Public Bodies Reform
Lord Maude of Horsham Excerpts(13 years, 7 months ago)
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The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)
The coalition Government are committed to review public bodies, with the aim of increasing accountability for actions carried out on behalf of the state. Today I am placing in the Library of the House my proposals for the reform of public bodies, which summarises previous announcements and adds further proposals. Copies will also be available in the Vote Office. In addition, I will make an oral statement to the House today.
The landscape for public bodies needs radical reform to increase transparency and accountability, to cut out duplication of activity, and to discontinue activities which are simply no longer needed.
This public expect Ministers to take responsibility for what the Government do, and not leave this to people or bodies that are unelected. In the past, too many public bodies have been established without proper thought, and allowed to remain when their mission has long been accomplished. This has meant that elected politicians have been able to avoid making difficult and tough decisions. This is a direct challenge to accountability and is contrary to openness and transparency in public services that this Government seek to achieve.
So the Government’s presumption is 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 my review has subjected all existing public bodies. These tests are:
Does it perform a technical function?
Do its activities require political impartiality?
Does it need to act independently to establish facts?
This is a work in progress. A number of changes have already been announced. A number of bodies remain under consideration, with reviews still under way. All remaining public bodies will be subject to a rigorous triennial review to ensure that the previous pattern of public bodies often outliving the purpose for which they were established is not repeated.
All the changes proposed here will be delivered within Departments’ spending review settlements. Those bodies whose status is being retained may be subject to further reforms following the spending review, in the same way as all other parts of the public sector.
My review process has covered 679 HM Government’s non-departmental public bodies (NDPBs), as well as 222 other statutory bodies such as some non-ministerial Departments and some public corporations. Substantial reforms are proposed for over half of these bodies 481. The Government propose that 192 will cease to be public bodies. Where it is clear that a public body has accomplished its mission and no longer needs to exist, it will be abolished. This will be through moving it within a Government Department, where a Minister will be accountable for its activities, into local government, or into the charity or private sectors, or ceasing their work altogether. Some 118 would be merged down into 57 bodies, removing wasteful and complicating duplication of effort. Some 171 are proposed for substantial reform while retaining their current status.
Many public bodies will be retained and will remain at arm’s length from Government. They will be expected to become more open, accountable and efficient. Non-departmental bodies which are being retained will be subject to a new framework and triennial review process, on which I will bring forward proposals in the new year.
I want to acknowledge the dedication and hard work of those who work in public bodies. We are committed to working with chairs and chief executives of these bodies to ensure that change is conducted as fairly and smoothly as possible.
To enable these proposed changes, the Government will shortly introduce a Public Bodies Bill, which will give Ministers power to make changes to named statutory bodies. Other forthcoming legislation, such as the Education Bill and the Localism Bill will also be used to make changes directly.
I believe that these reforms will increase accountability in public life, while making savings and driving out inefficiency and waste.
Superannuation Bill
Lord Maude of Horsham Excerpts(13 years, 7 months ago)
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The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)
I beg to move, That the clause be read a Second time.
Mr Speaker
With this it will be convenient to take the following:
Amendment 4, page 1, line 1, leave out clause 1.
Amendment 3, in clause 2, page 3, line 14, at beginning insert ‘Subject to subsection (2A),’.
Amendment 2, page 3, line 14, at end insert—
‘(2A) Section 1 shall not come into force until the Minister has laid a report stating that the affected members of the relevant trade unions under section 2(3) of the Superannuation Act 1972 have given their approval by means of ballots to the terms of section 1, and the House of Commons has come to a Resolution on a Motion in the name of a Minister of the Crown approving the report.’.
Amendment 5, in title, leave out from ‘provision’ to end and insert
‘modifying the effect of section 2 (3) of the Superannuation Act 1972 for benefits to be provided by way of compensation to or in respect of persons who suffer loss of office or employment.’.
Government amendment 1.
Mr Maude
In my statement to the House in July and again on Second Reading in September, I made it clear the Government’s intention is to make the civil service compensation scheme affordable, and I set out our intention to legislate to underpin the negotiations to achieve that. However, I have made it clear at all stages—and I make it clear again today—that our principal aim has been to reach a negotiated settlement with all six civil service unions to introduce a new successor scheme that would provide, in particular, better protection for lower-paid civil servants.
The current civil service compensation scheme is unaffordable and completely out of kilter with practice in the rest of the public sector, let alone in the private sector, and it actually makes more likely redundancies among the lowest paid and shortest-tenured civil servants. The previous Government recognised that and engaged in protracted negotiations over many months—indeed, over several years—with the Council of Civil Service Unions to try to reach agreement on a successor scheme. I pay tribute today, as I did on the previous occasion, to the right hon. Member for Dulwich and West Norwood (Tessa Jowell) and her predecessors, who persisted in trying to get full agreement from all members of the Council of Civil Service Unions.
Despite those months of negotiations, the previous Government were unable to achieve full agreement. I understand that it looked as though an agreement was there, but at the last minute the PCS—the Public and Commercial Services Union, the largest of the civil service unions—pulled out, leaving a proposed new scheme in place that had been agreed by five unions, but not by the sixth.
Given the extensive consultations and negotiations that took place, which gained agreement from five out of the six unions, the previous Government felt and concluded—I said at the time that I agreed—that it was only right that one union should not hold the right of veto on any change. So in April the previous Government imposed a new compensation scheme that reflected the agreement with the five unions. But for the action of the PCS, that might have been where the story ended, but the subsequent actions of the PCS have led us to where we are today.
The PCS challenged in the High Court the right of the Government to impose a settlement in such circumstances and the Court subsequently quashed the February scheme. So almost literally on my first day in office after the election, I was confronted with a situation in which the previous civil service compensation scheme was still in force and had not been reformed at all. That scheme, as I have said, is completely unaffordable, inherently unfair and in urgent need of reform. It was striking that on Second Reading, when this issue was extensively and thoroughly debated in a constructive and open spirit with no element of partisanship creeping in, every Member who spoke agreed that the current scheme was unsustainable and needed reform. There was complete consensus across the House.
The current compensation scheme is extremely generous compared with the rest of the public sector, let alone private sector, equivalents. A comparison with the statutory redundancy scheme shows that payouts, particularly for lower-paid workers in the private sector, are capped at 32 weeks’ pay at a maximum weekly pay that is still, I think, capped at £380. The maximum that can be paid out to anyone under that scheme is less than £12,000. By contrast, the maximum value under the civil service scheme is the equivalent of six years and eight months’ salary. Typical schemes in the private sector—particularly the statutory scheme—pay one week’s salary for each year worked. The civil service scheme pays at least four times that amount—a month’s salary for each year worked, and in some cases up to three months’ salary for each year of service.
The previous Government spent £1.8 billion on civil service redundancy payouts in the last three years, including a number of spectacular six-figure settlements for individuals. The result of the scheme’s being so generous and unaffordable is that Departments cannot afford to make civil servants redundant, even if they are willing to go voluntarily, if they are highly paid and of long tenure. If Departments need to save money—as they had to under the previous Government and as they will have to under the coalition Government—through redundancies, they simply cannot afford to choose those individuals on high pay and long tenure. In order to make the same savings in salary terms, they need to make many more lower-paid and shorter-tenured staff redundant. The unjust effect of the current scheme’s being so badly structured and unsustainable is that if it were allowed to remain in place, more civil servants would lose their jobs and more civil servants on lower pay would lose their jobs. The coalition Government are not willing to see that happen.
Stewart Hosie (Dundee East) (SNP)
I understand the logic of the Minister’s argument, but I have a constituent who has a business case for her to take early retirement under the voluntary scheme—I have seen the business case, which will save a great deal of money over the next few years. She is not being allowed to go now because of the uncertainty surrounding this process. Do we not have a little disconnect at the moment in that this process and this Bill are stopping people leaving early when it suits them and would save money right now for that Department?
Mr Maude
Depending on what the House decides today, some of that uncertainty should be removed. I want Parliament to be able to move quickly to enable the new scheme to be put in place, because it will provide certainty. I absolutely understand the uncertainty that exists for many dedicated, hard-working public servants who know that there might not be a future for them because of the situation—because, frankly, of the previous Government’s legacy of the fiscal deficit—and it is really unfair to leave people in limbo and with that kind of uncertainty. I want us to achieve the greatest certainty at the earliest time so that people know where they stand and so that Departments and agencies that have to make redundancies can go ahead with them and enable people to make the break and start the next phase of their lives.
The caps contained in the Bill are, as I said on Second Reading, a blunt instrument that will immediately limit the amount that can be paid to any individual. Those caps were never intended to be a long-term solution. It is and has always been our absolute priority to create a scheme that is affordable but that provides protection for the lower-paid. However, those protections are complicated to engineer and we felt—I do not resile from this at all—that it is incredibly important to consult thoroughly and to discuss properly how those protections should be configured. The discussions with the unions have been very productive and have led to the scheme, which I shall describe, being configured.
Jack Dromey (Birmingham, Erdington) (Lab)
Widespread concern has been expressed throughout the House about the impact of the Bill on hundreds of thousands of civil servants. I welcome the fact that the Government have improved the offer to the civil service, but that offer is not as generous as what was on offer in February and agreement has yet to be reached. Will the Minister agree personally to meet the six unions concerned to try to achieve a negotiated solution? Negotiation has to be better than the blunt instrument that will impose serious changes for the worse to the employment contracts of, for example, defence civilians in the Ministry of Defence who are serving in support of our forces in Afghanistan right now. That instrument will establish a chilling precedent for the future and it is worrying all public servants. Will he make one final effort before the Bill becomes law?
Mr Maude
Absolutely and unequivocally, yes. I shall talk a little about the process we have been through and where we are in the negotiations. I say clearly to the hon. Gentleman and to the House that if it is at all possible to achieve a fully negotiated settlement that is affordable and fair to the taxpayer and that meets the concerns of all the unions, we will certainly try to achieve such an agreement with all six unions. I shall say a little more about that in a while, but the answer is definitively yes.
John Hemming (Birmingham, Yardley) (LD)
In Committee, the hon. Member for Birmingham, Erdington (Jack Dromey) made some good points about individual exceptions in which even the terms proposed in the negotiations with the trade unions might be unfair to individuals who have been through particular hardship. Does the Minister agree that that can be resolved only through negotiation and that aiming to resolve it through legislation would be a mistake?
Mr Maude
My hon. Friend is completely right: there has to be flexibility. That is why I have always said that the caps imposed by the Bill are not right for a permanent system because they do not provide that flexibility. The scheme that has been brokered between the negotiators for five of the unions would provide much greater flexibility and would, I think, meet the concerns that he raises.
John Hemming
Also in Committee, Dusty Amroliwala, the civil servant responsible for handling the scheme, said that he would have advised any Government to take that approach to break the legislative logjam. He also said that there had been no estimates of what the Bill would save because there was no expectation that what it proposed would be the end result. In that sense, does the Minister agree that this is part of the process of breaking the legislative logjam?
Mr Maude
Yes, indeed. If the result of the process that we have been through with the Bill is that it makes a negotiated settlement more likely, that will be extremely beneficial. I do not want the outcome of all this to be that the existing scheme remains in place with the crude caps that the Bill imports. What we want is a new, successor scheme, and there is now a serious prospect of that being achieved. If it can be achieved with the support and agreement of all six civil service unions, no one will be more delighted than I. However, if we have to go down the path of having a new scheme that is supported by fewer unions, that would still be better because it would mean that many of the concerns that have been raised would be met better than by the Bill. That would be infinitely better than the current scheme remaining in place, as it is simply unaffordable and unsustainable, as the previous Government openly accepted.
Elizabeth Truss (South West Norfolk) (Con)
In response to the points raised by Opposition Members regarding the difference between the deal that was done by the previous Government and deal being done now, how would the impact on low-income workers in the civil service differ?
Mr Maude
If my hon. Friend will allow me I shall come to that later, because I want to talk in a little more detail about the terms of the scheme that has been brokered by the negotiators for five of the unions.
I repeat that we want a long-term negotiated successor scheme. We want a package of reform that provides genuine protection for lower-paid civil servants, that caps the total amount that can be paid out, that provides protection for those closest to retirement and that reforms the accrual rates. It takes time to negotiate such a scheme and it has been a very intensive process. That is why the caps were put in place in the Bill—as a safeguard to ensure that if agreement could not be reached, we could at least limit the payouts in the short term. I have always been hopeful that we could reach agreement with all six unions by the time the Bill reached Report.
After the intensive negotiations throughout the summer, we reached an impasse. The same five unions that agreed the February deal with the right hon. Member for Dulwich and West Norwood came together once again and put to me concrete proposals for reform. Sadly, the PCS refused to join them in that approach. That was disappointing, but I made it clear to the PCS that it was welcome back at any stage if it was willing to put forward concrete proposals, and I wrote to Mark Serwotka, the general secretary, to that effect. In the meantime, my officials and I engaged productively with the remaining five unions to attempt to reach agreement. Last week, all five union negotiators, representing Unite, GMB, Prospect, the First Division Association and the Prison Officers Association, agreed terms with us that they were prepared to recommend to their executives. The terms of that agreement represent a reasonable outcome for everyone involved and deliver on our objectives of being fair, affordable and sustainable.
It is worth dwelling a little on the terms of the agreement. We reached agreement on a standard tariff in which each year of service would provide one month’s salary in the event of redundancy. That compares with one week’s salary for every year of service under the statutory redundancy scheme. The tariff would be capped at 12 months for compulsory redundancy and at 21 months for voluntary redundancy. All civil servants being made redundant would be entitled to a three-month notice period. That is in contrast to a cap, in some circumstances, of well over six years’ pay—six and two-thirds years—and paying up to three months’ pay for every year of service, as is the case currently. It contrasts with the current situation of having a six-month notice period for all compulsory redundancies, but no equivalent notice period for voluntary redundancies. The new scheme will be simpler, fairer and more affordable.
We also agreed on significant protection for lower-paid civil servants. Under the terms of the scheme, any civil servant on a full-time equivalent salary of less than £23,000 who was made redundant would be deemed to earn £23,000 when their redundancy payment was calculated. So for someone earning £13,000 in those circumstances, the multiplier by which the number of years would be multiplied to calculate the redundancy payment would be deemed to be £23,000. For the very lowest paid in the civil service, that is significant additional protection and, I have to say, better protection for the lowest paid than the February scheme. I say again that that would be a permanent feature of the scheme, not a transitional feature of it. It would be in place for all time, or for all time until some subsequent Government chose to revisit it.
Conversely, staff earning more than six times the private sector median average earnings, which is around £150,000, would have their salary capped at that figure for the purpose of calculating their redundancy payment. That would be an end to the mega-payouts, which have been highlighted in a national newspaper recently and which cause a certain amount of offence to taxpayers.
We also agreed on protection for staff who have reached the minimum pension age of 50, allowing them to opt for early retirement when they leave, in return for surrendering the appropriate amount of any redundancy payment. Again I stress to the House that under this proposal that will be a permanent feature of the scheme, whereas in the February scheme, which the right hon. Member for Dulwich and West Norwood attempted to impose, it was framed as a transitional arrangement that would run out over time.
I believe that that is a fair deal for civil servants and for taxpayers. Given that we had agreement from five of the six union negotiators on the terms of the new scheme, I therefore proposed an amendment—the new clause that we are now discussing—to allow the Government to impose that scheme, which is a power that the Government thought they had and used when the right hon. Lady was in office, but which was subsequently struck down by the High Court.
I want to make it absolutely clear that there will be an obligation for the Government to consult properly before any scheme is imposed. I believe that that obligation already exists in section 1(3) of the Superannuation Act 1972, but lest there be any doubt, I undertake that we will introduce a further amendment in the other place to put the matter beyond doubt. In the intervening period, I shall want to discuss with the right hon. Lady and with the unions how we can frame that measure in a way that gives the necessary comfort that this is a serious process. That commitment is there. There is already in the existing Act an obligation to consult the unions. It is not framed in quite that way, but that is the effect of it. We shall introduce further amendments if they are regarded collectively, by us all, to be necessary to put the matter absolutely beyond doubt.
I want now to make it absolutely clear what the new clause does. It does not create any unprecedented power for me that has not been available to my predecessors. It simply recreates precisely the power that the right hon. Lady had when she imposed the February scheme. It does not go one whit beyond that. It is rigorously framed so that it goes no further at all than the power in the original Act, on the basis of which the right hon. Lady—in good faith, and with our full support—acted before the election.
Let me say a word about the PCS. I have no wish at all to exclude the PCS from the negotiations. Late last week, the leadership of the PCS came back to me and indicated that they would like to return to the negotiating table. I welcome that and have told them that I am looking forward to seeing their proposals. The other five unions have been making constructive proposals for some little time now, and those suggestions have formed the basis of the proposed new scheme brokered and agreed by the negotiators for those five unions. I have stressed to the PCS that any changes to the proposed scheme cannot exceed the cost envelope of the scheme already agreed, and that any changes must be agreed with the other unions, which have already worked hard to reach this agreement.
May I say a word about the Opposition amendments, which have been grouped with the Government new clause and amendment? The Opposition amendments would effectively invalidate the effect of the Bill, as they would remove the caps, which are the essence of the Bill. There is nothing more to say about that. On Second Reading, I set out the reasons for having the Bill at all, and I have reiterated them today. I say again that no one would be more happy than I would if, the day after Royal Assent is given to the Bill, should it get that far, I am able to put those provisions into abeyance; I do not want us to be in a position whereby those caps are what applies in practice. I want there to be a new scheme—ideally agreed by six unions, but if not, agreed by as many as possible, and imposed using the powers that the right hon. Lady herself used, which the Government new clause will put into effect and allow to be used.
I earnestly hope that a successfully negotiated new scheme agreed by all six unions will follow from today’s debate. I stress that I remain completely committed to achieving that. If we can achieve it, neither the caps in the Bill nor the power contained in the new clause will be needed, but if there were no such agreement, it would be wrong for the PCS to be able to veto any changes to the current scheme, because that scheme has been universally agreed in the House to be unsustainable. This amendment will simply put the current Government in the same position as the previous Government—committed to consultation and to negotiation, but able, in the end, to decide. I commend it to the House.
Tessa Jowell (Dulwich and West Norwood) (Lab)
I shall speak against Government new clause 1 and in favour of the amendments standing in my name and that of my right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins). I give notice that I intend press amendment 4 to a Division, subject to your will, Mr Speaker.
I also want to put on record my appreciation of the conciliatory tone in which the Minister has addressed the House today and note what I think was very constructive scrutiny of the Bill in Committee, which gave the opportunity to hear witnesses.
I would like to identify the common ground that we share, but also what still divides us. We agree that the civil service compensation scheme is in need of reform—as the Minister observed, I spent many hours trying to secure that reform—but it is also important that new legislation take account of the conclusions of the judicial review. It is important, too, that that is done in the right way, giving the 500,000 or so civil servants who are liable to be affected the confidence that the process will be fair and that the fairness of that process is institutional.
The legislation represents very high stakes for the 500,000 or so civil servants whose lives stand to be directly affected by its provisions. The Bill is not simply a blunt instrument for negotiating purposes. For those 500,000 civil servants, it could be a matter of their keeping their home, helping their children through university or averting financial hardship while they look for a new job. We heard eloquent evidence of that anxiety from witnesses who appeared before the Public Bill Committee.
To summarise, we have two central problems with the Government’s position on the Bill. The first problem, as we argued from the outset on Second Reading, is with the unacceptable caps set out in clause 1. Our amendment 4 is intended to deal with that. The second is the unbridled powers that the Government are seeking to impose on any new scheme that fails to secure a negotiated agreement. We will take every step we can to insist that a requirement for consultation and due process appears in the Bill.
Tessa Jowell
I accept that only in part, in that the scheme set out in the Bill, with the caps, is substantially less generous than the scheme that we negotiated with the trade unions only a few months ago.
Mr Maude
I am not talking about the scheme; I am talking about the power in the new clause for the Government to impose a new scheme, which the right hon. Lady has just described as an unbridled power. I am asking her to agree what is certainly the case: that the power that the new clause would give to me is precisely the same power as she had and exercised when she held my job eight months ago.
Tessa Jowell
I shall make progress. Many Back Benchers want to speak in the debate and the hon. Gentleman will have a further opportunity.
We cannot support the Government new clause as drafted because it allows the Government to impose changes to the scheme at any point, without the contingent obligation to consult the work force or their representative trade unions.
Mr Maude
To be absolutely clear, the Superannuation Act states, at section 1(3):
“ Before making any scheme”—
this would refer to the schemes that we are discussing—
“under this section the Minister . . . shall consult with persons appearing to the Minister . . . to represent persons likely to be affected by the proposed scheme”.
So there is an explicit obligation in the 1972 Act to consult representatives of staff affected by any new scheme. That is absolutely explicit. It was the obligation that the right hon. Lady herself followed scrupulously when holding the job that I now hold, and it is the obligation that I absolutely undertake we have been following. If there is any doubt about it, we will make that even more explicit with an amendment tabled in the other place.
Tessa Jowell
I am grateful to the Minister for that clarification, but as nearly 30 years have passed since the Superannuation Act was introduced, both the terminology and the reference to the negotiating structure could be updated to make the two commitments clear—the right to impose in the absence of unanimity among the unions, but a right that is exercised only on the basis of clear, systematic, open and proper negotiation with the appropriate trade unions and work force representatives.
The other underlying issue is the lack of confidence in the process so far. The Bill was published before the civil service unions had even met the Minister or his officials. None of the work force had the opportunity, unlike during the negotiations that we undertook, to comment on the proposed reforms, despite the fact that they marked a significant and detrimental departure from the previous package. The obligation to consult the work force at every stage is missing from the Bill.
Given the powers that the Government have asked the House to grant them through the new clause, it is only right that safeguards be put in place to ensure a fair and reliable process whereby the work force have a right to be consulted, the Government are obliged to seek an agreement with the representative trade unions and the House is the arbiter of whether that process has been fair and transparent. If those safeguards had been put in place, we would have supported the Government and not sought to vote against the new clause.
We have outlined a very clear basis for our opposition to the proposed change, but we make it equally clear that if the Minister for the Cabinet Office seeks to introduce in the other place a revised amendment that addresses the judicial review and puts consultation and proper process in the Bill, we will support him. That is dependent on Mr Speaker taking his usual principled and pragmatic view and not judging the Bill to be a money Bill, which would eliminate the possibility of any such constructive amendment and scrutiny in another place.
Mr Maude
To be absolutely clear, I am advised that if the new clause were not agreed to and the Bill remained as drafted, it would be possible for Mr Speaker to exercise his discretion—and it is a discretion—and certify it as a money Bill. However, I am also advised that if the Bill were to include the new clause and amendment that I have tabled, the question of its being a money Bill would not even arise. So, if the House were to carry our proposed changes, there would be no question of the Bill’s continuing to be a money Bill for the purposes of the other place; it would go through the full and usual processes there.
Tessa Jowell
The Opposition would very much welcome full and further scrutiny, as the negotiations are ongoing.
The issue is about the right reforms, which we seek to put forward through our amendments 4 and 5, whose purpose is to strike out the arbitrary caps that the Government introduced at the start of the process. Those caps have led to an improved offer, as my hon. Friend the Member for Birmingham, Erdington (Jack Dromey) said, as a result of negotiation, and we welcome that. There is now an improved offer on the table, so we do not understand why the Government oppose our amendment. Given that new clause 1 would give them the power to impose any settlement, why have the caps, which have caused such distress and anxiety to civil servants, remained in the Bill?
We are pleased that the Government claim to have reached an agreement with at least some of the trade unions, and the Government have declared that that will supersede the terms before us. To echo the Minister’s language, I note that he has managed to introduce a “sharp instrument” to replace the “blunt” one, but that leads us to question why the Government persist in wanting those terms to remain in the legislation.
The caps are simply out of kilter with the subsequent agreement that the Minister claims to have reached. He, his colleagues and his officials have told us that he wants a negotiated settlement, and on both sides of the House the consensus is that that would be the right course of action. Instead, however, the Government want to proceed to impose the arbitrary caps that they sought to impose at the beginning of the process. For those reasons, we ask the House to oppose the Government’s proposed changes and to support our amendments 4 and 5.
John McDonnell
I meant 90% of the trade union members with whom the Government are negotiating.
May I tell the Minister what the POA has said about his words? Its general secretary Steve Gillan has said:
“I am annoyed that Mr Maude has leaked without prejudice discussions but I believe this has been deliberate in an attempt to drive a wedge between the POA and PCS. The POA will not allow him to do so.”
The Minister’s actions have meant that the union has now rejected the deal. Those actions were not responsible, and they were in contrast to the words of comfort that he has used here today and elsewhere in trying to engender a good industrial relations climate.
As my right hon. Friend the Member for Dulwich and West Norwood (Tessa Jowell) said, Members need to understand the strength of feeling among PCS, POA and other trade union members about the impact that the changes will have on their lives. We have had heart-rending cases submitted to us by people who have entered into mortgages, for example, believing that they had the security that even if they lost their job, they would have redundancy pay that would cover their mortgages. Now, they might lose their homes. We have heard of other people who were expecting significant compensation related to their salaries, one of whom would now lose £90,000 as a result of the Government’s proposals. No wonder people are angry and concerned. That is why they want their Government and their trade unions to come together to agree a fair way forward.
Mr Maude
With the leave of the House, Mr Deputy Speaker, I want to make one or two comments at the end of what has been a good discussion of Government new clause 1, Government amendment 1 and the amendments in the name of the right hon. Member for Dulwich and West Norwood (Tessa Jowell).
My first point is that the coalition Government earnestly hope to avoid redundancies. It is in our mind at all times that every job lost, whether in the public sector or elsewhere, represents a personal disaster for that individual and their family. All hon. Members should bear in mind that these are grave matters for a lot of hard-working, dedicated public servants. Everything that we do in government will bend towards trying to find ways to avoid redundancies in whatever way we can.
Sadly, because of the lamentable state of the public finances, which the coalition Government inherited from their predecessor, it is unrealistic to expect that there will be no redundancies. Our concern throughout the Bill is to ensure that the terms on which people are made redundant are fair to the individuals affected and to the taxpayer. The aim therefore must be, as I have said repeatedly, a secure and sustainable negotiated agreement with which all are willing to live.
The hon. Member for Hayes and Harlington (John McDonnell) has said that the PCS wishes to engage and believes that there should be serious negotiation—he is very close to that union—and I wholeheartedly endorse that approach. The negotiations, which I am bound to say have proceeded without the PCS, have been serious and constructive, and that they have been entered into in a spirit of good will. They may have been fractious from time to time, because these are difficult matters that make a great difference to a lot of people’s lives, but throughout the process, despite repeated invitations to do so, the PCS has not made constructive proposals.
Tessa Jowell
For the record, I think I have made the position absolutely clear. The Minister’s words were more of a debating game than a substantive discussion of policy. We oppose new clause 1, because it creates no specific obligation to consult. Removing the caps would remove the structure of a settlement that the Opposition believe is profoundly and fundamentally unfair. The settlement is substantially detrimental to 500,000 civil servants compared with our February 2010 scheme, which has been grossly misrepresented by Government Members.
Mr Maude
This is not a debating game. The Bill is deadly serious for hundreds of thousands of hard-working, dedicated public servants. The fact is that the right hon. Lady has today proposed removing everything—the ability to create caps on the existing scheme, which she says needs to be changed, and the Government’s ability to impose changes.
Let us look at what the right hon. Lady has argued on new clause 1. She accepts that my new clause is necessary and needed—both words that she has used at times to describe it—but she plans to vote against it on the grounds that it is, she says, an “unbridled power”. It is exactly the same power that she herself exercised earlier this year. Did she feel then that it was an unbridled power? Of course she did not, because there is already on the face of the Superannuation Act 1972 a clear and explicit obligation on the Minister to consult trade unions before imposing a scheme. Sadly, she seems to be unaware of that, so I am happy for the opportunity to enlighten her. She followed that obligation, and I undertake to follow it as well.
In the spirit of good will that has—broadly—dominated these deliberations, I have made a clear commitment that if further amendments are needed to make it clear in the Bill that proper consultation must take place before a scheme is imposed, they will be introduced in the other place. However, it must be recognised that as a “bridling” of this power—to adopt the right hon. Lady’s word—the legislation already contains an obligation to consult, and it has done so for nearly 40 years.
This new clause is necessary to give effect to a successor scheme to the current unsustainable, unaffordable and frankly unfair scheme, and the whole House accepts the need for that change. I stress again that it is the Government’s aim—we will strain every sinew towards it—to achieve a negotiated scheme that is supported by all six trade unions, in which case neither the caps nor this power will need to be exercised. However, to have any chance of reaching that point, it is necessary to reject the right hon. Lady’s amendments and to support the new clause.
Question put, That the clause be read a Second time.
Mr Maude
I beg to move, That the Bill be now read the Third time.
The Bill has been debated extensively on Second Reading and in the good deliberations in the Public Bill Committee. We canvassed the central issues again in the course of today’s discussions on the Government new clause and the Opposition amendments. I say again that we are dealing with matters of huge significance to large numbers of dedicated public servants, who are in a state of considerable uncertainty and anxiety about their futures, which I completely understand.
We wish to avoid redundancies wherever that is possible, because we recognise—as everyone in the House should—that every single job lost is a personal disaster for that person and their family. We will therefore do everything we can to avoid them, but where they are inevitable it is important that the terms on which civil servants become redundant are fair, both to the individual and to the taxpayer. That is what we are seeking to achieve. I say again that the Government will strain every nerve to achieve a negotiated new scheme that will make the caps imposed by the Bill unnecessary. That would also mean that the power reinstated by the Government’s new clause and amendment that have just been agreed—which simply reinstate a power that previously existed and that was exercised by the right hon. Member for Dulwich and West Norwood (Tessa Jowell)—would not need to be exercised.
The effect of the passing of the amendments and new clause is that the question of whether this is a money Bill no longer arises, so it will move on to the other place and undergo full scrutiny. As I have said, I undertake to introduce further amendments there to clarify and entrench, to the extent that that is needed, the obligation to consult before any new scheme is imposed. I will ensure that that happens and will discuss the content and format of such amendments with the right hon. Member for Dulwich and West Norwood and with the relevant unions.
The Bill remains as essential today as it was when I announced our intention to introduce it back in July. We have made huge progress since in configuring what a new replacement successor scheme would look like—sustainable, affordable and fair. On that basis, I commend the Bill to the House.
Government Efficiency Review
Lord Maude of Horsham Excerpts(13 years, 7 months ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)
On 13 August, Sir Philip Green was commissioned by the Prime Minister to conduct an external review of Government efficiency. Sir Philip submitted his findings and recommendations to the Chief Secretary of the Treasury and me on 7 October. We are grateful to Sir Philip and his team from Arcadia for the time and effort they have taken to produce their recommendations. Their findings clearly demonstrate the scale of inefficiency and waste present in the system today. It is clear that there is a huge opportunity and a real willingness on behalf of civil servants to take on the important task of delivering efficiency. We welcome the sense of urgency that Sir Philip has brought to this work and are looking at how we can best take forward key recommendations. The review will be placed on the Cabinet Office website.
Superannuation Bill
Lord Maude of Horsham Excerpts(13 years, 8 months ago)
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The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)
I beg to move, That the Bill be now read a Second time.
In a statement to the House on 6 July, I made clear the Government’s intention to make the civil service compensation scheme affordable and I set out our intention to legislate to underpin the negotiations about achieving that. I start by stating my unqualified support for the British civil service; I firmly believe that our system of a permanent civil service is one of the jewels of our constitution.
The service’s values of political impartiality, recruitment and advancement on merit, and the public service ethos are as much to be cherished and nurtured today as they ever were. The service is admired throughout the world for the way in which it serves the elected Government of the day. A steady stream of visitors from other countries send their civil servants to find out how it is done here. It is a pleasure, on returning to government—after an 18-year sabbatical, in my case—to discover that those virtues and values remain intact.
In the latter part of the last Parliament, I was pleased to support the previous Government’s actions in introducing, rather belatedly, it has to be said, civil service legislation—only 154 years after it was promised in the Northcote-Trevelyan report, but better late than never. That was an important step in ensuring the continuance of an impartial civil service.
I am also delighted to find that the service continues to attract the best and the brightest, with the civil service fast stream recognised as one of the most prestigious graduate programmes in the country. So the Bill is emphatically not an attack on the civil service: it is a necessary measure to deliver fairness and affordability in the appallingly challenging fiscal circumstances in which the last Government left Britain.
It might be helpful to the House if I set out some of the history and background to how we have got to where we are today. The history of compensation in the civil service is a long one, with the first legislation covering it having been passed more than 150 years ago. The ability of the state to pay compensation to civil servants on the loss of office was created under the Superannuation Act 1859. That Act did not create a right to compensation, but it created a framework under which such payments could be made. The Superannuation Act 1965 consolidated the previous Acts and included provision for the early payment of pensions to those aged 50 or over who were asked to take early retirement in the interests of efficiency. The same Act repeated the provision of an earlier Act that spelled out that civil servants had no legal entitlement or legal right to the benefits referred to in the 1965 Act, which was itself supplemented by an administrative code that set out the payments that a civil servant could expect, making it crystal clear that there was no entitlement to such benefits.
In the late 1960s and early 1970s, the Fulton committee reviewed the position of civil servants. Alongside that committee, the joint superannuation committee of the national Whitley Council was set up to review the provisions of the 1965 Act. It reported in 1972, noting that improvements were needed to the superannuation scheme
“to restore to the Civil Service the position it had traditionally held as one of the leaders in pension practice.”
That view was reflected in the Superannuation Act 1972, which granted civil servants rights to their pensions. In 1987, the compensation scheme was amended to its current form.
The previous Administration concluded that the current scheme was both unsustainable and indefensible. In the summer of 2008, with support from all parts of the House, Ministers embarked on lengthy negotiations to reform the compensation scheme. The right hon. Member for Dulwich and West Norwood (Tessa Jowell) was one of those Ministers. I think it is fair to say that those negotiations were very long drawn out and protracted. I pay tribute to the efforts of successive Ministers in trying to achieve an agreed outcome; they really did go the extra mile to try to achieve consensus. Arguably, they went too far, because the new scheme that was finally agreed in February this year was still out of kilter with most of the rest of the public sector and would have been unrecognisable, frankly, to anyone in the private sector.
The compromises that created what I still regard as a hard-to-defend scheme were made with the expectation that all six civil service trade unions present at the negotiations would agree it. That appeared to have been achieved, but sadly when the agreement was referred back to the leadership of the Public and Commercial Services Union—the biggest and most numerous union, representing very largely lower-paid civil servants—the rug was pulled from under the feet of the lead PCS negotiator and the agreement was rescinded. So after 18 months of tortuous negotiations, with perhaps an excess of flexibility on the part of the then Government, consensual reform of the scheme seemed as far away as ever. Ministers then took the view, correctly, that PCS’s last-minute volte-face could not be allowed to stand in the way of much-needed reform. Therefore, with the agreement of five out of the six unions, the right hon. Member for Dulwich and West Norwood laid the necessary order to give effect to the reformed scheme.
I have at all times made clear our view that the February scheme did not go far enough. Had it come into effect, however, when the coalition Government took office in May this year, a pressing case would have been made to let it remain in force. Sadly, that option simply did not exist. PCS unilaterally, and without the support of the other five trade unions, sought and obtained judicial review and obtained an order that quashed the February scheme. The option of allowing the scheme agreed and negotiated by the last Government was removed from the table by PCS’s unilateral action.
Steve McCabe (Birmingham, Selly Oak) (Lab)
Whatever the rights and wrongs of seeking judicial review, I am sure the Minister will accept that PCS represents some of the poorest-paid workers in the civil service. His scheme, rather than being fair, will be a lot less generous to them. Why is he introducing a scheme that gives the poorest-paid junior jobcentre official only as much protection as a head of Department in the civil service, when on 6 July he promised protection for the poorest- paid?
Mr Maude
I will come on to precisely that point, because the hon. Gentleman puts his finger on a real concern that I have. I will deal with it in detail later, if I may, because how to protect effectively the position of the lowest-paid in the civil service is a really important issue that will concern everyone in the House.
It is now more than 20 years since the last serious reform of the compensation scheme and more than two years since the current reform process began, with an unchanged set of arrangements still in place. Frankly, that position cannot be allowed to continue. The current scheme is unaffordable and unsustainable. It allows for payments of up to three times annual salary or, for older workers, enhancements to pension and lump sum payments costing more than five times salary. For some, those enhancements can total as much as six and two thirds times annual salary. That compares with a maximum of 30 weeks’ pay under the statutory redundancy scheme, with a weekly cap on the salary allowable of £380, giving a total of about £11,000.
The level of payments under the current scheme would be excessive even if we were not facing such a difficult financial situation. The last Government left the country with, in the immortal words of their last Chief Secretary to the Treasury, “no money left”. The Government are having to borrow a pound out of every four just to keep pensions paid and schools and hospitals functioning.
Dr John Pugh (Southport) (LD)
The Minister has mentioned that the scheme was last revised in 1972, but did not that revision leave all previously accrued rights in place? Is he not doing something different now?
Mr Maude
The extent to which rights are accrued is an issue to consider. We are talking not strictly about redundancy but about compensation for loss of office under a statutory scheme, and the relevant rights are those in force at the time when redundancy or loss of office happens. If the statutory redundancy scheme changes, the terms that govern the entitlement are those in place at the time when the redundancy happens. I understand my hon. Friend’s point, but I do not believe it applies in this case. I shall deal with that matter a little more in due course.
Our view is that to maintain the current scheme would be unfair as between taxpayers and civil servants and as between workers in the civil service and those in the private sector or the wider public sector. It is unfair also to less well-paid civil servants, which is related to exactly the point that the hon. Member for Birmingham, Selly Oak (Steve McCabe) made, with which I shall deal.
The effect of the current scheme is that it is prohibitively expensive to make redundant civil servants who are highly paid and long-serving. The result is therefore that when money has to be saved by reducing head count, the burden currently falls disproportionately on the lower-paid, more of whom lose their jobs than is necessary or desirable. My view is that lower-paid civil servants suffer disproportionately and are more likely to lose their jobs under the current scheme than would be the case under the arrangements that we are seeking to negotiate. In addition to the very simple cap incorporated in the Bill, we are seeking in parallel to negotiate different arrangements with significantly enhanced protection for lower-paid civil servants.
Steve McCabe
Let me say that I want to assume that the Minister’s long-term intentions are exactly as he says, but is it not a fact that under the Bill he will penalise, to an extraordinary degree, the poorest paid people in the civil service? That is the effect of the measure that he is asking us to vote for today.
Mr Maude
No. The effect of the legislation will be identical on all civil servants. Under the Bill, the cap would apply uniformly to civil servants. I shall come in a moment to the negotiations that are going on in parallel, because that will deal exactly with the hon. Gentleman’s point.
John Hemming (Birmingham, Yardley) (LD)
Obviously we do not want to make civil servants redundant. Does the Bill not make it less likely that lower-paid civil servants will lose their jobs, so in 10 years’ time they will still be employed within the civil service?
Mr Maude
My hon. Friend is exactly right and puts his finger on an important point. Because it is so disproportionately expensive under the current scheme to make redundant long-serving and high-paid civil servants, instead of one civil servant who earns 10 times the average—there are some—losing their job, 10 or more lower-paid civil servants might lose their jobs to save the same amount of money. We are seeking to address exactly that issue.
Mr Alan Reid (Argyll and Bute) (LD)
I, too, was pleased to hear the Minister say that the Government want a scheme that will be better for the lower-paid, but the Bill does not differentiate the lower and higher paid. Will the Government seek to amend it to allow better compensation for the lower-paid?
Mr Maude
It is not my intention to propose amendments of that nature, because in our view such arrangements are difficult to engineer—this is tricky stuff—and are not amenable to incorporation in primary legislation. Such matters should be negotiated. It is precisely for that reason that we are engaged in a parallel process of negotiation with the Council of Civil Service Unions, which I shall talk a little about in a moment, because we are seeking to achieve two things.
Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)
It is interesting to hear the Minister talking about parallel negotiations with the unions. Will he help me by explaining what negotiations, discussions or consultations there were with any of the civil service trade unions before the publication of the Bill?
Mr Maude
Negotiations were carried out by the previous Government over the 18 months before the order was laid, which, as I understand it, exhaustively explored all the options. I met the Council of Civil Service Unions before the election and immediately after. I have had several meetings with the council—at least two, I think—since, and I am proposing to meet the chairman later this week. There is a continual process of discussion and dialogue, which I regard as very important. I do not want the measure to be unilaterally imposed; I want a genuine consensual arrangement, whereby all six civil service unions agree to a new, sustainable and long-term scheme.
Richard Graham (Gloucester) (Con)
As my right hon. Friend knows, I am a former civil servant. I am very conscious of the large numbers of low-paid civil servants in this country. He and other hon. Members will know that on average, the UK civil servant receives no more than £24,000 a year, so there are issues of fairness. I give him my full support in taking forward in his negotiations with the various trade unions every possibility of increasing the statutory minimum available for low-paid civil servants. That will fulfil exactly one of the major tasks for the Bill: greater fairness in the system.
Mr Maude
I can reassure my hon. Friend that that is exactly our aim. It is one of the great myths—I have sometimes heard this expounded even in this august House—that all civil servants are highly paid. That is simply not the case. As he says, the average pay of the civil servant is, I believe, around £23,000, and half of civil servants are paid £21,000 or less. In the pecking order, as it were, of the different sectors, average pay is highest in the wider public sector, private sector pay is next, and civil service pay is the lowest. So my concern for lower-paid civil servants is real and genuine, and it is based on a proper understanding of the concerns that exist.
Mr David Hamilton (Midlothian) (Lab)
Is it not the case that many of the low-paid workers have accepted those low wages because of the conditions of employment, which included a pension scheme and superannuation scheme that meant something? To take that away from them takes away the very essence of why they are there.
Mr Maude
I hear what the hon. Gentleman says, and the fact is that in any employment the terms that apply are those that apply when an event happens. People get sick pay when they are sick; they get redundancy pay when they are made redundant. The statutory redundancy scheme, which has the force of law—as indeed this scheme does, as it is a statutory compensation scheme for loss of office—and the compensation to which people are entitled when they lose their office is that which is in force at the time. That is the view that the previous Government took, robustly, having considered—I presume—all the issues as carefully as we have done. So there is a strong view on both sides of the House that this scheme is unsustainable and unaffordable. Even in good circumstances it would be unaffordable, but in today’s tragically difficult financial position—with the budget deficit that we inherited so out of control and high—it would be indefensible to allow it to remain unreformed, as a matter of fairness.
Stewart Hosie (Dundee East) (SNP)
I was pleased when, a few moments ago, the Minister suggested that he did not want to impose this change unilaterally. Of course, that ties in with Mr Justice Sales’s comments that that might not be possible without agreement anyway. How confident is the Minister that agreement will be reached, perhaps before this legislation completes its passage?
Mr Maude
All I can say is that it would be rash to make predictions. I can express the hope and aspiration that agreement will be reached. I stand ready to meet the Council of Civil Service Unions at any time, and my officials are engaged in genuine and sustained negotiations and discussions with the unions, which are continuing on an almost daily basis. I have to say that I was discouraged this morning when Mark Serwotka, the general secretary of PCS—a man for whom I have considerable respect—said, when asked whether he would challenge the result in the courts again, that he would do so. That does not bode well for a consensual outcome, and the fact is that five of the six unions had agreed the previous scheme, but the rug was pulled by one union, to the disbenefit of everyone concerned.
I have made it clear that I do not see this Bill as the last word. It remains our desire to reform the scheme by negotiated agreement, so there have been significant and continuing discussions. There are two key goals in the negotiations. The first is to deliver additional protection for lower-paid civil servants, and that has to be done by negotiation—
Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab)
The Minister has said several times that he aims to protect the lower-paid, but I do not follow his argument. Under the current arrangements, someone who is earning £20,000 a year with 20 years’ service in the civil service would receive £60,000 in compensation. Under the February 2010 deal, proposed by the Labour Government, that individual would have received £58,000 in compensation. Under the present proposals, that civil servant would receive £20,000 compensation. Conversely, someone who is higher paid—for example, £40,000 a year—would receive £120,000 compensation under the current arrangements, given that three years is the maximum payment. Under the February 2010 deal, that amount would have been £60,000 because that was the cap, and under the present proposals it would be £40,000. Can the Minister please explain how the lower-paid will be protected?
Mr Deputy Speaker
Order. Before the Minister replies, may I point out that interventions should be short, with quick questions?
Mr Maude
The answer to the hon. Gentleman is, as I have said several times already, that this Bill is not the last word and that the additional protection for lower-paid workers has to be done by agreement. I do not want to be in a position where we design as if in some laboratory a complicated scheme to try to give protection for the lower paid, because the right way to do it is by proper negotiations and discussions with the unions—and that is exactly what is going on at the moment. As I said, that is the principal aim of the—
Mr Mark Williams (Ceredigion) (LD)
I am grateful to the Minister for giving way. I respect the sincerity with which he puts his case, and I also accept that the rightful place for the detailed discussions will be the negotiations with the unions. However, I think what the hon. Member for East Kilbride, Strathaven and Lesmahagow (Mr McCann) is looking for—and I am, too—is a little more detail on, and justification for, those words that the Minister uttered about protecting lower-paid workers. The anxiety out there is real, and the Minister needs to address that a bit more, if he can.
Mr Maude
I am reluctant to start conducting those negotiations in public. It would be regarded by the unions, which I think are engaged in good faith in these discussions—certainly, all the indications are that they are engaged in good faith in these private discussions in order to achieve an agreed outcome—as bad faith were we to start to explore them here. All I would say at this stage is that we completely and genuinely understand the need for additional protection for lower-paid workers, of whom there are many in the civil service, and we will seek to achieve that.
John Hemming
Does the Minister agree that the difficulty is that the Government need to act and cannot allow one of six trade unions simply to veto all changes, and that if the Government are therefore to put something through, they need negotiating room to offer something better in the negotiations? Obviously, this Bill will not be as good as a final deal that could be agreed with the trade unions.
Mr Maude
That is completely right. My hon. Friend puts his finger precisely on the point. Our view is that one union cannot be allowed to prevent necessary reform of a scheme that is unsustainable and unaffordable—and, of course, that is precisely the view taken by the last Government. The order laid by the right hon. Member for Dulwich and West Norwood, which came into effect, I think, in April this year—before it was rapidly quashed by the judicial review sought by the Public and Commercial Services Union—was made on the basis that one union could not be allowed to hold up the necessary process of reform. However, I stress again that we seek genuinely to negotiate additional protection for the lower paid.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
I have been listening to these exchanges closely, but will the Minister tell me whether I have understood him correctly? Is he saying that, whatever special measures may be made for the lower paid, which he is not prepared to discuss now for the reasons he outlined, he has no intention of trying to impose them through legislation, and that they will be negotiated come what may, but that this legislation might become necessary in order to provide the framework for such a settlement? Is that correct?
Mr Maude
Indeed. I will say more about the relationship between the negotiations and the Bill in a little while. The aim would be to have a whole new negotiated scheme that would make this Bill redundant. Sadly, however, the experience of the last Government shows that it is impossible to place absolute reliance on the ability to achieve total consensus on that. Proper additional protection for the lower paid is a central part of our aim in the negotiations. I will say briefly as well that the other side of that coin should be a cap on payments for the highest paid. Again, it seems to us that basic fairness requires that.
Our second goal in the negotiations is to negotiate a higher cap for voluntary redundancy schemes. It is the essence of most redundancy schemes that there should be scope for voluntary redundancy terms to be more generous than those for compulsory redundancy. However, I would like to make it clear, if it needs to be made clear, that no one wants redundancies at all, but if they are unavoidable, which sadly I believe they will be—they were under the last Government, and in the current fiscal environment, they are even more likely—it will surely be much better to be able to offer more generous voluntary redundancy terms. That is simply impossible under the current scheme, because of its unaffordably generous terms.
We have made some progress in the talks, but they have not yet delivered an approach that is agreeable to all the unions involved and to the Government. If we can secure agreement with the civil service unions to introduce a comprehensive new scheme, we will implement that package rapidly. Until we reach that point, however, we would be failing in our duty to the tax-paying public—and to lower-paid workers outside the civil service who daily confront much less generous terms—if we were to allow the excesses of the current scheme to continue unchecked.
That is why we have introduced a Bill to limit the size of compensation payments. It has only two clauses, which cap the amounts payable under the current scheme. The first creates caps on the level of payment possible. Staff who depart on voluntary terms will receive payments calculated under the current terms, but limited to a maximum of 15 months’ pay. For those leaving on being formally dismissed—effectively, compulsory redundancy—the limit will be 12 months’ pay. Where the civil service compensation scheme terms provide for early retirement instead of or in addition to a severance payment, the total value of the package will be subjected to the same cap of 12 or 15 months’ pay. In these cases, if the actuarially assessed cost of the total package exceeds the appropriate cap, the Bill provides that those individuals will instead receive 12 months’ salary—or 15 months’ salary in the case of voluntary departures—and no change to their pension entitlement.
Annette Brooke (Mid Dorset and North Poole) (LD)
Could the Minister please explain the rationale for proposing these particular terms, which are so much worse than those that were almost agreed before?
Mr Maude
My hon. Friend says that those terms were “almost agreed”, but that was far from being the case. In fact, one of the trade unions refused to agree to them, sought judicial review and had the agreement quashed. Given that one of the unions had refused to contemplate agreeing to the relatively modest—if we are honest—changes to the current scheme, it would be unrealistic to assume that we could then go back and say, “Oh, PCS, please feel completely differently, and please execute a rapid volte face from your position of a few months ago.” I take the view that the previous Government took, which is that the situation is not sustainable, and that one union cannot be allowed to stand in the way of necessary reform. That is why we have introduced the Bill, and why we are engaged in a concurrent process of negotiation, through which we genuinely want to achieve a long-term, sustainable settlement.
Mark Durkan (Foyle) (SDLP)
The Minister has stressed that five unions—not the PCS—had agreed to the arrangements in February. How many of the unions are in agreement with the framework that will be imposed by the Bill?
Mr Maude
Just to be clear, we are seeking to negotiate a new scheme, which would effectively make the terms in the Bill redundant. I make no bones about this: the Bill is a bit of a blunt instrument. It does not seek to create an entire, comprehensive new scheme. It simply imposes a cap on the amounts payable under the current scheme, so that it will be possible for the scheme to operate in a way that is fair to the taxpayer and to workers in other sectors outside the civil service. This is a complex process, and no one should be surprised that there is not instant agreement on a comprehensive new scheme. We are seeking to negotiate all the terms, but particularly those relating to additional protection for lower-paid workers and to a cap on what can be paid to the highest-paid workers.
Lindsay Roy (Glenrothes) (Lab)
Can the Minister explain the rationale behind giving preferential treatment to those who seek voluntary redundancy, as opposed to those who are forced to take a compulsory redundancy package?
Mr Maude
Almost by definition, if a compulsory scheme offered less work and better terms, no one would take up voluntary redundancy. Voluntary redundancy is better because it can be negotiated and a scheme can be fashioned to meet the precise circumstances of the employing organisation and the work force. It can be designed to be as sensitive as it can be to the particular needs of the situation. Obviously, if a compulsory scheme were more generous than a voluntary one, no one would ever take voluntary redundancy. It is of the essence of any redundancy scheme that voluntary terms should be capable of being more generous. That is why we framed the provision in this way and why part of what we are seeking to achieve in the negotiated comprehensive new scheme is to enable employers in the civil service to configure voluntary redundancy schemes that are more generous than the compulsory scheme.
Mr Maude
If this Bill progresses through the House, achieves Royal Assent and goes on to the statute book, it will come into effect, so the cap will apply as of the day of commencement. As I said, I hope that we achieve something frankly more grown up, more sustainable and more long term by having an agreed long-term comprehensive settlement. If both Houses of Parliament agree that the Bill should be passed, however, it will come into effect.
Mr Nigel Dodds (Belfast North) (DUP)
The Minister is generous in giving way. On numerous occasions, he has mentioned the issue of lower-paid civil servants. There is a great deal of anxiety out there about it and many of us have received representations in respect of it. How does he define “lower paid”? What is his definition of a lower-paid civil servant when it comes to these parallel negotiations?
Mr Maude
Well, that is one of the issues that is being negotiated. It can be defined in all sorts of different ways. It can be defined in terms of a proportion of the median salary or it can be defined by an absolute number, which would subsequently need to be updated from time to time. That is precisely one of the issues that is the subject of negotiations, and I hope we can make progress on it.
Mr Maude
I really have to make some progress and draw to a conclusion because Members of all parties wish to participate in the debate.
I emphasise that if the Bill comes into effect, it will affect only those staff issued with a notice of dismissal or in respect of whom a departure date was agreed after the legislation came into effect. Any civil servant already issued with a redundancy notice or who receives one before the Bill passes into law will not be affected by the restrictions it introduces. The first clause provides definitions to clarify who is covered by the compulsory cap and who is covered by the cap on voluntary departures. The second clause provides for the Bill’s effects to be time-limited. I stress again that we have no desire to see this legislation continue any longer than is absolutely necessary. The inclusion of a sunset provision prevents the legislation from continuing ever onwards. Instead, if we wish to renew it, the Government will be obliged to return to the House to seek approval by an affirmative resolution.
Alongside the provision for prolonging the effects of clause 1, there is also the option to bring forward the termination date. As I have already said, my intention is absolutely to resolve the issue by discussion and negotiation rather than by legislation, and I look forward to making the order that will repeal section 1 of the Act. It was disappointing, as I said earlier this morning, to hear Mark Serwotka, the general secretary of the PCS, pledge to return to the law courts to try to thwart further reform. That bodes ill for the chances of an agreed settlement, but we will strive—we will genuinely strive—to achieve that agreement. It is essential to deliver additional protection, which, I stress, is especially directed at members of Mr Serwotka’s own union. For the sake of his own members, as well as in the national interest and the interest of the taxpayer, I urge him to engage in the negotiations as wholeheartedly as the other five civil service trade unions.
I earnestly hope that a successful negotiation will render the Bill a dead letter before it even hits the statute book. That is my aim, and I will do all that I can to deliver it. In the meantime, however, the Bill is indispensable, and I commend it to the House.
Tessa Jowell (Dulwich and West Norwood) (Lab)
I beg to move an amendment, to leave out from “That” to the end of the Question and add:
“this House, whilst affirming its belief that civil service compensation should be reformed, declines to give a Second Reading to the Superannuation Bill because it provides inadequate protection for some of the lowest paid and longest serving public sector workers; believes that the reform proposals of February 2010 were fair, reasonable and non-age discriminatory, offering protection for the lowest paid workers whilst making substantial savings; and is strongly of the opinion that the publication of such a Bill should have been preceded by a full process of pre-legislative scrutiny of a draft Bill and in full consultation with Civil Service employees.”
I hope that the Minister has studied the amendment closely, because Labour Members believe that it holds the answers he seeks.
At the end of the last parliamentary session, the day before the Bill was published, the Minister declared that when it came to reform of civil service compensation, he wanted to negotiate an arrangement that had fairness built into it. Obviously we welcome that ambition, but we argue that as the negotiations have progressed and the detail of the Bill has become clear, he has failed to live up to his commitment.
The Minister says that he wants a fair settlement, but he has proposed reforms that are harsh, and harshest of all for some of the longest-serving, often low-paid, civil servants. The Minister says that he wants a negotiated settlement, but he has thrown out the progress made by the last Government through just such negotiations, and instead seeks to impose a short-term solution which lacks the legitimacy that comes from open and honest dialogue with the trade unions representing the people who will be affected by the reforms.
I welcome the Minister’s generous remarks, which were sincerely meant, about our nation’s public servants. I join him in recognising the important role that they play in our national life. However, I also argue that they deserve better than the proposals in the Bill. Public servants are too often represented as dead-weight on the taxpayer, as if they were somehow the cause of the deficit.
Tessa Jowell
That is also misguided, and we can have a further debate about it.
In fact, it is public servants who make our borders safe, help unemployed people back to work, run our courts and prisons, collect our taxes, and support our armed forces both at home and abroad, in Iraq and Afghanistan. With professionalism and integrity, they make the process of government work. The representations that I suspect we have all received in our constituency surgeries seek to make that point. It is being made by the people who provide those services, many of whom are members of the PCS but feel that their motives and their importance are being misrepresented.
Mr Maude
Let me make it absolutely clear that we do not blame public servants at all for the disgraceful budget deficit that the coalition Government inherited. Like Tony Blair, we blame the last Prime Minister, who as Chancellor and then as Prime Minister presided over an incontinent approach to the public finances.
Tessa Jowell
And let me make it absolutely clear that the Minister has grossly misrepresented the words of the former Prime Minister. Let me also remind him that the deficit arose because of a global financial crisis, and that it was our Government—led by the last Labour Prime Minister—who steered our economy at that stage, who, indeed, provided leadership for the world, and who drew our economy back from the brink of disaster. Let us have no more trivial point-scoring on that subject. I hope that during this debate we shall be able to move on from some of the crass misrepresentation of our country’s public servants and once more recognise the importance of their work, both public and private.
Tessa Jowell
I think that those at the higher earnings end and those at the lower earnings end are equally entitled to be apprehensive about the proposals.
Mr Maude
Let me make it absolutely clear that the point I was making is that, under the current scheme, lower-paid people are more likely to lose their jobs because it is so prohibitively expensive to make higher-paid, longer-serving senior officials redundant. As a result, more lower-paid civil servants get made redundant. The reform is therefore necessary for this reason alone: to protect the jobs of lower-paid workers.
Tessa Jowell
Well, let us see how that commitment plays out in practice. I entirely agree with the right hon. Gentleman that the people who work in job centres and at our borders often doing relatively low-paid jobs are the people who make those services happen at all, and I think there would be a marked degree of cross-party agreement about ensuring fairness and protection for such employees. We on the Opposition Benches, however, feel considerable scepticism about whether the proposals will deliver that.
Let me illustrate that and pick up on the point made by my hon. Friend the Member for Midlothian (Mr Hamilton). A member of staff earning less than £20,000 made compulsorily redundant after more than 20 years’ service would see their redundancy package more than halved under the provisions of the Bill; and staff covered by the civil service compensation scheme would receive substantially less in redundancy terms than comparable public sector employees, despite being among the lowest-paid public servants. The proposed cap is half that often seen in local government, education and the NHS.
On the question of protection for the lowest-paid, let me repeat the words used by the Minister in the House in July—he was right about this:
“Contrary to general belief, large numbers of civil servants are not very well paid—half of them earn £21,000 a year or less—and we want there to be extra protection for them.”—[Official Report, 14 July 2010; Vol. 513, c. 931-32.]
So say all of us, but the fact is that the Bill gives no confidence to those lower-paid employees.
Oral Answers to Questions
Lord Maude of Horsham Excerpts(13 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Katy Clark (North Ayrshire and Arran) (Lab)
1. What recent discussions he has had with trade union representatives on reform of the civil service compensation scheme.
The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)
I wrote to the chairman of the Council of Civil Service Unions immediately after making my statement to the House on 6 July. I have invited the unions to begin discussions with us on developing a sustainable and affordable long-term successor to the current civil service compensation scheme. I met the unions yesterday, and my officials have had further meetings with them.
Katy Clark
I thank the Minister for that answer. As he will appreciate, thousands of civil servants currently face losing their jobs as a result of this Government’s policies. Will such people be able to rely on their contractual terms?
Mr Maude
It is common ground that the current civil service compensation scheme is unaffordable. The hon. Lady’s own Government attempted to introduce a new scheme that introduced modest changes to the current scheme. That was agreed by five out of the six civil service unions, but sadly, the sixth did not agree, went to the High Court, and had it struck down. The result is that savings that had been scheduled to be made by the previous Government now cannot be made, so there is an additional cost. I have taken the view that it is not responsible to leave matters as they are. Nor is it fair to leave in limbo for ever people who know that there is, through no fault of their own, no job for them for the future, which has been the case for some time.
Mr John Leech (Manchester, Withington) (LD)
Does the Minister accept that any plans severely to restrict redundancy payments for hundreds of thousands of low-paid civil servants will be seen as a kick in the teeth for thousands of workers who have faced uncertainty about their jobs over the past few years, and who face uncertainty in the future?
Mr Maude
It is precisely for that reason that I want to engage quickly with the unions to negotiate additional protection for low-paid workers. Contrary to general belief, large numbers of civil servants are not very well paid—half of them earn £21,000 a year or less—and we want there to be extra protection for them. I want to engage as quickly as possible with the unions to negotiate an arrangement that has not only fairness but accountability built into it.
Paul Goggins (Wythenshawe and Sale East) (Lab)
Last week, the Minister said that his proposals may not have been necessary if the Public and Commercial Services Union had joined the other five trade unions in agreeing to the previous Government’s reform package. That being so, will he start his negotiations with that package, which would have saved £500 million over three years and protected the lowest paid?
Mr Maude
As I say, we are very keen to have proper protection for the lowest-paid workers. Had that scheme been in existence when the coalition Government came into office, a pressing case would have been made to leave it as it was and work on that basis. That option is no longer on the table, so it seemed to us right to look at a scheme that is sustainable for the long term. The previous revised scheme made only relatively modest changes, and it was still way out of kilter with anything available under the statutory redundancy scheme or, indeed, throughout most of the private sector.
Paul Goggins
I am grateful for that answer. However, it is hard to take the Minister seriously about these negotiations when after all the press speculation, and more than a week after he sent his letter to the trade unions, the 600,000 staff who are affected still have no details of what he is proposing other than the threat of a 12-month cap on redundancy payments to all staff. Why should the lowest-paid staff—the junior official in a jobcentre—be treated in exactly the same way as the permanent secretary of a Government Department?
Mr Maude
It is precisely my intention that that should not be the case. That is why I want to engage with the unions quickly to develop a scheme that protects the lowest paid. It is quite a complicated thing to do—it is not capable of being done in the course of a Bill—so we need to negotiate it. I want to ensure that it works and is effective in providing fairness, but is also affordable. I hope that we can engage with this as soon as possible. I have made it clear to the unions that it is our intention not only to negotiate on the ceiling that is available for voluntary redundancy schemes but to provide protection for the lower paid.
Amber Rudd (Hastings and Rye) (Con)
2. What plans he has to review arrangements for the use of consultants for Government projects.
The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)
In May, we announced an immediate freeze on the use of consultants. Where there is an operational necessity and the work cannot be carried out by in-house staff, any new consultancy spend above £20,000 a month must be signed off by a Minister. In addition, all consultancy spend, whether pre-existing or newly approved, must be re-approved on a rolling basis every three months. Processes are now in place whereby both my right hon. Friend the Chief Secretary and I must personally approve any request to employ a consultant beyond nine months.
Amber Rudd
I thank my right hon. Friend for that answer. Has he considered the fact that by reducing the use of consultants, we will be able to help public servants to develop their own careers more successfully, and that that will have the added advantage of protecting jobs, because we can keep the work with them rather than putting it out to consultants?
Mr Maude
My hon. Friend makes a very good point. The excessive use of consultants—we discovered that there were 2,500 consultants embedded in Whitehall across Government—is not only expensive and a wasteful use of money but demoralising for mainstream civil servants, who feel that they are undervalued. By cutting back on the use of consultants we can begin to re-equip the mainstream civil service with the professional skills that it wants.
Chris Leslie (Nottingham East) (Lab/Co-op)
Can the Minister assure the House that the Government will not employ any consultants at all on the experimental free market schools strategy at the Department for Education? I am sure I heard a rumour that the Government had paid half a million pounds to the New Schools Network.
Mr Maude
I can assure the hon. Gentleman that if there are any consultants being used, that will have been signed off personally by a Minister in the Department for Education and will be made public online shortly. He should address his question to my colleagues in that Department and scan the website for notification.
Fiona Bruce (Congleton) (Con)
3. What plans he has to reduce the regulatory burden on the voluntary and community sectors.
Mr Christopher Chope (Christchurch) (Con)
5. What recent representations he has received from trade unions on proposed changes to the terms and conditions of employment of civil servants.
The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)
I met the Council of Civil Service Unions yesterday. The main issue discussed was the proposed changes to the civil service compensation scheme, which I covered in my reply to the hon. Member for North Ayrshire and Arran (Katy Clark).
Mr Chope
Did my right hon. Friend discuss yesterday a subject of great public concern: civil servants on average have higher pay, get better pensions, work shorter hours and have longer holidays than their private sector counterparts, and they also have lower productivity? What are the Government doing about that?
Mr Maude
Public sector productivity generally fell in absolute terms in the past 12 years, whereas private sector productivity rose by between 20 and 30%. There is therefore a problem with productivity in the public sector. However, I must tell my hon. Friend that median pay in the civil service is lower than that in the private sector, but pay in the wider public sector is higher.
Mr George Howarth (Knowsley) (Lab)
Does the Minister think that a career in public service is a good thing?
Mr Mark Spencer (Sherwood) (Con)
6. What plans he has to support the voluntary sector.
Richard Ottaway (Croydon South) (Con)
8. What efficiency savings have been identified by his Department’s efficiency and reform group.
The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)
We have identified significant scope for efficiency savings through a variety of means, including moratoriums on information and communications technology spending of more than £1 million, on consultants costing more than £20,000 a month, on advertising and marketing spend, on new websites and on new or renewed property leases. Other means include a freeze on recruitment, the procurement of goods and services for the whole Government using our aggregated scale to drive down prices, removing discrepancies such as the variation of 170% in the cost of a standard computer monitor, and renegotiating with the Government’s biggest suppliers on a portfolio basis to take out excessive cost. I met the 20 biggest suppliers to the Government last week to kick that process off. That is just the beginning; there is much more to do.
Richard Ottaway
In the light of that important answer, does my right hon. Friend remember the pledge given in 2006 by the previous Government to reduce dramatically the 794 websites that they ran at that time? Accordingly, was he as astonished as I was to discover just a few weeks ago that the number of websites had actually grown to 820? What is he doing to reduce that inefficient use of public resources?
Mr Maude
My hon. Friend is completely right that the result of the previous Government’s attempt to cut the number of websites was actually a significant increase. We will take urgent steps to cut the number of websites, particularly in relation to those that compete with each other. I discovered that the Department of Energy and Climate Change was bidding against the Carbon Trust for spots on Google, which is one indication of the lack of discipline in that field.
Paul Goggins (Wythenshawe and Sale East) (Lab)
Has the efficiency and reform group made an assessment of the Government’s programme for converting 800 schools into academies at a cost of £495 million over the next four years? In particular, has the group formed a view on whether that represents good value for money when set against the loss of hundreds of new school buildings following the cancellation of the Building Schools for the Future programme?
Mr Maude
That was a very good effort from the right hon. Gentleman, but we believe that the coalition’s programme to increase the number of academies is very valuable. It is part of the process of giving much more power to parents, and of giving the schools that are available for local people the ability to reflect what they want rather than what central planners dictate.
Graham Evans (Weaver Vale) (Con)
10. What progress has been made in setting up a national citizen service.
Julian Smith (Skipton and Ripon) (Con)
13. What progress he has made in establishing a national citizen service.
The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)
The coalition Government are committed to introducing a national citizen service to give young people an opportunity to develop the skills needed to be active and responsible citizens, mix with people from different backgrounds and get involved in their communities in order to promote engagement, cohesion and responsibility. Details of this programme will be announced by the Cabinet Office later this year, with a launch expected in 2011.
Graham Evans
The national citizen service will provide a vital outlet, especially for disadvantaged young people in my constituency of Weaver Vale. How can we ensure that this group of young people get involved?
Mr Maude
The whole point is to bring together young people from different backgrounds, rather in the way that national service was a great leveller. People from all sorts of backgrounds and geographies came together to work together, and that did promote cohesion. We are especially concerned that young people from disadvantaged backgrounds should not be excluded from this process. I hear what my hon. Friend says and it would be good if one of the pilot schemes next year could involve disadvantaged young people from his constituency. [Interruption.]
Mr Speaker
Order. An enormous number of private conversations are taking place in the Chamber, and it is not only unseemly, but unfair on the Member asking the question and on the Minister to whose reply we all wish to listen.
Julian Smith
North Yorkshire county council has four fantastic outdoor education centres, including Bewerley park in Nidderdale in my constituency. I suspect that my right hon. Friend does not have time for potholing, but would he come and meet me so that I can show him how those four centres could deliver on the national citizens programme?
Robert Halfon (Harlow) (Con)
11. What plans he has for future Government support for local voluntary groups; and if he will make a statement.
Steve Baker (Wycombe) (Con)
14. What efficiency savings have been identified by the efficiency and reform group.
The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)
I refer my hon. Friend to the reply I gave to Question 8.
Steve Baker
The last Government spent a fortune on advertising themselves. How will this Government make savings in that area?
Mr Maude
We established at an early stage a moratorium on new advertising and marketing spend. Any exceptions to that moratorium have to come to me personally, and I am delighted to find that remarkably few applications are being made for exceptions. The amount of taxpayers’ money spent by the Government on advertising and marketing has been significantly reduced. At the end of the year, I expect to be able to show a very significant reduction in what was being spent by the last Government on what I have to say was a pretty incontinent basis.
National School of Government
Lord Maude of Horsham Excerpts(13 years, 10 months ago)
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The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)
The 2009-10 annual report and accounts for the National School of Government have been laid before Parliament today. The report has been placed in the Library of the House for the reference of Members and copies will be made available in the Vote Office.
Civil Service Compensation Scheme
Lord Maude of Horsham Excerpts(13 years, 10 months ago)
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The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)
The Government intend to limit the amount of benefit payable to civil servants under certain schemes made under the Superannuation Act 1972. In the light of the extremely difficult fiscal circumstances facing the national economy, the Government have no option but to take steps to ensure that any scheme for civil servants is affordable in the economic climate.
Earlier this year, the previous Government introduced a revised civil service compensation scheme that introduced a two-year cap on the payment of compensation for loss of office, or redundancy. The terms of this scheme were agreed with the FDA, Prospect, the GMB, Unite and the Prison Officers’ Association. One union, however, the PCS, did not agree, sought judicial review in the High Court, and won. The revised scheme was accordingly quashed. The previous scheme is therefore once again in force. This scheme is prohibitively expensive—in some cases worth up to six and two thirds years of salary. We believe swift action to curb its excesses is essential. We take this step without relish. It has been made necessary by the unilateral action taken by PCS, acting on its own, to contest the previous Government’s scheme.
I will therefore bring legislation to the House as soon as parliamentary time allows in a Bill to limit the costs of future compensation payments for both compulsory and voluntary civil service exits. Specifically, the Bill will propose that all departures on compulsory terms from the civil service will be capped at a maximum of 12 months salary and departures under any other voluntary arrangements will be capped at 15 months salary.
I am at the same time writing to the Council of Civil Service Unions, inviting them to begin immediate discussions to negotiate a sustainable and practical long-term successor scheme.
My letter will make clear that the Government wish, in discussion with the trade unions, a fair and practical settlement. Such a settlement will need to be fair, and in particular to provide a higher-level of protection for lower-paid workers. I have also indicated to the trade union side that I would be content (in the interests of reaching a settlement) for a discussion to take place on the most suitable terms for voluntary departures.
Having acted swiftly to limit the costs of future compensation payments I hope that the Government’s invitation to the Council of Civil Service Unions will be received in the spirit it is offered and that they will engage speedily and constructively with a view to reaching an agreed, fair and sustainable long-term civil service compensation scheme. I believe that with goodwill and determination a new scheme could be in place by the time the Bill made necessary by the PCS action reaches the statute book.
Ministerial Responsibilities
Lord Maude of Horsham Excerpts(13 years, 10 months ago)
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The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)
The new “List of Ministerial Responsibilities” has been published today. Copies have been placed in the Vote Office and the Libraries of both Houses. Copies will also be sent to each hon. Member’s office in this House.
The list can also be accessed on the Cabinet Office website at:
http://www.cabinetoffice.gov.uk/government-business/government-ministers-responsibilities.aspx
Oral Answers to Questions
Lord Maude of Horsham Excerpts(13 years, 11 months ago)
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Mr David Amess (Southend West) (Con)
10. What mechanisms he plans to use to review the effectiveness of non-departmental public bodies.
The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)
We are committed to cutting the number of public bodies to increase accountability and cut costs. In future, each public body will have to meet one of three tests—does it perform a technical function, does it need to be politically impartial or does it act independently to establish facts? The Prime Minister has written to Cabinet colleagues asking them to apply those tests rigorously to the public bodies within their area of responsibility. I will be meeting colleagues in the coming weeks to take the review forward, and I expect to publish the outcome in the autumn with a view to introducing a public bodies Bill later this year.
Simon Kirby
I thank my right hon. Friend for his answer, and I welcome him to the Dispatch Box. Given the Government’s clear policy on localism, will he ensure that the regional development agency quango, SEEDA—the South East England Development Agency—is rapidly dismantled and that its powers and decisions are handed back to the local authorities to which those powers have always properly belonged?
Mr Maude
I am grateful to my hon. Friend for his kind remarks. It is very good to see him here. He is a close neighbour in Sussex and he makes a very good point. The Government will engage in discussions with local partners, including local authorities and local business organisations, to work out with them in respect of each RDA the best way forward. I suspect that he and I have the same sort of concerns about the way in which SEEDA has operated.
Chris Skidmore
While the excellent Frenchay hospital near my constituency was downgraded by the previous Government despite a 50,000-strong petition of local residents opposing the move, it was reported last year that the salaries of NHS quango bosses have increased by up to 77% in the past three years. Does the Minister agree that this Government’s commitment to transparency and accountability will help to reduce that sort of cost to the taxpayer and will help to protect NHS front-line services?
Mr Maude
First, I congratulate my hon. Friend on the very vigorous campaign that he has fought and continues to fight in the interests of his constituents to protect the work of the Frenchay hospital. I have visited the hospital and I know what good work it does. He is absolutely right that transparency is the friend of the citizen in exposing what the state spends its money on. It will enable communities, individuals and organisations to exercise and enforce much greater accountability. Money is going to be increasingly scarce in the years ahead, thanks to what we inherited from the Labour party, and it is going to be increasingly important that it is spent where it is needed, at the front line, on patients and on parents whose children are at school.
Andrew Stephenson
I thank my right hon. Friend for those reassurances. Will he tell us what we are going to do to stop the proliferation of more and more quangos, as happened under the previous Government?
Mr Maude
In addition to applying rigorously to existing public bodies and quangos the three tests that we have set out, we will ensure that public bodies do not come into existence unless they are absolutely necessary to meet one of those three tests. Bodies that spend public money and deliberate on policy should in general be accountable, through Ministers, to Parliament. That is a basic principle, and that is what we will enforce in future.
Hugh Bayley (York Central) (Lab)
Many public bodies, such as the RDAs the Minister mentioned, but also the Bank of England, the BBC, the Judicial Appointments Commission and parliamentary boundary commissions, are independent of Government precisely because they have to be independent of Government. Will the Minister give the House a commitment that this will not just be a centralising exercise whereby bodies that ought to be independent are taken under direct control by Ministers?
Mr Maude
I am disinclined to take lectures about centralising tendencies from someone who was a Minister in the last Government. I simply refer the hon. Gentleman to what I said. The tests that we will apply to quangos—to public bodies—will be rigorous and serious. If there is an overwhelming requirement for them to be independent politically, that will be one of the tests, but the presumption will be that public functions should be exercised by organisations accountable to Parliament.
Meg Munn (Sheffield, Heeley) (Lab/Co-op)
May I welcome the right hon. Gentleman to his post? He may be aware that I chair the Westminster Foundation for Democracy, a non-departmental public body that has enjoyed cross-party support for its whole existence. Can he clarify the processes that are taking place? The Westminster Foundation for Democracy is already under a process of review as one of the arm’s length bodies independent from the Foreign Office. How does that mix with the process he has set out today?
Mr Maude
I hope they will seamlessly meld together. I am not conscious of the particular review to which the hon. Lady refers, but this review will cover all public bodies that come under the responsibility of all Departments. I am confident that in my discussions about the review with the Foreign Secretary the Westminster Foundation will be considered in a proper way.
Mr Denis MacShane (Rotherham) (Lab)
I welcome the Minister to his responsibilities. If he has a bonfire of the quangos, there are one or two I might add. There is one where newly appointed staff are increasing, its executives earn more than Ministers and MPs, and are appointing press officers and consultants, yet they do not even answer the telephone. Would the Minister be surprised and would he care to name that quango? Might it be the Independent Parliamentary Standards Authority?
Kelvin Hopkins (Luton North) (Lab)
2. If he will discuss with ministerial colleagues proposals to strengthen Cabinet government.
Katy Clark (North Ayrshire and Arran) (Lab)
6. If he will bring forward proposals to equalise rates of pay between staff in the civil service and in non-departmental public bodies.
The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)
For the grades below the senior civil service, these matters are delegated to individual departments and to non-departmental public bodies. Nevertheless, we will seek to improve and modernise civil service pay arrangements to ensure that they are fair and transparent, to enable us to retain and motivate staff and to offer best value for money to the taxpayer.
Katy Clark
I thank the Minister for that answer and welcome him to his position. He will be aware that there are 230 separate bargaining units in the civil service and, at the moment, people doing exactly the same job can earn rates of pay that differ by up to 30 per cent., and more. What will the right hon. Gentleman do to bring about more equal and fairer pay structures within the civil service so that we have justice and to improve morale?
Mr Maude
In the absence of any money—and as the former Chief Secretary pointed out, there is no money left—the opportunities to equalise pay in an upwards direction are pretty limited. We have said that as part of the efficiency and reform group work that we have set in train, we will carry out a review to see how we can simplify civil service pay, but this is a deeply complex area.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
Can the Minister please give any details of the review into the introduction of the 20 times pay multiple in the public sector?
Mr Maude
The terms of reference for Will Hutton’s review are being drawn up and finalised. As my hon. Friend says, the review will look at the multiple between the best-paid and least-paid employees in the public sector. We are decentralisers and localists, so we will not expect to exercise our writ across the whole of the wider public sector. We think transparency will play an important part in driving down the differentials.
Mr Tom Watson (West Bromwich East) (Lab)
7. What plans he has to publish non-personal data held by Government Departments.
The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)
In our first month in government we have already published a number of key data sets, including the Treasury COINS—combined online information system—database, MRSA and C. difficile weekly infection rates for each hospital, and details of the salaries of 172 civil servants who are paid more than the Prime Minister. The letter from my right hon. Friend the Prime Minister on 29 May set out specific commitments to publishing further data on spending, contracts and the civil service during the rest of the year. We will also give the public a right to data so that people can obtain the Government-held data sets that they want.
Mr Watson
The right hon. Gentleman is doing a great job and I hope he gets the support of my Front-Bench team in accelerating the programme of releasing public sector data, but does he accept that the Government cannot be selective about those data? They cannot print 172 civil servants’ salaries without telling me what Andy Coulson is paid.
Mr Maude
All this will be divulged in due course. If I may, I should like to pay tribute to the hon. Gentleman. When he was a Minister in the Cabinet Office, he pursued the agenda of data transparency with admirable vigour, and I suspect he was somewhat frustrated by the lack of progress that it was possible for him to make. I look forward to working closely with him as we jointly pursue this agenda in the public interest.
David Tredinnick (Bosworth) (Con)
8. What plans he has for the future regulation of charities.
Mr David Anderson (Blaydon) (Lab)
12. If he will ensure that trade unions are involved in the work of his Department’s efficiency and reform group.
The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)
We are committed to proper engagement with public service staff and their representatives. Last week I had a good meeting with the Council of Civil Service Unions, and yesterday I attended a meeting of the TUC’s public service liaison group. We will invite the TUC and its member organisations, plus other representatives of public service employees, to meet regularly to discuss matters affecting the work force who deliver our vital public services, and to build on the work of the Public Service Forum, which I am committed to continuing and which will meet in July. There will be difficult issues to discuss, no doubt, but we are determined to air them through regular dialogue.
Mr Anderson
I thank the Minister for that reply. Will he look at the report that the Public and Commercial Services Union produced last year, showing that 20,000 tax collectors were sacked at a time when at least £40 billion of tax evasion and avoidance was going on in this country? Will he work with the unions to try to resolve that matter?
Mr Maude
I hear what the hon. Gentleman says, but he will recollect the former Chief Secretary to the Treasury who said that there was no money left. We have to run the Government with less money than there was, and there will have to be cuts. We hope, to the maximum extent possible, that public spending can be cut without affecting jobs, but it is unreal to expect that that will be totally avoidable.
Mr Graham Allen (Nottingham North) (Lab)
13. Whether he has had recent discussions with third sector organisations on the financing of early intervention programmes; and if he will make a statement.