Principal Civil Service Pensions Scheme

Lord Maude of Horsham Excerpts

Monday 26th March 2012 Written Statements

[The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)]

At the spending review 2010 the Government announced increases to member contribution rates in public service pension schemes saving £2.8 billion a year by 2014-15, to be phased in from April 2012. The contributions are to be increased progressively with protection for the low paid, to minimise the potential for members to opt out of the scheme.

Last year the Cabinet Office consulted on a structure of tiered contribution rates that meet the requirements. The consultation opened on 28 July 2011 and closed on 20 October 2011, and over 3,400 responses were received. These regulations bring the increased contribution rates into force, which will apply to service from 1 April 2012 and continue throughout the financial year. The Government remain committed to securing in full the spending review savings in 2013-14 and 2014-15 from further increases to member contributions in public service pension schemes, and will consult formally on implementation in due course.

Copies of the amendment scheme have been laid before the House.

Oral Answers to Questions

Lord Maude of Horsham Excerpts

Wednesday 21st March 2012 Commons Chamber

[Barbara Keeley (Worsley and Eccles South) (Lab)]

2. What recent discussions he has had with permanent secretaries on Government outsourcing of policy advice.

[The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)]

The head of the civil service has set up a number of themed groups to explore various aspects of civil service reform. One is exploring whether outsourcing policy making could deliver more creative and innovative results, while ensuring accountability and value for money, and I met permanent secretaries recently to discuss that and other issues.

[Barbara Keeley]

The Cabinet Office spent almost £120,000 in one day in August last year on consultancy, and McKinsey & Company is reported to have earned almost £14 million from Government health policy since the election. Outsourcing policy advice is costly and can lead to conflicts of interest, so will Conservative Ministers stick to their pledge in their manifesto to reduce the amount of consultancy?

[Mr Maude]

Not only will we, but we have. We have more than halved—I stress, more than halved—the cost of consultancy to the taxpayer. Under the previous Government, such money was spent incontinently, and the result was bad value for money and the serious undermining of the self-esteem of professional civil servants, who like being asked to do difficult things and are very good at doing them.

[Andrew Bridgen (North West Leicestershire) (Con)]

Does my right hon. Friend agree that every Government need the best possible policy advice available, and that sometimes it comes from within the civil service, and sometimes from without?

[Mr Maude]

As the new Cabinet Secretary said the other day, the civil service has in the past had a monopoly on policy advice, and he and others feel that it is something worth questioning. I am sorry that it is only the Opposition who seem to have closed minds on the issue.

[Lilian Greenwood (Nottingham South) (Lab)]

3. What recent discussions he has had on the types of Government funding models available to the voluntary and community sector.

--- Later in debate ---

[David Morris (Morecambe and Lunesdale) (Con)]

9. What recent progress he has made on opening up public sector procurement to small and medium-sized enterprises.

[The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)]

rose—[Interruption.]

[Mr Speaker]

Order. I want to hear Minister Maude.

[Mr Maude]

I am grateful, Mr Speaker.

A year ago, the Prime Minister and I launched a package of radical measures to increase opportunities for small and medium-sized enterprises to supply to Government. One year on, central Government’s direct spend with SMEs is on track to more than double to nearly 14% since we took office.

[Simon Hughes]

Those are very encouraging figures. In order to encourage small and medium-sized firms and show Government transparency, will the evidence behind the facts and figures be put in the public domain as soon as possible?

[Mr Maude]

I am delighted to tell my right hon. Friend that we make this information much more public and transparent than it has ever been before. The Contracts Finder website contains much more information about tenders, contracts and successful bids than has ever been the case, but we have more distance to go, and we will do so.

[David Morris]

I congratulate my right hon. Friend on the work that he has done to help SMEs to access Government contracts, but will he now consider writing protection for small sub-contractors into every major Government contract?

[Mr Maude]

I am delighted to say that nine of the biggest suppliers to Government have already agreed that they will advertise on Contracts Finder their contracts for sub-contract as well, and that will increase accessibility. In addition, we are taking steps to ensure that payments get made quickly not only to prime contractors but to sub-contractors further down the supply chain. [Interruption.]

[Mr Speaker]

Order. There are far too many very noisy private conversations taking place in the Chamber. That is unfair to the questioner and deeply unfair to Ministers, who may well be greatly wounded by the experience.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

11. The Government say that they are committed to ensuring that 25% of all Government contracts will be awarded to SMEs, but official figures and the experience of SMEs in my constituency show that the situation is getting worse. When are the Government going to get their act together on this?

[Mr Maude]

I fear that the hon. Lady wrote her question before hearing my answer. We cannot make a commitment; it would be illegal to do that. We have an aspiration to move to 25%. The Government formed by the party of which the hon. Lady is a member did not even bother to measure how much of this was happening. In the past year, we have more than doubled the amount of spend that goes directly to SMEs, but there is further to go and we will go that distance.

[Michael Dugher (Barnsley East) (Lab)]

Last week, Mark Taylor, the co-chair of the “new suppliers to Government” panel which is advising the Minister on SMEs, resigned, saying that Government contracts to SMEs were “drying up”, that things were “going backwards”, and that SMEs were

“finding it more difficult to do business with Government”,

and accusing the Government of “recounting” their figures. Given that the Minister has admitted that the Government are nowhere near their promised 25% target, will he explain why the proportion of procurement spend going to SMEs is falling at the Department of Energy and Climate Change, the Department for Culture, Media and Sport, the Department for Business, Innovation and Skills, the Department of Health, the Department for Education, the Department for Transport, Her Majesty’s Revenue and Customs, the Department for Environment, Food and Rural Affairs, the Department for International Development, and the Treasury?

[Mr Maude]

I say to the hon. Gentleman that if Mr Mark Taylor had come to any meetings of the SME panel over the past six months, he would have been more up to speed with the considerable progress that is being made. The previous Government, for whom the hon. Gentleman was an adviser, cared so little about this matter that they did not even measure what was being done. We have, I repeat, more than doubled the amount that is spent with SMEs over the past year. That amount will continue to grow.

[Jake Berry (Rossendale and Darwen) (Con)]

T1. If he will make a statement on his departmental responsibilities.

[The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)]

My responsibilities as Minister for the Cabinet Office are public sector efficiency and reform, civil service issues, the industrial relations strategy in the public sector, Government transparency, civil contingencies, civil society and cyber-security.

[Jake Berry]

National citizen service is going to become a rite of passage for many of our constituents. Will my right hon. Friend tell me how young people in Rossendale and Darwen can find out about getting involved this summer?

[Mr Maude]

Three providers are delivering more than 600 places across Lancashire this year. Those providers are Catch22, The Challenge Network and Fylde Coast YMCA. I strongly encourage young people and their parents in Rossendale and Darwen to find out more about the NCS through its Facebook page or the Cabinet Office’s NCS website.

[Jim McGovern (Dundee West) (Lab)]

T2. What progress has been made by the commission into the West Lothian question? Many Opposition Members, and I am sure many Government Members, do not want to see a two-tier system of hon. Members in Westminster. What progress has the Minister made on this matter? Will he assure Members that we will be allowed to make a contribution to the commission?

[Mr Maude]

I am completely confident that the members of the West Lothian commission will read the hon. Gentleman’s remarks with great interest.

[Iain Stewart (Milton Keynes South) (Con)]

T4. Will my right hon. Friend tell the House when the plans to refurbish No. 70 Whitehall were approved?

[Mr Maude]

Those plans were approved in 2008, when the current Leader of the Opposition was Minister for the Cabinet Office. It is therefore surprising that the shadow Minister for the Cabinet Office chose recently to mount an unprovoked attack on the decision made by his party leader.

[Barbara Keeley (Worsley and Eccles South) (Lab)]

T3. Part of my constituency had a bad experience with the Big Lottery Fund, which awarded it £1 million, but then sat on the money for the best part of two years. Will the Minister give better policy direction to that body so that it does not award funding and then sit on it for two years?

[Mr Maude]

I hear what the hon. Lady says and I will look into it. I am surprised to hear that that was the case.

[Stuart Andrew (Pudsey) (Con)]

T5. Yesterday, Britain showed itself at its best. The Olympics offer us a chance to repeat such a show to the world. Does my right hon. Friend agree that it is disgraceful that strike action has been threatened during such a wonderful opportunity?

[Mr Maude]

It was distressing that the leader of the Unite trade union made that intemperate threat. I hope that the Leader of the Opposition will take an early opportunity to condemn these bully-boy paymasters, who are threatening, when the eyes of the world are on Britain, to bring the country to a standstill.

[Chris Evans (Islwyn) (Lab/Co-op)]

T6. Concerns have been raised about the role of Circle health care in the Government’s pathfinder programme. Will the Minister clarify its role in the programme?

[Mr Maude]

I will look at what the hon. Gentleman says and provide him with what will no doubt be a comprehensive answer.[Interruption.]

[Several hon. Members]

rose—

[John Pugh (Southport) (LD)]

T7. Had we reached Question 10, I would have asked what recent assessment has been made of Government policy on open source software and open standards.

[Mr Maude]

We are strongly in favour of using open source software wherever possible. We have established that that can cut the cost of providing digital services massively, while producing better results. On a recent visit to silicon valley, I and a number of colleagues found businesses that were capable of cutting those costs on a massive scale.

[Helen Goodman (Bishop Auckland) (Lab)]

A study by the Association of Chief Executives of Voluntary Organisations has found that applications by charities for emergency help were highest in the north-east, because the 20 poorest areas suffered 40 times as much reduction in their funding as the 20 richest. A year ago the Minister of State, Cabinet Office, the right hon. Member for West Dorset (Mr Letwin), said that the voluntary sector would

“find that there is access to a large amount of revenue”.—[Official Report, 20 October 2010; Vol. 516, c. 936.]

Has he disappeared because he no longer believes that?

[Mr Maude]

I deeply regret that it has been necessary for the Government to cut spending in the way that they have. The reason is very simple—the Government of which the hon. Lady was a member left this country with the biggest budget deficit in the developed world.

[Charlie Elphicke (Dover) (Con)]

T8. In the past decade, small business has increased employment by 1 million and big business cut it by 1 million. Does that not show that procurement for small businesses is about not just fairness but more jobs and money?

[Mr Maude]

My hon. Friend is completely right. That is why we have an aspiration to increase the direct spend to 25% of what the Government spend. We have already more than doubled that, and we intend to go further.

The Prime Minister was asked—

Handling Members’ Correspondence

Lord Maude of Horsham Excerpts

Thursday 15th March 2012 Written Statements

[The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)]

I am today publishing a report on Departments’ and agencies’ performance on handling Members’ and peers’ correspondence during the calendar year 2011. Details are set out in the table below. Correspondence statistics for 2010 can be found on 28 March 2011, Official Report, 1WS.

Departmental figures are based on substantive replies unless otherwise indicated. The footnotes to the table provide general background information on how the figures have been compiled.

Ministerial Pensions

Lord Maude of Horsham Excerpts

Thursday 15th March 2012 Written Statements

[The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)]

In the Spending Review 2010, the Government announced their intention to increase employee contributions in public service pension schemes. This followed on from Lord Hutton’s interim report on public service pensions¹, which concluded that there was a clear rationale for public servants to make a greater contribution if their pensions were to remain fair to taxpayers and employees and affordable for the country.

The ministerial pension scheme was not covered by Lord Hutton’s recommendations, but I consider it appropriate that its members face similar changes.

Last year, I consulted on proposals to make increases to member contributions in 2012-13 and this consultation concluded on 13 January. Having given careful consideration to the responses, I have decided to implement these proposals effective from 1 April 2012.

This will mean that:

Secretaries of State, the Leader of the Opposition in the Commons and Speaker in the House of Lords will pay an additional 2.4 percentage points of pay;

Ministers of State, the Government Chief Whip, the Leader of the Opposition in the Lords, the Chairman of Committees of the House of Lords and the Deputy Chairman of Committees of the House of Lords will pay an additional 1.6 percentage points of pay; and

Parliamentary Under-Secretaries, the Government Whips and Opposition Whips will pay an additional one percentage point of pay.

In line with other public service schemes, a further consultation will take place on the contribution increases for members of the ministerial pension scheme in 2013-14 and 2014-15. Before these increases are implemented, I will consider any evidence of opt-outs from the scheme in line with the Government’s commitment given on 20 December by the Chief Secretary to the Treasury.

The increased contributions will deliver an average of 1.7% percentage points of pay for the Ministerial pension scheme’s membership. These additional contributions will mean that the increase in Exchequer contributions expected following the latest valuation of the parliamentary contributory pension fund will be lower than otherwise expected. Further, the Exchequer contribution will be reduced further to reflect increases in 2013-14 and 2014-15, following advice from the Government Actuary.

Ministers in the House of Commons make separate contributions towards their pensions as MPs. Responsibility for the setting of pension provision for MPs is the responsibility of the Independent Parliamentary Standards Authority, which has consulted on proposals to increase MPs’ contribution increases.

The details of the new scheme have been laid before the House, along with a copy of the response to the consultation from the chairman of the parliamentary contributory pension fund trustees and my reply to this response.

¹Independent Public Service Pensions Commission: Interim Report 7 October 2010:

http://www.hm-treasury.gov.uk/d/hutton_pensionsinterim_071010.pdf chapter 8.

Principal Civil Service Pension Scheme

Lord Maude of Horsham Excerpts

Monday 12th March 2012 Written Statements

[The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)]

On 20 December I reported to the House on the heads of agreement on the principal civil service pension scheme to be introduced in 2015, which set out the Government’s final position on the main elements of scheme design. Since 20 December, my officials have been engaged in detailed discussions with the civil service trade unions over the remaining details of the principal civil service pension scheme. I can now report to the House that discussions on these final details of the scheme design for the principal civil service pension scheme to be introduced in 2015 have now concluded. The Government have made it clear this sets out our final position on scheme design, which we are asking unions to take to their Executives as the outcome of negotiations.

This is the proposed final agreement which reflects the conclusion of discussions on the final details with the civil service unions since I made my written ministerial statement on pension reform, on 20 December 2011, Official Report, column 150WS. The headline elements of the proposed final agreement remain unchanged from those reached on 20 December and the provisional accrual rate has been finalised.

The core parameters of the new scheme are set out below:

a. a pension scheme design based on career average;

b. a provisional accrual rate of 2.32% (equivalent to (1/43.1) of pensionable earnings each year;

c. revaluation of active members’ benefits in line with CPI; (any change in the method of indexation will be subject to consultation)

d. a normal pension age equal to state pension age, which applies both to active members and deferred members (for new scheme service only). If a member’s SPA rises, then NPA will do so too for all post-2015 service;

e. pensions in payment to increase in line with prices (currently CPI);

f. benefits earned in deferment to increase in line with prices (currently CPI);

g. average member contributions of 5.6%;

h. optional lump sum commutation at a rate of 12:1, in accordance with HMRC limits and regulations;

i. spouses/partner pension of three-eighths pension, in line with the current open scheme;

j. lump sum on death in service of two times salary;

k. ill-health benefits in line with those in the current open scheme;

l. actuarially fair early/late retirement factors on a cost-neutral basis;

m. an employer contribution cap and floor to provide backstop protection to the taxpayer against unforeseen costs and risks. This floor will also allow for an improvement in member benefits if the value of the scheme falls beyond a fixed level;

n. abatement will not apply for post-2015 service in the new scheme when members return from retirement. Abatement rules for the current schemes will remain unchanged;

o. partial retirement rules for service in the new scheme will follow existing partial retirement rules. Members with service in both the existing and the new scheme will be able to apply for partial retirement under each scheme, under the limits that exist in current schemes;

p. members will be able to take any pension they have accrued under their existing schemes without having to also take any new scheme pension at the same time, under the limits that exist in current schemes;

q. for members wishing to retire before their state pension age, there will be an opportunity to pay additional contributions to fund earlier retirement of up to three years without an actuarial reduction. Contributions will ordinarily be payable by members, but individual employers will be able to choose to provide a contribution in very limited and exceptional circumstances, that must be approved by the Cabinet Office;

r. existing added years contracts will continue in the new scheme;

s. added pension arrangements will continue;

t. members who leave the new scheme and return within five years will have their deferred benefits increased as if they had been an active member. (The rate of dynamisation for active and deferred members will however be the same, as set out in points c and f above); and

u. the Public Sector Transfer Club will continue, and consideration will be given to the best method of operation in the reformed schemes, following further discussion with trade unions;

The scheme actuary has confirmed that this scheme design does not exceed the cost ceiling set by the Government on 2 November. Copies of the heads of agreement and scheme actuary verification have been deposited in the Libraries of both Houses.

Cabinet Committee List

Lord Maude of Horsham Excerpts

Wednesday 7th March 2012 Written Statements

[The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)]

Today I am publishing an updated Cabinet Committee list. I have placed a copy of the new list in the Libraries of both Houses.

Oral Answers to Questions

Lord Maude of Horsham Excerpts

Wednesday 8th February 2012 Commons Chamber

[Charlie Elphicke (Dover) (Con)]

1. What recent progress he has made on bringing forward proposals on Government IT procurement; and if he will make a statement.

[The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)]

Soon after the coalition Government came to office, we introduced strict controls on ICT spend that saved £300 million in the year to March 2011 alone. We have opened up procurement to small and medium-sized enterprises, we are moving towards open standards and interoperability, and we are examining some of the incredibly expensive and burdensome ICT contracts that we inherited from the previous Government.

[Charlie Elphicke]

Will the Minister tell us more about how open source, getting computers to talk to each other through common standards, and smarter procurement can help to save billions of pounds, secure better computers, and break up the IT cartel that was fostered under the previous Government?

[Mr Maude]

It is becoming increasingly clear that the Government have opportunities to handle their IT and increase their digital offering in transactional public services very differently from that which we inherited. It is also becoming increasingly clear that it will be possible for both the quality of those public services and public interaction to be massively improved, at a fraction of the cost incurred by the previous Government.

[Mr Bernard Jenkin (Harwich and North Essex) (Con)]

Has my right hon. Friend had a chance to read the latest report on IT procurement by the Select Committee on Public Administration, which includes the Government’s response to our original report? We commend the Minister for that response, but there is further progress to be made. In particular, how will the Minister tackle the cartel-like behaviour of the large prime contractors?

[Mr Maude]

The reports produced by my hon. Friend’s Committee are my regular reading, and I enjoy them enormously. I commend the Committee’s work, especially its conclusions on Government ICT. I also commend the work of the Public Accounts Committee, which has focused on the subject. I think that we are making progress, but I entirely accept my hon. Friend’s point: there is much, much more to be done. The previous Government left the taxpayer in hock to an oligopoly of ICT suppliers, and we intend to move on from that.

[Nicky Morgan (Loughborough) (Con)]

2. What criteria his Department uses to determine allocations made under the social action fund.

--- Later in debate ---

[Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)]

4. What efficiency savings the Efficiency and Reform Group has identified across central Government.

[The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)]

We have made huge efficiency savings in the spending we inherited from the previous Government. In the 10 months to March 2011 we delivered £3.75 billion in savings by reducing waste. For the first time, the savings were verified by the Public Accounts Committee and by the National Audit Office in its report last week, but this is only the start and further significant savings will derive from the Efficiency and Reform Group’s programme of long-term, sustainable reform.

[Tom Greatrex]

I thank the Minister for his reply. I am a keen follower of his Department’s website and I noted that its jobs section last week advertised eight jobs with a salary of more than £100,000 before bonuses, perks and who knows what tax arrangements. Will the Minister explain how that fits with his freeze on non-essential and non-front line jobs in the public sector, and at a time when public sector workers are under increasing pressure?

[Mr Maude]

It is completely consistent with that, because we need particular skills to drive out the waste we inherited. Particularly, there is a need for commercial and IT skills. While those skills exist in Government, we do not have enough of them. Every single one of those external recruitments by the Cabinet Office will have been approved by me personally, and I make absolutely no apology at all for approving them. Where those skills are needed and a rigorous search has shown that they are not available within Government, we will recruit from outside and we will pay people properly for work that is essential.

[Jon Trickett (Hemsworth) (Lab)]

Is it not a fact that the Minister’s Efficiency and Reform Group will achieve no savings at all if the most senior officials in Government are distracted into chaotic breaches of the Cabinet Office code of conduct? Will he confirm that the Cabinet Secretary has now restored efficient Government by launching an investigation into such destructive breaches of the code as that reported in The Times yesterday of a senior No. 10 aide saying the Health Secretary should be “taken out and shot”?

[Mr Maude]

Frankly, coming from the hon. Gentleman—the Parliamentary Private Secretary to the previous Prime Minister, who operated in a No. 10 that was widely reviled as a snake pit of back-biting and anonymous briefings—that is pretty rich.

[Lilian Greenwood (Nottingham South) (Lab)]

5. What the Government’s objectives are for the big society initiative.

--- Later in debate ---

[The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)]

During 2010-11, the Cabinet Office spent just over £9 million on consultancy. The figure is down from £27.5 million in 2009-10, the last year of the previous Government. That is a reduction of more than two thirds and we anticipate further reductions in the current financial year. Across central Government, expenditure was reduced from £1.234 billion in 2009-10 to £361 million in the last financial year—that is a 71% reduction.

[Chi Onwurah]

In August 2010, the most recent month for which figures are available, the Cabinet Office spent almost £120,000 on consultants for advice on judicial reviews. Does the Minister agree that spending hundreds of thousands of pounds defending this Government’s mistakes is not the best use of taxpayers’ money?

[Mr Maude]

The Government are obliged to protect what they do in the interests of the taxpayer. I draw the hon. Lady’s attention to the fact that spending on consultants was spiralling completely out of control under the previous Government. That was providing very bad value for the taxpayer and it was very demoralising for mainstream civil servants, who felt that they were undervalued by the previous Government, whose default setting when anything difficult came up was to hire consultants. We will put our faith in the work that civil servants do. [Interruption.]

[Mr Speaker]

Order. A large number of very noisy private conversations are taking place in the Chamber, even as I speak. Some involve very senior Members who ought to know better.

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

9. What recent assessment he has made of the effectiveness of new suppliers to Government working groups in making it easier for small and medium-sized enterprises to bid for Government contracts.

[The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)]

We want 25% of the value of Government contracts to be awarded to small and medium-sized enterprises, and we have made significant progress towards that. This has so far led to a more than doubling in the amount of direct spend awarded to SMEs in the first half of the current year.

[Ann McKechin]

The Minister will be aware that his own commercial representatives of SMEs have said that it will take up to two years before SMEs stop being excluded from Government contracts. Does he agree that that is utterly unacceptable? What is he going to do to make better use of EU exemptions that protect local economies?

[Mr Maude]

I fully accept that it will take a little time to get things fully sorted out following the mess left after 13 years of the hon. Lady’s Government, so rather than chiding us for the progress that we are making why does she not congratulate us on our progress and start apologising for the mess her Government left behind?

[Luciana Berger]

Further to the Minister’s answer, the leader of one of the Government’s own working groups, Mark Taylor, who is the chief executive officer of Sirius, has said:

“There are SMEs being taken out of procurement, not put into it.”

He said that that is “simply not acceptable.” Are not Government policies, as Mr Taylor points out, making it more difficult for SMEs to take part in Government procurement projects, rather than easier?

[Mr Maude]

No, that is the reverse of the truth. The arrangements we inherited made it incredibly difficult for SMEs to bid, because the procurement processes were so bureaucratic, so clunky and so expensive, both for the taxpayer and for bidders, that many SMEs and voluntary and community sector organisations were, in effect, excluded. We are addressing that. There is more to do, but I would be grateful for some support from the hon. Lady’s side, particularly in encouraging Labour-led local authorities.

[Heather Wheeler (South Derbyshire) (Con)]

My constituent, Mr Isham, who runs a business in Willington, is also finding it difficult to break through the barriers to obtaining Government contracts. May I encourage the Minister to come to South Derbyshire for a question and answer session with local business people, so that they can learn at first hand from the master how to apply?

[Mr Maude]

I would obviously be delighted to meet my hon. Friend’s constituents, but I would urge them to look at the Contracts Finder website, where, for the first time, Government and public sector contracts are available for scrutiny. If they find that procurement is still being done in the old-fashioned, outmoded way that we inherited from the Labour Government, they should phone our helpline and we will get on the case, as we have done in many cases already, and put improvements in place.

[Gordon Birtwistle (Burnley) (LD)]

Manufacturing companies in my constituency are slowly dragging this country out of the mire in which it was left by the previous Government. Will the Minister please advise my manufacturing companies how, other than by looking at the website, they can find out about getting on the list to provide the national Government with products?

[Mr Maude]

We inherited some very rigid arrangements that militated against UK-based suppliers and at the same time provided very bad value for taxpayers. We are making reforms that make it easier for local businesses, particularly manufacturing businesses, to compete effectively, but I will happily consider the issue raised by my hon. Friend.

[Michael Dugher (Barnsley East) (Lab)]

The Government promised that 25% of Government contracts would be awarded to small and medium-sized enterprises, yet figures on the Minister’s departmental website show that the percentage of procurement spend with SMEs at the Cabinet Office has fallen from just under 11% to 7%, a decline replicated across Whitehall. At a time when net lending to SMEs is falling and the number of companies going under is increasing, why are things getting worse, not better, for small businesses on his watch?

[Mr Maude]

It is simply not the case that things are getting worse. The value of contracts being given to SMEs is rising and rising markedly from the very low base that we inherited. The other issue that we have had to deal with is the fact that the quality of information left by the previous Government was deplorable.

[Julie Elliott (Sunderland Central) (Lab)]

T1. If he will make a statement on his departmental responsibilities.

[The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)]

My responsibilities are for the public sector, the Efficiency and Reform Group, civil service issues, industrial relations strategy in the public sector, Government transparency, civil contingencies, civil society and cyber-security.

[Julie Elliott]

Will the Minister explain how the Government’s action in allowing the chief executive of the Student Loans Company not to pay tax or national insurance on his £182,000 salary is in line with his own Government’s report, “Tackling Debt Owed to Central Government”? Does the Minister agree that this Government have one rule for the rich and another for everyone else?

[Mr Maude]

The answer is that that is not consistent and it is being dealt with.

[Stephen Barclay (North East Cambridgeshire) (Con)]

T2. In reply to a question I tabled last July, my right hon. Friend emphasised the importance of reforming the civil service appraisal system. Will he update the House on what changes have been made?

[Mr Maude]

We have already put in place new arrangements for the senior civil service and they will be rolled out for the whole civil service at the delegated grades. It is really important that appraisal identifies the very best performers, rewarding them with promotion and proper pay, and pays serious attention to those who underperform, who cause massive demoralisation to the hard-working majority of dedicated civil servants.

[Graeme Morrice (Livingston) (Lab)]

T3. Given the fact that the report of the Public Administration Committee, “A Recipe For Rip-Offs”, has recommended that owing to allegations of anti-competitiveness and collusive behaviour by some large IT suppliers, the Government should establish an independent and external investigation into those claims, will the Minister agree to implement the recommendations and set up an investigation into the oligopoly of large suppliers?

[Mr Maude]

The hon. Gentleman is completely correct that an oligopoly of IT suppliers has, to far too great an extent, dominated Government ICT contracts. We seek to change that by having smaller contracts and much quicker and better procurement processes, but we have a legacy of huge contracts with that oligopoly of suppliers and are looking at how we can deal with that.

[Duncan Hames (Chippenham) (LD)]

T8. Europe’s most energy efficient data centre was recently opened by Ark Continuity near Corsham on the edge of my constituency, providing resilient top-tier security infrastructure. Given the Minister’s interest in improving public sector information, communications and technology, can I interest him in joining me on a site visit to see that world-leading technology for himself?

[Mr Maude]

I would be delighted to visit my hon. Friend’s constituency and that installation. There are now ways of providing much better ICT at a much lower cost and in a much greener way. We are exploring all of them and I would be delighted to share our thinking with my hon. Friend—[Interruption.]

[Mr Speaker]

Order. There is far too much noise. We can scarcely hear the Minister’s answers, which is unfair on the Minister and unfair on the House.

[Geraint Davies (Swansea West) (Lab/Co-op)]

T4. Sixty per cent. of Welsh Government public procurement contracts are awarded to SMEs, half of which are in Wales. In England the figure is less than 10%. Given that SMEs invest more in local jobs, pay more tax and create more growth, what is the Minister doing to ensure that SMEs get business in England, instead of the money being siphoned off abroad?

[Mr Maude]

We are radically reforming procurement to cut the cost to businesses. Bidding for public sector contracts has been far too expensive, both for the taxpayer and for bidders, and it is entirely right to say that too many SMEs have simply been frozen out of the process. We are determined to open that up and to enable more SMEs, which will tend to be UK-based, to bid successfully.

[Amber Rudd (Hastings and Rye) (Con)]

T9. I welcome the Minister’s wise decision to accept a bid from the Hastings Trust and other charities to the social action fund to build community volunteers and to promote the big society in Hastings. May I urge him to visit us in Hastings, to see the good work that is being done?

[Mr Maude]

The allure of a visit to my hon. Friend’s constituency is hard to resist. I can undertake that I or my hon. Friend the Member for Ruislip, Northwood and Pinner (Mr Hurd), the Minister for civil society, will fulfil that engagement.

The Prime Minister was asked—

Deloitte: Government Departments

Lord Maude of Horsham Excerpts

Tuesday 17th January 2012 Ministerial Corrections

[John Robertson]

To ask the Minister for the Cabinet Office pursuant to the answer of 14 November 2011, Official Report, columns 537-8W, on Government departments: Deloitte, what the (a) net value and (b) individual value was of each of the Government contracts awarded to (i) Deloitte and (ii) associates of Deloitte since May 2010.

[Official Report, 10 January 2012, Vol. 538, c. 249-52W.]

Letter of correction from Francis Maude:

An error has been identified in the answer given to the hon. Member for Glasgow North West (John Robertson) on 10 January 2012. The full answer given was as follows:

[Mr Maude]

The following table summarises contracts that are listed on Contract Finder. The total potential value of these contracts exceeds £1.47 billion; actual net value will depend on usage, particularly of framework agreements. Further information is held by individual Departments.

[Mr Maude]

The following table summarises contracts that are listed on Contract Finder. The net value will depend on usage, particularly of framework agreements. Further information is held by individual Departments.

Civil Service Pensions

Lord Maude of Horsham Excerpts

Tuesday 20th December 2011 Written Statements

[The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)]

On 2 November the Chief Secretary to the Treasury made a statement to the House setting out an improved offer on public service pensions to public sector workers (Cm 8214). This offer provided a more generous cost ceiling for scheme-specific discussions to work within, and protected all those within 10 years of their pension age from any further change. This generous offer was conditional on the Government and trade unions reaching agreement by the end of the year, including in the principal civil service pension scheme, bringing to a conclusion talks that have lasted since February 2011.

Since 2 November my officials and I have been engaged in detailed and intensive talks with the National Trade Union Committee for the civil service. I can now report to the House on the heads of agreement on the scheme design for the principal civil service pension scheme to be introduced in 2015, on which talks have concluded. The Government have made it clear this sets out their final position on the main elements of scheme design, which the FDA, Prospect, GMB Prison Governors Association and the Immigration Services Union have agreed to take to their Executives as the best that can be achieved through negotiations. There is a specific outstanding issue relating to mechanisms for prison officers to retire earlier than state pension age where we are continuing to have discussions with the Prison Officers Association. We will invite these unions to join us in further work on the remaining details in the new year, and their Executives will consult members as appropriate. The continued union engagement includes a commitment to suspend any further industrial action while the final details are resolved and unions are consulting their members.

The core parameters of the new scheme are set out below:

a. a pension scheme design based on career average;

b. a provisional accrual rate of 2.28% (equivalent to 1/43.9) of pensionable earnings each year, subject to further agreement on final details.

c. revaluation of active members’ benefits in line with CPI;

d. a normal pension age equal to state pension age, which applies both to active members and deferred members (for new scheme service only);

e. pensions in payment to increase in line with prices (currently CPI);

f. benefits earned in deferment to increase in line with prices (currently CPI);

g. average member contributions of 5.6%, with some protection for the lowest paid (the detailed structure of which is still to be agreed);

h. optional lump sum commutation at a rate of 12:1, in accordance with HMRC limits and regulations;

i. spouses/partner pension of three-eighths of pension, in line with the current open scheme ;

j. lump sum on death in service of two-times salary;

k. ill-health benefits in line with those in the current open scheme;

l. actuarially fair early/late retirement factors on a cost-neutral basis; and,

m. an employer contribution cap to provide backstop protection to the taxpayer against unforeseen costs and risks and allowance for an improvement in member benefits if the value of the scheme falls beyond a fixed level;

n. the scheme will support the use of partial retirement and will follow the recommended approach set out in the Independent Public Service Pensions Commission final report of 10 March 2011 on abatement (details to be finalised); and

o. a guarantee, outside of the scheme designs parameters set out above, of no further reform for the next 25 years.

Transitional arrangements

Scheme members who, as of 1 April 2012, have 10 years or less to their current pension age will see no change in when they can retire, nor any decrease in the amount of pension they receive at their current normal pension age. They will be allowed to remain members of their existing schemes up to and including the point at which they draw their pension rights and all current scheme rules will continue to apply.

Members who are within a further 3.5 years outside this protected group will have an additional degree of protection, in the form of further accrual in their existing schemes. This protection will be tapered in a linear fashion depending on the age of the member.

Areas for further detailed discussion

Discussions with the trade unions identified above will continue early next year, to shape the remaining elements of the scheme design such as abatement, re-employment, treatment of re-joiners and public sector transfers and contribution rates structures including years 2 and 3 of the employee contribution increases. Any of these issues that affect the final cost of the scheme will need to be taken into account in the final rate of benefit accrual. The requirement to fit the new scheme within the revised cost ceiling for the reference scheme published on 2 November will remain, and agreement on these issues will also be subject to review by HM Treasury to agree the approach taken to risk management and impact on cash flows.

The Government Actuary’s Department has confirmed that this scheme design does not exceed the cost ceiling set by the Government on 2 November. Copies of the heads of agreement and the scheme actuary’s verification have been deposited in the Libraries of both Houses.

Public Bodies Reform

Lord Maude of Horsham Excerpts

Thursday 15th December 2011 Written Statements

[The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)]

The coalition Government made a commitment to review public bodies, with the aim of increasing accountability for actions carried out on behalf of the state. Royal Assent of the Public Bodies Act 2011 marks an important milestone in this process which will allow Departments to get on with the important task of delivering the reforms I announced on 14 October 2010. Today, I am placing in the Library of the House an updated list of proposals for the reform of public bodies and guidance to support the programme of orders that will follow Royal Assent of the Public Bodies Act 2011. Copies will also be available in the Vote Office.

This Government made a presumption that state activity, if needed at all, should be undertaken by bodies that are democratically accountable at either national or local level. A body should only exist as a quango if it meets one of three tests, to which all existing public bodies have been subjected. These tests are:

Does it perform a technical function?

Do its activities require political impartiality?

Does it need to act independently to establish facts?

Some14 months on from my original announcement, we have made strong progress. We now have a legislative mechanism in place to implement current and future proposals for reform. We have announced that cumulative reductions in administrative spending of £2.6 billion will flow from public bodies over the spending review period. Where legislation was not required we have already completed more than half of the abolitions proposed by the 2010 review, and we have already started the process of conducting regular, triennial reviews of all non-departmental public bodies. These triennial reviews will ensure that never again will the quango state be allowed to spiral out of control.

Today I am able to confirm the 31 non-departmental public bodies that Departments have identified for reviews in the first year of the three-year review cycle:

Advisory Committee on Business Appointments, Cabinet Office;

Committee for Standards in Public Life, Cabinet Office;

Advisory, Conciliation and Arbitration Service, Department for Business, Innovation and Skills;

Industrial Development Advisory Board, Department for Business, Innovation and Skills;

Treasure Valuation Committee, Department for Culture, Media and Sport;

Reviewing Committee on the Export of Works of Art, Department for Culture, Media and Sport;

Independent Agricultural Appeals Panel, Department for the Environment, Food and Rural Affairs;

High Speed 2, Department for Transport;

Industrial Injuries Advisory Council, Department for Work and Pensions;

Fuel Poverty Advisory Group, Department of Energy and Climate Change;

Committee on Radioactive Waste Management, Department of Energy and Climate Change;

Foreign Compensation Commission, Foreign and Commonwealth Office;

Advisory Committee on the Design of Coins, Medals and Decorations, HM Treasury;

Migration Advisory Committee, Home Office;

Technical Advisory Board, Home Office;

Veterans Advisory and Pensions Committees, Ministry of Defence;

Central Advisory Committee on Pensions and Compensation, Ministry of Defence;

National Employer Advisory Board, Ministry of Defence; and

Legal Services Board, Ministry of Justice;

Triennial reviews will be based on the success of the methodology applied during the 2010 review of public bodies which looked at whether a function was required and, if it was, whether it should exist at arm’s length from Government. Quangos will be required to meet one or more of the three tests listed above.

Triennial reviews will build on this methodology by including a further stage to examine whether the body’s control and governance arrangements continue to meet the recognised principles of good corporate governance. As well as an opportunity for continuous improvement the reviews will help departments consider new and more innovative models for delivering services through public bodies.

Once the first tranche of reforms have been delivered, and the process of ongoing triennial reviews is firmly established, the UK public bodies landscape will look radically different and be substantially smaller. We will ultimately have reformed more than half of the 904 public bodies in scope of the 2010 review and the landscape will contain more than 250 fewer public bodies. The landscape will be more accountable, with Ministers taking strategic policy decisions and controlling core costs and releasing the front line to deliver services. Public bodies will no longer be seen as confusing, distant and impenetrable to the public, and Ministers will be clearly and transparently accountable for decisions that should be taken by elected representatives.

The landscape will be smaller, more efficient and will cost less, offering better value for money to the public. Our reforms will also help to realise a power shift away from Whitehall, placing control of the delivery of public services in the hands of people who use them, and contributing to important reforms in health, education and economic growth. Unlike previous attempts to reform the public bodies landscape, our reforms will ensure that public bodies will no longer operate long after their job is complete or continue in a form that is outdated or inefficient. I believe that these reforms will lead to a permanent, and long overdue, shift in the role of public bodies and much clearer lines of accountability.