Public Bodies (Diversity)

Diane Abbott Excerpts

Thursday 13th March 2014 Commons Chamber

[Seema Malhotra]

My right hon. Friend makes a very important point. There is a separate debate to be had about the effectiveness of creating of an independent body. Ministers, however, can still take responsibility and I will come on to discuss how the previous Government had targets for public appointments, which I think made a big and important difference at the very highest levels of every Department.

As I was saying, it was acknowledged last year that the pace of change was too slow, yet a year on it is slower still. Last year, the inclusion think tank Diversity UK, led by Dilip Joshi, Lopa Patel and Sushila Khoot—long-standing campaigners for equality of opportunity—undertook a survey to investigate what was happening behind the statistics and launched the findings at an event that I attended and at which there was cross-party representation.

The survey collected the views of ethnic minority individuals and found that the majority of respondents had not applied for a public appointment despite being aware of such appointments and despite 60% of them expressing a wish to apply in the future. When people were asked why they had not applied, their reasons were varied. They did not feel that they were qualified enough or that they had the right skills, which are common responses to surveys looking at people who are under-represented in different organisations and bodies. Other reasons cited for detracting 68% of respondents from applying for a public appointment included the requirement for sector-specific and previous board-level experience and—this is a very important point—little or no feedback from the process and a lack of cultural awareness from executive recruitment consultants. However, respondents also saw the positive opportunity that public appointments can provide with regard to benefiting society and playing a part in our community and national life.

The survey was circulated to approximately 1,500 senior- director level individuals, and the findings suggest a widening “aspiration gap” between the leaders in business and society and the leaders of our public institutions.

In 2003, Trevor Phillips, the then head of the Commission for Racial Equality, coined the phrase “snowy peaks syndrome” to help explain a phenomenon in the civil service. He said we should think of Whitehall as a mountain range: at the base of each mountain, we might find large numbers of women and ethnic minorities, whereas at the summit we will find a small amount of white, middle class men.

Today, more than a decade later, snowy peaks can still be found in many parts of our society, including the public sector. We see it in the NHS, where only 1% of chief executives are from BME groups even though BMEs make up more than 15% of the health service work force.

The Government have done some important work on improving the representation of women on boards in the private sector, but diversity, as I have said, goes wider than gender, and the public sector remains vital, too. Fourteen per cent. of the UK population is made up of ethnic minority individuals and it is time that the Government demonstrated greater leadership on the issue.

Just last month, new research on the corporate sector revealed the widening aspiration gap, with two thirds of FTSE 100 companies still having an all-white executive leadership. Only 10 ethnic minority individuals hold the post of chairman, chief executive or finance director, which is equivalent to 3.5% of roles at that level. A diversity deficit clearly exists in the corporate sector, as it does in the public sector. That deficit also contributes to the lack of growth in developing economies across the world, where our diaspora communities and diversity at board level make a huge difference in building relationships.

The disappointment is that we are still discussing this issue today, when we would have hoped that many of the barriers to the progress of ethnic minority individuals in Britain had been removed. What are the solutions? Lopa Patel of Diversity UK has stated:

“To have declining BME representation at senior levels in the corporate and public sector at a time when BME numbers are increasing in the general population is indicative of failings in the process.”

I agree with the sentiment that the Government must do more to identify and remove what might be institutional discrimination.

It is precisely because of the need to address both demand and supply side issues in the appointments process that the previous Labour Government brought in important reforms and set targets for 50% of new appointments to be women by 2015, and for appointments of BME people and those with disabilities to be in line with their representation in the population. The targets may have been ambitious, but they made a statement and gave a sense of urgency about the need for reform.

[Ms Diane Abbott (Hackney North and Stoke Newington) (Lab)]

Does my hon. Friend agree that not only has the number of people in the BME population gone up, but their level of education and their role among the professions are unrecognisable from when I was a child, which makes it even worse that the number of such people at senior levels is dropping?

[Seema Malhotra]

My hon. Friend makes a very important point. It goes back to the heart of the issue, which is that, as we all believe, appointments should be made on merit. It is about whether there is a gap between those with the talent, expertise and desire to be able to reach those appointments and their actually achieving that through the appointments process. The very heart of the issue is whether our system and processes are fair and bring in talent fairly in the way that we need.

Since this Government came to power, targets for those with disabilities or those from ethnic minorities have been removed. The gender target has been kept in the Cabinet Office diversity strategy, but it is now described as an aspiration.

Diversity UK sent its survey findings to all major Departments and requested meetings with Ministers to discuss the issues, but the response was mixed. Imagine its surprise at receiving rejection letter after rejection letter, with Ministers citing lack of time as the reason for not agreeing to meetings. The Home Office, the Department for Environment, Food and Rural Affairs and the Cabinet Office welcomed meetings to discuss the findings, but meetings were declined by, among others, the Prime Minister’s office, the Department for Communities and Local Government, the Treasury, the Department for Business, Innovation and Skills, and the Department for Education. Increasing representation is a complex issue, with no easy answers, but one thing is clear: it requires leadership from the top, particularly to give candidates the confidence to put themselves forward and the belief that it is worth the time and effort to do so.

May I ask the Minister to answer the following questions? Will he confirm which diversity targets for new public appointments are in place, and whether they are for increasing representation by gender, ethnicity and disability? What guidance is given to Departments on their recruitment processes, and on how to increase the diversity of suitable candidates at the application stage? What reviews are being undertaken of how effectively Departments recruit, and what powers does OCPA have to challenge those that do not perform well? What message is given to the head-hunters or search agencies selected to assist in recruitment, and to what extent is producing a more diverse range of suitable candidates stipulated in any contract? How are permanent secretaries held to account for their progress on diversity in public appointments? Are public appointment opportunities promoted at every level in our communities in order to reach a more diverse segment of the British public?

Finally, does he think that public bodies are using executive recruitment agencies effectively, and do those agencies have more knowledge of BME communities and how to reach them than public bodies and Departments have through their networks?

The Diversity UK report showed that respondents simply want a level playing field and a strong referee on this issue. The survey supported the Office of the Commissioner for Public Appointments and its independent assessors in providing those tools.

Our country is admired the world over for its openness, its sense of liberty and the opportunity that it offers all people. I look forward to the Minister’s response and to hearing how he sees us achieving greater diversity in public appointments, which is vital in ensuring that we deliver the public services that all parts of our communities need and in providing a greater sense of opportunity for all the British public.

--- Later in debate ---

[Mr Hurd]

The system is independently regulated and I will come on to that. There is more transparency in the process and that is an issue my right hon. Friend the Minister for the Cabinet Office and Paymaster General has placed at the top of the Government’s agenda. My experience is that this is more actively monitored and more transparent than it has been in the past.

There was a debate on whether the process benefits from independent regulation, overseen by the Commissioner for Public Appointments. I think it does. It is key in supporting the merit principle, rather than other factors that might determine appointments. All panels have an independent member, who for chair appointments will be nominated by the Commissioner for Public Appointments. That is a welcome initiative. The Centre for Public Appointments, which is part of the Cabinet Office, is working across Whitehall, and with the executive search industry, to make practical steps that will help us to open up public appointments to the widest possible pool. I will provide three examples.

First, we are modernising the recruitment process to ensure that adverts are effective and non-exclusive, and that interview panels are diverse and reappointments are made only in cases of utmost necessity. No one seriously disagrees that appointments should not be made on the basis of merit, but talented people often do not apply for public appointments either because they do not know about them, or because they do not recognise what they have to offer. We are placing greater emphasis on ability rather than experience, because we do not want to exclude those who may not yet have acquired board experience but could nevertheless potentially be good board members.

Secondly, there is nothing more off-putting than an unnecessarily long application process, so Departments are increasingly switching to using a straightforward CV and covering letter. We are working to simplify job adverts and are cutting out jargon to appeal to as wide an audience as possible.

Thirdly, we are maximising the use of online and targeted advertising, and social media. Two years ago, the CPA did not even have a website, let alone a Twitter account. Now the former has more than 20,000 visits a month and the latter has 1,600 followers. These are sensible measures and independent regulation is important.

On the representation of women and BME communities, progress has been made, particularly in relation to women. The rise of women in the public sector during the 20th-century was agonisingly slow. We should not forget that until 1947, women in the civil service were still expected to resign when they married. They earned less than men into the 1950s. Indeed, when Dame Mary Smieton was appointed as permanent under-secretary at the Department for Education in 1953—only the second woman to reach this grade—she was paid the same as a man. It would be nice to think that that was because her Department was an early advocate of equal pay—it was not—but the Treasury had not worked out a women’s rate of pay at that grade because it did not think that it would ever need to. This is where we have come from. Thankfully, much has changed and continues to improve, both in the civil service, where 47% of employees are currently women, and across the wider public sector, where women continue to shatter glass ceilings. For example, the RAF has recently appointed its second female Air Vice-Marshal.

Significant areas for improvement remain. As the hon. Lady acknowledged, perhaps foremost among them is the number of women on public sector boards. Women remaining a minority in the boardroom—or worse, where all-male boards persist—becomes more and more of an anachronism every year that passes. In the last financial year, only 37% of public board members were women. I believe that transparency is one of the best ways to raise performance. This was the first year that the Government published their own statistics on the general diversity of appointments, something I hope the hon. Lady welcomes.

[Ms Abbott]

The Minister is of course the second generation of Hurd to serve in this House, but we know he is there on merit alone and we all believe in merit. However, does he not believe that, in 21st-century Britain, it is very important for public boards and the top of the public sector to look like Britain?

[Mr Hurd]

I hesitate to correct the hon. Lady, because the correction will not help my case, but I am actually the fourth successive generation of my family to serve in the House. However, I am increasingly, and thankfully, an anachronism. The hon. Lady’s point is entirely valid.

The issue of transparency is particularly important. The message that I am trying to convey to the hon. Member for Feltham and Heston, and to other Members, is that we are making some progress. In the first six months of the current financial year, the number of women on boards rose to 45%. That constitutes real progress.