones of distress.

That is why I hate this idea and want to do everything possible. I am hoping to appeal to the Minister, because I know she has a good heart, to maybe ring up Stoke-on-Trent and ask if the council can stop the dogs, bailiffs or whatever you call them from going after this young woman and kicking out her four children. The council will not pick up the bill, because the house is in the neighbouring county of Staffordshire; she lives in Newcastle-under-Lyme. The council that is throwing her out is passing on a bill of maybe £30,000 to £50,000 a year. I do not know the exact figures to house a homeless family in that area, but that is an example. I do not blame the council. I am just asking it to rethink and not to make this a big issue. Do not destroy the lives of these children and this young mother.

Sorry, I must have a drop of water. Unfortunately, we had a Big Issue event and it involved a lot of drink. As I do not normally drink—well, God bless me. Anyway, I did get here at last.

There is a lovely printing term—it is not a rude term—called arsy-versy, so I would like noble Lords to look at my question upside down and asked themselves, “Is the noble Lord, Lord Bird, really interested in what estimate the Government

‘have made, if any, of the savings that might be realised by their cross-government cost-cutting exercise’”?

I am actually more interested in how much it will cost them socially to make those cuts. I do not believe that the Treasury says, “We are going to cut a bit here and cut that bit, and this is the effect it will have.” We could take £10 out the system, for instance, but it would actually cost us £20. When money is taken out the system because of austerity, as was demonstrated between 2010 and 2016, the problem bleeds into other areas.

I keep saying this and will say it again: when Covid came along, our hospitals were almost full, at 85%. You need 10% for eventualities. In that situation, all you do is pass on the problems. That is why austerity is too expensive. It is too expensive not to repair a few tiles in the roof but to let the roof fall down.

One of the major problems we have is the law of unintended consequences. I am appealing to the Government not to allow this injustice to happen, because it will harm people if we do anything that causes people to slip into poverty more. We need to protect our safety nets. We need to strengthen them and make sure that people do not fall into poverty and are not evicted because of the increase in the costs of living, fuel poverty and all sorts of things like that.

On the NHS, it is interesting that the BMA says that 50% of people who present themselves in hospital with a cardiac arrest suffer from food poverty—so there is a relationship between food and government cuts and what happened with austerity between 2010 and 2016. I have to end there, although I would love to have another 20 minutes—can I? No? Perhaps another time. God bless you all, and happy Christmas.

13:40

[Lord Greenhalgh (Con)]

My Lords, it is incredibly difficult to follow the noble Lord, Lord Bird. I started off wondering where that was going to lead. I wish him merry Christmas. I bought my Big Issue outside Waitrose in Fulham, as he knows—it is a cracking issue written by people who obviously did not go to the Big Issue party, because it is quite well written.

I first declare my interests, as set out in the register. Like the noble Lord, Lord Kennedy of Southwark, I am proud to say that I am now a life vice-president of the Local Government Association—it took me 20 years of hard slog to get there, but I am delighted to be able to declare that particular interest. I will draw on my local government experience, rather than my ministerial experience, to make a couple of points. The whole idea of cross-cutting cost cutting is a bit like “She sells seashells on the seashore”. Those of us who understand local government know that, when you talk about cross-cutting cost cutting, it is normally because you have no idea how you will save any money, and it is a sort of balancing item in the budget—that is my experience, from six years as a council leader. It is when your Section 151 officer, the finance director, has no clue about how to balance the budget, so it is called cross-cutting cost cutting, which is a sort of “We don’t know” label.

But there are ways of taking money out. It is not a bad thing to reduce costs, whether you are a Labour, Liberal Democrat or Conservative council. I always felt that it was noble to ensure that we spent every penny of every pound from the taxpayer wisely to deliver public services—and you could reduce costs. I had my ABC: A was for “asset management”, or the release of underutilised assets; B was for “budgetary control”, or controlling budgets, as I am sure the Big Issue does; and C was for “cost reduction”, which you could achieve by raising or saving money. This is a noble thing to do; it is not austerity but common sense. That is the ABC of local government. When I was in City Hall, rather than a town hall, it became the three Rs: release underutilised assets, reduce overheads and reform, for example by changing your business model—you could have more constables rather than middle managers and chiefs. That is a way can save money, and it is a noble endeavour.

When I came to Whitehall, it was incredibly difficult to apply those principles because there is something called the Civil Service. You did not deal with council officers or paid service; you suddenly dealt with people who felt that Ministers were here today, if I may say so, and gone tomorrow—certainly in my case. The idea of them following your lead on applying some of those principles was extremely difficult and frustrating. It is particularly frustrating because a lot of us come with real skills in squeezing every penny from every pound. I am a business guy—I have a business as well as a public service track record, and I can apply those principles to saving money—and it pains me to see things such as the NHS track and trace call centres being only 2% utilised. On the NHS—this is not a political point, although I know Labour or the Lib Dems may seize on it—we need inventory management systems to know what people actually need; it should not be “He who shouts the loudest gets the most PPE”. This is basic supply chain management and basic procurement skills. It is not down to politics; it happens under any Government, partly because you cannot get your hands around it in the way that you do in local government, and that is a great shame.

Going back to the way that the noble Lord, Lord Bird, started his speech, and in my final 30 seconds, I therefore do accuse Stoke council of a miscarriage of common sense. For goodness’ sake, if it is a few thousand pounds, do something about it: intervene and use your common sense. You can use common sense, whether in local, regional or national government. I commend the noble Lord, Lord Bird, for raising this, and I am right behind him. Let us get Stoke council to behave itself.

13:44

[Lord Watson of Wyre Forest (Lab) (Maiden Speech)]

My Lords, I have a vivid memory of preparing for a Lords Select Committee when I was, briefly, the Minister for Civil Contingencies at the Cabinet Office. The lead official handed me a one-foot-high pile of paper reading matter. Sensing my dismay, he said, without any sense of irony, “Yes, Minister, the Lords is a very different place from the Commons. I’m afraid they actually know what they are speaking about in that place”.

I have found other differences, too, in the last 48 hours. From the day of my introduction, I was made to feel very welcome. The doorkeepers, Garter and his team, Black Rod and her team, our clerks, the catering staff and our IT people all displayed kindness and professionalism, which is deeply appreciated. My kids had a wonderful day, the highlight of which was a selfie with “I’m a Celebrity” star Matt Hancock—which, perhaps more than anything, impressed upon me the difference between the Commons and the Lords.

I am extremely grateful to my friends and colleagues, my noble friend Lord Mandelson, of Foy and Hartlepool, and the noble Baroness, Lady Kennedy of Cradley, for introducing me. I have played a significant role in the life of my noble friend Lady Kennedy. First, I recruited her to the Labour Party. Nearly as important as that special moment, I also introduced her to her husband, my noble friend Lord Kennedy of Southwark, my Chief Whip, who assures me that this event affords me no special privileges or pleading with the Whips’ Office. In that one sense, the Lords is very similar to the Commons. I am also extremely grateful to my noble friend Lord Mandelson, who did me the honour of introducing me. Nearly 40 years ago, I was his photocopy kid when he was the director of communications for the Labour Party, and, throughout that time, he has taught me much, and it is fair to say we both agree that we have been through a lot together.

As I think the noble Lord, Lord Bird, alluded to in his speech, the big changes, when you are looking for cross-departmental savings, are made when you ally them with cross-party unity, and I will highlight a couple of areas which require cross-party support. The first area where consensus is always better than disagreement is police reform. I apologise unreservedly to Lady Brittan for the role I played in the investigation of historic child sexual abuse. Her experiences led to several recommendations about how the police conduct themselves. I am sorry, and I owe it to her to work to achieve those aims in this House in the months and years ahead.

The second area is on the future of defence. The strategic nuclear deterrent has served to keep this nation safe from major state-on-state conflict throughout the Cold War and into the 21st century. Its utility remains the credible decision when the Government are faced with the ultimate choice. However, recent history tells us that it does not deter against new strategic threats: threats to our nation, its values and our allies and friends. From the illegal invasion of countries on our allies’ doorstep to the physical attacks and cyberattacks on our national infrastructure, we need new tools in our armoury to complement the nuclear deterrent, including digital and high-tech weapons such as offensive cyber and autonomous systems. They need to be procured and deployed with cross-party consensus and with the same level of ethical and moral supremacy as our conventional and nuclear weapons to ensure that, when aggression is threatened, we can deter, regardless of how our adversaries choose to threaten us.

So I congratulate the noble Lord, Lord Bird, on his amazing speech. I too have known him for many years—he is a legend in my life—and it is a deep honour to make my maiden speech in his debate.

13:48

[Lord Wallace of Saltaire (LD)]

My Lords, I am glad to be able to welcome the noble Lord, Lord Watson, who has returned after his three-year leave of absence from Westminster. He will find returning a little difficult. I expect that he has already picked up that we are much more polite in this House. If we really want to be insulting, we will probably say something such as, “I am not entirely sure that I followed what the noble Lord said”.

I am very glad to see that he spent his three years very well by publishing books, getting involved with the charitable sector and, most of all, through his involvement with UK music. We have a good group of Peers who are actively concerned about music. I will tell him a little story about that. Most of the time, none of us expect anything we have said in the Chamber to be reported or heard anywhere else, but, after our debate on the national music plan in the week before last, I went to a memorial service at the abbey just across the road for a former organist and discovered that absolutely everyone in the congregation had watched the debate, heard everything we said and wished to continue discussing it with us. So we welcome the noble Lord and look forward to his continuing to campaign for music in the widest sense and to the many more speeches he will make.

We are all in favour of enterprises regularly checking their costs and where they prioritise their spending. Any enterprise, private or public, should be doing that on a regular basis. However, the calls for the Government to have a cost-cutting exercise often—too often, sadly—have a different basis. I noted that, last week, Conservative Way Forward, the Thatcherite grouping that Steve Baker chaired before he entered the Government, published a paper suggesting that, if they were to make major spending cuts on equality and diversity measures within the Civil Service, there would be room for tax cuts. That seems to be yet another example of the belief on the hard right of the Conservative Party that somehow the public sector is inherently inefficient and filled with pen-pushers and people looking after their own interests, and that there must always be more money to be squeezed out of it. The idea that the public sector is disproportionately prone to waste and therefore can be squeezed all the time to save money without damaging outputs is nonsense. Unfortunately, that nonsense is promoted by the Institute of Economic Affairs, the TaxPayers’ Alliance and various others, including Jacob Rees-Mogg, whose demand that there should be a 15% cut in the size of the Civil Service has, I think, now been dropped. Perhaps the Minister could confirm that.

There have been many examples of non-cost-effective cuts. The demand in 2010 that the police force should cut 20,000 members—which I deeply regret the Liberal Democrats in the coalition Government did not manage to stop—has clearly led to an increase in crime, to a decrease in prosecutions and to a desperate attempt to regain the numbers that have been lost. Another example is the fund spent on outside consultants by the Civil Service because it does not have enough personnel to deal with particular crises. Millions and millions of pounds were spent on consultants, such as KPMG and others, when good civil servants could have done the work themselves.

Other examples include cuts in the Home Office leading to long delays and additional costs in the asylum system; cuts in the courts and justice system leading to overcrowding in prisons and a rising number of people in prison on remand; and privatisation and cuts in the probation service leading to a rise in reoffending. I recall a conversation I had two years ago with a head teacher who remarked that cuts in children’s social services had increased the demands on schools to provide services for their students that they simply had not had to deal with before. My noble friend Lady Brinton will provide a number of examples from the National Health Service.

I end by simply saying that the pursuit of tax cuts at all costs, regardless of their impact on the services provided, is irrational and ideological, and it ought to end.

13:53

[Baroness Bennett of Manor Castle (GP)]

My Lords, I thank the noble Lord, Lord Bird, for securing this crucial debate on the Government’s plans to cut even further our clearly already hopelessly overstrained and underresourced machinery of government. Yesterday in the Finance Bill debate, I focused on the social costs of the kind that the noble Lord so powerfully introduced this debate with. These are the result of the past decade of austerity 1.0, a policy that only the Green Parties across these islands have been consistent in opposing, and the threat of austerity 2.0, a cascade into a hell of poverty and inequality, which the Government have just embarked on.

Today I am going to focus on the impact on the natural world, the very foundation of life on these islands and of the economy, which the Government like to talk about as their top priority. To start topically, COP 15, the biodiversity COP, has just finished, with a better outcome than many had hoped for: a globally agreed promise, to which the UK has signed up, to protect 30% of land and sea for nature by 2030. Yet currently only 3% of England’s land and 8% of English waters are being effectively protected and managed for nature, as identified in the 2022 Progress Report on 30x30 in England by leading NGOs. As my noble friend Lady Jones of Moulsecoomb so regularly sets out in this House, our streams, rivers and seas are in a parlous state and our air is causing great damage to human health—and no doubt also to the natural world. That is in large part due to failures of enforcement as well as failures of regulation.

These are matters largely for the Department for Environment, Food and Rural Affairs—Defra. We all know, and the political journalists here in the lobby tell us, that Defra is regarded as a department pretty far down the Whitehall pecking order—far below the lofty towers of the Treasury, with its tight stranglehold over the purse strings and narrow focus on the economy. To meet our COP 15 commitments, and for these islands to make the transition to looking after the natural world in a few short years, is a huge job, yet Defra is in no way keeping up with even the commitments that have been made by Ministers here in your Lordships’ House. The ENDS report recently came up with a list of 16 areas in which the Government had failed to meet their own commitments under the Defra umbrella. One of the largest of those was, of course, the legally binding commitment to set targets for air and water by October 2022. If anyone missed them, they were rushed out late last Friday afternoon—in December.

In your Lordships’ House, on 15 September 2021, the noble Baroness, Lady Bloomfield, promised that an independent environmental assessment of nappy use would be published by the “end of the year”. That was in the middle of 2021, and it has not been published. Also in your Lordships’ House, the noble Lord, Lord Goldsmith, promised us a soil health action plan for England on Report on the Environment Bill, on 8 September 2021. It was offered as a trade-off for the other place dropping the soil targets that so many noble Lords from all sides of your Lordships’ House helped me insert into the Bill here. There is no soil health action plan as we enter 2023.

I am going to carefully anonymise my concluding remarks here, as I do not want to get anyone to get into trouble. I was speaking recently to a member of Defra staff who I know to be extremely dedicated and knowledgeable—indeed, a world-leading expert in their field. They have to be, since the problems that they are tackling in England are worse than pretty well anywhere else in the global North. This staff member’s head dropped in despair as they told me that staff had been told to prepare for a 20% to 40% headcount cut. This would be a gutting of a department already hamstrung by understaffing, poleaxed by cuts, and facing the huge burden of trying to manage post-Brexit deregulation. Can the Minister reassure me that that cut to the Defra headcount is not going to happen? Can she offer a Christmas present for nature, on these islands, where nature does worse than in almost any other part of this poisoned, plastic-choked, trashed planet?

13:58

[Lord Rees of Ludlow (CB)]

My Lords, I pay tribute to the noble Lord, Lord Bird, for instigating this debate and for his fine opening speech, and above all for his lifelong campaign to promote a fairer society.

We should welcome some savings—for instance, tightening of terms of procurement contracts and cutting the number of consultants—but most cuts are far too drastic to be absorbed by efficiency savings. Indeed, they add to costs. The gross inequalities in our society and the poverty and insecurity suffered by the sick, the old and the low paid have of course been aggravated by two events beyond our Government’s control: the Covid pandemic and the fallout from Ukraine. But the impact has been worsened by the Government’s policies; in particular, their reluctance to raise taxes.

We have learned from recent crises that there is a trade-off between efficiency and resilience. I have two examples: first, dependence on long supply chains, allied with just-in-time delivery, can be a false economy if large-scale manufacturing is jeopardised when one link in the chain breaks; and, secondly, although it may be efficient to have 95% utilisation of intensive care beds in hospital, it is prudent to bear the cost of spare capacity to cope with emergencies. It is unrealistic to claim that crises in our schools and hospitals can be solved by efficiency savings alone. These institutions are forced to pinch and scrape to make savings, which can lead to reduced efficiency because of decaying infrastructure, outdated IT, falls in staffing and staff morale, and so on. Our expenditure and outcomes have fallen below those of other advanced countries, a contrast starkly spelled out, incidentally, in a coruscating article in the latest Economist.

I had the privilege of being on the Times Education Commission, the subject of a recent debate in this house instigated by the noble Lord, Lord Lexden. An especially moving section of its excellent report highlighted the problems at preschool level. A head teacher of a northern primary school recounted that many children in reception classes could not say their name and were not toilet trained. This was a consequence of the shutdown. Home schooling was a reality for children with educated and well-resourced parents, but absolutely not for children of disadvantaged and insecure parents. Even before Covid, this contrast had grown starker because of the closure of around 1,000 Sure Start centres. It will be hard for these kids to catch up after facing such deprivations at the beginning of life. For them, equal opportunity is a sham.

At the end of life too conditions for the disadvantaged are shamefully aggravated by austerity. There is an almost decade-scale gap in life expectancy between the rich and the poor. We all know that it is the underfunding of care homes, distressing for the old and sick, that leads to the overwhelming of hospitals that endangers all of us.

These inadequacies cannot be cured by efficiency gains. The predicament that we are in surely calls for a rise in some taxes—for instance, on multinationals, on six-figure salaries, and on dividends and capital gains. Our nation should emulate the US less and northern Europe more, to sustain public services that we can be proud of and which allow the rising generation to fulfil their potential in a more secure and equal society.

14:02

[Baroness Uddin (Non-Afl)]

My Lords, what a privilege it is to follow the noble Lord, Lord Rees. I express my admiration for the noble Lord, Lord Bird; I am always in awe of his style and humour, and wish only that I had any of it. I take this opportunity to put on record my deepest respect and affection for all the staff of this House, wishing them a beautiful Christmas. I also welcome the noble Lord, Lord Watson, to this House. I look forward to speaking and working with him.

Today is the last day of our work for 2022. We finish knowing that the community organisations and charities, churches, synagogues, masjids, gurdwaras and temples that are the backbone of our country will be overstretched beyond their capacity. Every major children’s, disability, women’s and mental health charity is deeply alarmed by what they view as a deepening social and financial crisis. Twelve years of severe austerity measures on local government—I speak with local government experience—and assaults on front-line services have led to the result that, today, our precious nurses and ambulance workers are on strike.

What equality impact assessment has been made of the well-being of millions of families who are anxious about the cost of living; of the hundreds of thousands of children who may go hungry this Christmas, living in squalor and in degrading, unfit, temporary or homeless accommodation; of the women and their families fleeing violence and abuse; of people with disabilities and their carers who are struggling with a pervasively poor-quality support system for their most basic needs and community services; and of patients with mental health needs—we have talked about them this week—who we know are languishing on medication and in poorly staffed hospital units simply because, when discharged, they have little or no community facilities to rely on?

According to Mr Ray Clarke from the Isle of Wight, who is among those who have written to me recently, the Cabinet Office has apparently instructed DWP, HMRC and other departments, as a cost-cutting measure, that they do not have to provide a telephone service but can instead direct people to online services. Can the Minister say whether this is the case? If so, will that not seriously breach equality laws and make it difficult for the millions who do not have access to adequate internet? This surely adds even more pressure to crumbling front-line services, adding to stresses caused by the gigantic wave of government-induced financial crises—of course, I cannot forget to mention the loss of billions wasted on faulty PPE. In the light of the factors I have highlighted, and which others have spoken of, can the Minister say whether any review would consider and take these on board?

The Government are running the sixth-largest economy in the world and, one after another, poor decisions have crippled our economy and international reputation. Any consequent efficiency savings review worth its name must have absolute regard for societal impacts, or we will jeopardise safeguarding our children’s futures and the Government will rightly stand accused of being not fit for purpose. Will the Minister assure this House that the Government will prioritise the needs of our citizens over costly political ideology and dogma?

14:06

[Lord Brooke of Alverthorpe (Lab)]

My Lords, I am grateful to the House for allowing me to nip in quickly. I just want to express a few words of thanks. I am grateful to the noble Lord, Lord Bird, for introducing the debate and, as usual, for being provocative on what is needed much more from the Government these days and which seems to be absent—some attention to common sense. So many of our policies seem to go awry and we do not seem able to do the simple things. I also take this opportunity of welcoming my noble friend Lord Watson to the House, and thank him for his very important maiden speech, and in particular his apology. To apologise like that takes some doing, and it is right for us to say that we are sorry ourselves, to accept it and welcome him. I very much look forward to his contributions and the work that he will do in the House.

On the subject itself, I will be very brief. I am surprised that the contribution from the Green Bench did not mention this, but rather than looking all the time for growth, growth, growth, given what is happening to the planet we should now be looking for life. Less of something is better for us and good for the planet, good for the universe and good for individuals. Why do we need to grow, grow, grow? Why do we not start to look to consume less food and drink every day, as a number of noble Lords have suggested? We would all be better at the end of the day if we did that. Why do we not look to travel less, rather than to travel more and use planes, as we have done in the past? We could use less, and stay in our communities and with our colleagues. There is a whole range of areas where we could do this, such as fuel. Why do the Government have to have a debate on whether to advise people to economise on the use of fuel? Common sense should prevail. As I promised I would speak only briefly, I will leave it at that. It is a different approach, and it is time for a different approach on the economy.

14:09

[Baroness Brinton (LD)]

My Lords, it is always a pleasure to follow the noble Lord, Lord Brooke, who made some very pertinent points.

First, I declare my interest as a vice-president of the Local Government Association and congratulate the noble Lord, Lord Bird, not just on securing this debate but on, in his usual inimitable style, making us think outside the box. Both he and the noble Lord, Lord Rees of Ludlow, reminded me of the Tennessee STAR Project in the 1980s and 1990s, which discovered that every dollar spent on under-7s in deprived areas saved a further $7 in later life, whether in the criminal justice system, catch-up education, skills for work or benefits.

The noble Lord, Lord Greenhalgh, talked about council budgets. In 1993, when I was elected to Cambridgeshire County Council and immediately became the portfolio holder for education and libraries in the Lib Dem-Labour coalition, I had the privilege of learning from my leader, the wonderful Councillor Peter Lee, how to budget. Every year, we reviewed all our activities; every department was given a 2% target for cost cutting, but with the rubric that there had to be a detailed explanation of the consequences of those cuts. Every department was also given the chance to contribute 0.5% of its budget into a central budget for “invest to save”, so we could recommission our services knowing that, within a year or two, there would be substantial routine savings to follow. As my noble friend Lord Wallace of Saltaire noted, it is always important to scrutinise costs and review unnecessary spend.

I turn to the National Health Service. Your Lordships know that virtually everyone interested in health talks about the importance of workforce planning. The noble Baroness, Lady Uddin, referred to the current strikes. There is no doubt that they are partly about pay, but it is much more than that. They are about what is happening in our health service at the moment. Without workforce planning, NHS England has tried this year to put a cap of £2.3 billion on agency staff spending—that is about 10% in some budget areas—to “herald an efficiency crackdown”. However, agencies are being used because of the large and increasing workforce gaps.

A Royal College of Nursing survey in June this year showed that eight out of 10 shifts were not staffed at a safe and appropriate level—that is once you have added in agency staff. The costs of agencies are breathtaking, with hospitals paying up to £5,000 per hospital consultant shift. The Royal College of Physicians has said that expanding medical school places by 15,000 would cost £1.85 million annually, but that is less than a quarter of the amount being spent on bank and agency staff at the moment. Invest to save.

A month ago, we had an SI in Grand Committee on biocidal products for the Health and Safety Executive. In response to a question from me and one from the noble Baroness, Lady Sherlock, the noble Baroness, Lady Stedman-Scott, said that, post leaving the EU, the arrangements for registering biocidal products mean:

“The total budget for the HSE’s chemical regulation division has grown by 39% … between 2018-19 and 2022-23, reflecting the HSE’s need for increased resources for its post-EU exit responsibilities.”—[Official Report, 21/11/22; col. GC 239.]


I was going to refer to Elon Musk’s approach to cutting as a businessman, but I will leave that to one side.

As the noble Lord, Lord Rees, said, cuts have been severe and too drastic. This Government need to understand that they need to go back to basics: understand the role of public services, fund them properly and certainly recognise the cuts we are facing as a result of leaving the EU.

14:13

[Baroness Smith of Basildon (Lab)]

My Lords, as I listened to the noble Lord, Lord Bird, I was reminded that on my desk is a form to renew my lapsed subscription to the Big Issue—I recommend it to colleagues; it is a lot easier than always paying for an individual copy. I was also reminded why he set it up in the first place. I recall talking to him as Charities and Third Sector Minister; I can tell him that I will leave this place and renew my subscription before Christmas.

The noble Lord said something that reminds us why that enterprise is so successful and why today’s debate is so important. His reference to the “miscarriage of common sense” is worth bearing in mind for future debates in your Lordships’ House and the work we do. He used the example of a woman about to lose her home, partly because life is too tough and too hard for her. All of us will know people who are finding life too tough and too hard at the moment; whether they are waiting for an appointment or on the phone trying to get through to somebody to fix something—for a workman, a health appointment or whatever it is—life is getting harder and harder and the costs are getting greater and greater. If we can return to dealing with these miscarriages of common sense, I think we can get ourselves to a much better place.

I thank the noble Lord, Lord Bird, for allowing us to have this debate. It is Christmas and, we hope, the season of good will. Other than legislation, this is the last proper debate of Parliament this year. I am grateful to him both for his tone and for introducing the issue and allowing us to have this debate.

I also thank my noble friend Lord Watson of Wyre Forest, and I am genuinely pleased to welcome him to your Lordships’ House. His speech today was really important. He mentioned an apology but, for me, what was really thoughtful and deep in his speech was his commitment; he said that he will dedicate himself and do these things to make sure that these issues can be addressed. That is a marker of the man that he is. I have worked for him for many years, and I think he has shown today why he will be an asset to your Lordships’ House. I thank him for his speech.

Other speeches today have touched on crucial issues. In terms of the cuts we are seeing at the moment, the noble Lord, Lord Rees of Ludlow, emphasised the comments made by the noble Lord, Lord Wallace, and the noble Lord, Lord Bird, has mentioned them many times before. We talk about efficiency savings, but I have been hearing about them from this Government for so long that I wonder whether there are any savings left to be made, and why it went so wrong the first, second and third times that we are still trying to make efficiency savings. Building on the contribution from the noble Lord, Lord Wallace, the noble Lord, Lord Rees of Ludlow, said that they are too drastic to be efficiency savings and are in fact harmful.

The noble Lord, Lord Bird, has made the point many times before that spending cuts are not wise if the damage done is greater than the savings made. That should be our starting point; it brings us back to the point about common sense that he made at the start of his speech. If the effect of saving money is just to push the costs further along—the noble Lord, Lord Greenhalgh, is frowning at me; perhaps if he had been here for the rest of the debate, when other noble Lords were speaking, he would understand the points I am making—so that the costs are borne by others and have a greater social and financial impact, it is not really a saving. All of us want to see the best value for money we can get. Nobody is against genuine efficiency savings, but there comes a time when cutting into the bone is damaging to society and to our finances altogether.

We have had short speeches in this debate, and I think they have been all the more powerful for that. It remains for me only to say that I wish the whole House, our colleagues, the staff and everyone here a very merry Christmas, and again thank the noble Lord for the opportunity to have this debate today.

14:18

[The Minister of State, Cabinet Office (Baroness Neville-Rolfe) (Con)]

My Lords, I begin by congratulating the noble Lord, Lord Bird, on securing this debate, and thank all noble Lords for their excellent contributions. I also congratulate the noble Lord, Lord Watson of Wyre Forest, on his maiden speech, and for the apology he rightly made to Lady Brittan. He brings the benefit of his 18 years as an MP; ministerial experience; service to the Labour Party, which seems to include the happy marriage of the Kennedys, and the Amalgamated Engineering and Electrical Union; and, of course, his enthusiasm for alternative rock music.

I was interested to see in the thoughtful article by the noble Lord, Lord Bird, in the Big Issue—which was sold to me on a snowy morning in Tisbury, Wiltshire by a lady who is always there, day in, day out—on the problems facing ex-prisoners and the importance of mentoring, on both of which I think I can make a contribution to today’s debate.

Before I respond on specifics, I would like to say that, especially in challenging times like the present, the Government face a constant struggle both to improve the economy and to make things more efficient. The initiatives that form part of our efficiency and savings review are devoted to allocating resources to the right areas—of course, the NHS and social care were prioritised on 17 November—and doing things better.

Ways of doing this include “right first time”, as mistakes are costly and draining. We want less waste. We need to use new technology better, do more outside London, and encourage public servants to be creative and come up with front-line ideas that help save money and help users. As has been said, we also need fewer miscarriages of common sense of the kind that the noble Lord, Lord Bird, described happening in Stoke-on-Trent and Staffordshire, a part of the country I particularly love. I would be happy to follow up with the relevant colleagues across government and local government to look into this case, if he would be kind enough to supply further information to my private office after the debate. Life is hard but, as the noble Baroness, Lady Smith, said, we need to minimise miscarriages of common sense.

This is very difficult, but we need to be ambitious and leave no stone unturned, so arm’s-length bodies are in scope, as well as the Civil Service. Personally, I would like to see regulators running on tighter budgets too. As everyone has said, it is a challenging time, but the Autumn Budget confirmed that departmental budgets would be maintained at least in line with those at the spending review 2021. That set UK government departments’ resource and capital budgets from 2022-23 to 2024-25. The Autumn Statement confirmed that these departmental budgets will be maintained at least in line with the budgets set at the spending review. Additional support was provided to help the most vulnerable, alongside measures to get debt and government borrowing down. To ensure that key public services continue to deliver, the Government prioritised further funding in the next two years to support the healthcare system, including the critical matter of social care, and schools. We have also recruited 32,000 more nurses compared to 2019, 4,000 more doctors than last year, and 15,000 more police officers since 2019.

The public rightly expect their Government to lead by example and to be run as efficiently as possible. That is why the Prime Minister and the Chancellor have asked departments to look for effective ways to maximise efficiency and value for money. In response to the noble Lord, Lord Wallace of Saltaire, I say that this includes looking at workforce efficiencies as appropriate, but the Prime Minister does not believe that overarching top-down targets are the right way to deliver efficiencies. As part of our commitment to levelling up, the Government also recommitted to a number of areas of capital spend that are crucial to economic growth and spreading opportunity, including the £20 billion R&D commitment, the levelling-up fund, Project Gigabit, HS2 and core Northern Powerhouse Rail, progressing Sizewell C, and the new hospital programme.

Maintaining budgets will of course require difficult decisions from departments. However, this is the responsible thing to do to avoid fuelling further inflation and ensure that the Government take a disciplined approach to public spending. We need to be ambitious as a Government in finding better ways of doing things and to focus spending where it delivers the greatest value for money for the taxpayer.

I pick up the point that the noble Lord, Lord Bird, made about the social costs of austerity and the knock-on effects of that, also highlighted by the noble Baroness, Lady Bennett of Manor Castle, but this is not austerity. We face a very challenging time, but the OBR highlighted at the Autumn Statement that spending plans announced spending reductions much smaller than the overall spending consolidation that the coalition embarked on. Indeed, we have been criticised for some for this. Total departmental spending will be over £90 billion higher in real terms by 2027-28 than at the start of the Parliament. The Autumn Statement also announced significant uplifts in spending for key public services, including the NHS and schools, as I have said.

This is not about reducing budgets and there are no savings targets. I hope it will give some comfort to noble Lords to hear that all savings identified during the review will be reinvested within departments to help to manage pressures and protect the Government’s priorities, including vital public services and higher growth. However, we will be looking for opportunities in departments to reprioritise spending away from some of the lower-value and lower-priority programmes. Such opportunities include accelerating progress on innovation and automation, and further reducing waste and duplication.

To pick up a point made about online services, I should say that they can improve delivery of services; I know that from my experience at the DWP and elsewhere. However, as has been said, there are problems for those who cannot access the internet. That is why we are investing in the rollout of broadband, which is very important—it has taken longer than it should—and access through libraries and other such areas is also important. We need to match the wonders of the online world with making it easy for people, especially for the most vulnerable and disadvantaged.

I will use one department as an example: HMRC is identifying a sustainable savings plan which would be worth over £200 million a year by 2024-25, and that is through systematic planning, tracking and delivery of efficiency savings. We also continue to make savings by reallocating roles from London, delivering the same public service for less by reducing the rent paid in London, and spreading opportunity across the country, as we have seen in the Darlington Economic Campus, which is a good example. The Government are also committed to working more efficiency by reducing waste through tackling fraud with the new Public Sector Fraud Authority, which is now up and running.

As I said, we need to reprioritise lower-value and low-priority programmes so as to get maximum value for money. The Evaluation Task Force, which I mentioned last week, is a joint Cabinet Office and HM Treasury unit which will improve the way in which government programmes are evaluated. We can feed those evaluation results to Ministers so that they inform policy and help them do a better job going forward. The Government also require that spending proposals be developed in line with the Green Book guidance on appraisal and evaluation.

The noble Baroness, Lady Bennett, had a long list of concerns about Defra—which, as she knows, is where I started my career. I hope she will take some comfort from what I said about the efficiency review. In most cases, department budgets are the same as last year and will be maintained, and that includes Defra’s budgets. The efficiency and savings review will support Defra to manage the inflationary and other pressures that it faces, ensuring that government works as efficiently as possible and focusing spend where it gives greatest value. I think she said that targets have not been announced but we have in fact now announced legally binding targets to protect our environment, clean up our rivers and boost nature, which I am sure she has welcomed. Finally, we share an enthusiasm for reusable nappies, so I will find out what has happened to her environment impact assessment.

It was a pleasure to hear from the noble Lord, Lord Rees of Ludlow, and I agree on what he said about the importance of resilience. We will be debating that subject in the new year with the report by the Risk Assessment and Risk Planning Committee. I do not personally agree with what the noble Lord said about taxes but in any event, luckily that is a matter for the Chancellor.

If I may, I will write to the noble Baroness, Lady Uddin, on well-being and equality assessments.

The policy we are discussing today fits well into other policies, especially but not exclusively economic policy. The overarching aim of the efficiency and savings review is to ensure that we can keep spending focused on the Government’s top priorities and manage pressures from high inflation, using creative ideas such as described by my noble friend, Lord Greenhalgh—I will take away his ABC and three Rs and see whether they could be helpful elsewhere. We need departments to accelerate efforts to tackle waste and work more efficiently and creatively, focusing spending where it delivers the greatest value for the taxpayer. As I said right at the beginning, if we get things right first time, that can be helpful and make a difference.

All the savings identified during the review—it is, I repeat, part of our creative and constructive approach—will be reinvested in departments and in protecting our priorities; these include vital public services and higher growth programmes, which give us more cake in due course. The Government will report on the review’s progress in the spring but, in the meantime, I wish noble Lords a welcome break and a very merry Christmas. I thank the noble Lord, Lord Bird, for giving us an opportunity to debate these matters today.