Oral Answers to Questions
Lord Maude of Horsham Excerpts(14 years ago)
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Julian Smith (Skipton and Ripon) (Con)
8. What steps he has taken to increase the efficiency of his Department’s mechanisms for Government procurement.
The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)
Procurements of major projects by the British Government have typically taken 77 weeks. They have frequently involved the extensive use of external consultants. That process is costly and wasteful, excluding small businesses, social enterprises, and voluntary and charitable organisations. That results in procurements that are too often uncompetitive, delayed, expensive and ineffective. We are taking steps to streamline the process. In the meantime, we are renegotiating contracts with the bigger suppliers to the Government on a single-customer basis, thus leveraging the Government’s buying power. That will deliver some £800 million-worth of savings in this financial year alone.
Stuart Andrew
Sir Philip Green’s report showed just how little time the previous Government afforded to the basic principles of cost-effective commissioning and procurement. Does the Minister feel that that attitude is embodied in the ill-considered note left by the ex-Chief Secretary to the Treasury as he left his old job?
Mr Maude
If the last Government, including the right hon. Gentleman, had bothered to spend the time that we are spending getting into the unglamorous parts of Government spending to find out just how much money can be saved, he might not have felt it necessary to leave a note in quite the stark terms that he did, true though it was. The fact is that there is a huge amount of wasteful spending. Sir Philip Green has done a sterling service in picking up some stones and providing the evidence for that, and we will be acting on his recommendations to see how we can take costs out of the overheads of Government. That is the best way to protect front-line services and to protect the jobs of dedicated public servants, which the right hon. Gentleman claims to care about.
Julian Smith
Does my right hon. Friend agree that small business has been locked out of the procurement process for far too long? Will he start to give small businesses, particularly those in Yorkshire, a fairer crack of the whip?
Mr Maude
A big benefit arising from the changes that we are proposing to make to the way in which services are procured is that they will open the door to smaller businesses. Over-prescriptive procurements make it very expensive for small businesses to take the risk of committing to tendering, and they tend to be excluded on a self-selecting basis. We want to change that. It is our aspiration that 25% of contracts should be let with small and medium-sized enterprises. That is the direction in which we hope to go, and I am sure that my hon. Friend’s constituents in Yorkshire will take full advantage of it.
Gordon Banks (Ochil and South Perthshire) (Lab)
Will the Minister be able to publish information in future to show that his aspiration to help small business is not just an aspiration but a reality?
Mr Maude
One of the stark conclusions of Sir Philip Green’s review was that the quality of Government data is lamentably poor. It is not easy to know exactly what the position is. The right hon. Member for Birmingham, Hodge Hill (Mr Byrne) referred to the lack of centrally held data about contracts with the voluntary and charitable sector; that merely begins to illustrate the problem.
Mr Nigel Dodds (Belfast North) (DUP)
The Minister talks about small and medium-sized enterprises gaining more from Government contracts, but can he indicate what he is doing to ensure that there is a good spread of that throughout all regions of the United Kingdom?
Mr Maude
All regions and nations across the United Kingdom should be able to benefit from that aspiration. We are going to expose much more widely the tender documents that are available so that small businesses will find it much easier to take part in these sometimes quite intimidating processes that have excluded many of them in the past. [Interruption.]
Mr Speaker
Order. I understand that the House is eagerly anticipating later business, but when there is a constant hubbub it is very discourteous and most unfair both on the person wanting to ask the question and on the Minister deputed to answer it.
Chris Skidmore (Kingswood) (Con)
13. What recent progress has been made on his Department’s review of non-departmental public bodies.
The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)
Last week I announced the first results of the Government’s review of quangos. This is a work in progress; the principal aim is to increase accountability. We believe that where the state carries out a function it should be accountable to a Minister or to a local council unless one of three rigorous tests is met. To pass, the function must be purely technical, tasked with measuring facts or figures, or plainly required to be politically impartial. We reviewed 901 bodies and intend that nearly 200 will cease to be NDPBs, and we will merge a further 118 and substantially reform a further 171.
Charlie Elphicke
Does the Minister agree that the review should include the misuse of public funds by quangos and public sector balance sheet organisations in paying lobbyists to brief against the Government or elected Members in the execution of their mandates?
Mr Maude
Guidelines already limit the use of external consultants for those purposes, and we intend to tighten them further, because the public find it quite offensive that a quango should be spending taxpayers’ money on hiring external consultants to lobby the Government to encourage them to spend more taxpayers’ money.
Chris Skidmore
Will the Minister tell the House how many quangos were created by the previous Government and, of those, how many will remain as a result of the changes that he is introducing?
Albert Owen (Ynys Môn) (Lab)
Last week the Minister announced that many quangos would be done away with and their responsibilities transferred to third sector organisations. Will he assure the House and myself that those organisations, such as citizens advice bureaux, will be properly resourced so that they can provide people with specialised advice? Will he dispel the myth that this is being done on the cheap?
Mr Maude
The aim of the quango review is not particularly to save costs or money—although it will—but principally to increase accountability. When functions are transferred, such as consumer advocacy functions to CABs, there will be a transfer of resources. The hon. Gentleman will have to wait a little longer to hear the extent of those resources.
Mr David Lammy (Tottenham) (Lab)
Why does the Minister intend to disembowel the Equality and Human Rights Commission? Does he not believe that its responsibility to promote equality on behalf of women and ethnic minorities is important? Why is he reducing it to a purely regulatory body?
Mr Maude
Many people felt that that body was not spending taxpayers’ money well. Its function is important and we concluded that it justified the EHRC continuing to exist as an independent body, but given that we are facing a situation in which, as the former Chief Secretary helpfully pointed out, there is no money left, significant savings have to be made. The EHRC will have to play its part in that.
Mary Macleod (Brentford and Isleworth) (Con)
4. What recent progress has been made on establishing the national citizen service.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
6. What recent progress has been made in delivering his Department’s policies on Government commissioning and procurement.
The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)
Commissioning is currently too prescriptive; tender documents can be immensely lengthy, specifying every detail of every step in every process. That stifles innovation, excludes new entrants to the market and adds wholly unnecessary cost. We intend that commissioning should be outcome-based, leaving much more scope for innovative providers from the social enterprise, voluntary, charitable and small business sectors to bid. Whenever possible, commissioning should be based on a payment-by-results model.
On procurement, I refer my hon. Friend to my reply to Question 2. [Interruption.]
Mr Speaker
Order. Once again, I understand the excitement and anticipation, but the House must come to order. Such conduct makes a bad impression on the electorate, whose support we so recently sought.
Stephen Metcalfe
I thank my right hon. Friend the Minister for his answer. Following his earlier comments, I seek assurance that small and medium-sized enterprises in my constituency can access Government contracts. Can he give me any examples of practical help now or in future that would make that easier to achieve?
Mr Maude
We certainly hope that that will be the case. It is our aspiration that 25% of Government contracts should end up in the small and medium-sized sector. We are committed to publishing online, in an easily accessible form, all Government tender documents. That will make it much easier for small businesses, which can otherwise be put off the process, to take part.
Jon Trickett (Hemsworth) (Lab)
In terms of commissioning and procurement, the public sector procures £13 billion-worth of services from the charitable sector. On Monday, a think-tank suggested that the Government’s statement today will wipe out about £5 billion of that procurement—the whole of the increase that was achieved in the past 10 years. What are the Minister’s intentions for funding the voluntary sector? How does he reconcile cuts in that sector with the Prime Minister’s aspiration for the big society?
Mr Maude
We are very aware of concerns in the sector. The Chancellor is very aware of them, and will have something to say about the matter a little later. However, there must be reductions in public spending for the simple reason that the former Chief Secretary set out with such uncharacteristic lucidity in his valedictory note.
Mark Pawsey (Rugby) (Con)
10. What steps his Department is taking to share best practice in procurement among Departments.
The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)
Procurement of basic commodities was carried out without any effort to leverage the scale and buying power of the whole Government—[Interruption.]
Mr Speaker
Order. I understand the excitement, but I hope that that practice, which was discontinued some time ago, will be discontinued in future. The Minister must be heard.
Mr Maude
That led to one part of the Government buying basic office supplies at seven and a half times the cost that other parts incurred. Allowing wasteful spending of that type to remain unreformed would mean that front-line services and the jobs of dedicated public servants would be more at risk. We are mandating that all Departments and public bodies should in future buy through supplier contracts negotiated on behalf of the whole of central Government. That will cut the costs of Government overheads by some—[Interruption]
Mr Speaker
Order—[Interruption.] Order. In so far as we could hear the Minister, I think we have got the drift of it.
Mark Pawsey
I thank the Minister for his reply in as much as I heard it. It is sound commercial practice to maximise buying power by adding together the purchases of all bodies within an organisation and to use that to drive down prices from suppliers, yet Sir Philip Green found waste arising from huge variation in the prices paid by different Departments. What steps will the Minister take to co-ordinate Government procurement in future?
Dr Alan Whitehead (Southampton, Test) (Lab)
Will the Minister ensure that best practice in sustainable and green procurement is part of his briefing in ensuring best practice in Departments, and does he consider that the abolition of the Sustainable Development Commission will help or hinder him in that process?
Public Bodies Reform
Lord Maude of Horsham Excerpts(14 years ago)
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The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)
Today, the Government have taken decisive action to restore accountability and responsibility to public life. For too long, this country has tolerated Ministers who duck the difficult decisions they were elected to make. For too long, we have had too many people who were unaccountable, with a licence to meddle in people’s lives. For too long, we have had quango pay spiralling out of control, so that seven people in the Audit Commission are paid more than £150,000 a year at a time when the average civil servant’s pay is £23,000.
The landscape for public bodies needs radical reform to increase transparency and accountability, to cut out duplication of activity and to discontinue activities that are simply no longer needed. My written statement this morning outlined the start of a process to curtail the quango state. I have led an intensive review into public bodies, subjecting each to four tests. The first test was existential and asked, does the body need to exist and do its functions need to be carried out at all? The answer to that question in some cases was no. For example, we decided that the Government probably do not need an independent body to deliberate on the purchase of wine.
If, as in most cases, the body’s functions were deemed necessary, we then sought to establish whether those functions should properly be carried out at arm’s length to government. If the body carries out a highly technical activity, is required to be politically impartial or needs to act independently to establish facts, then it is right for it to remain outside direct ministerial accountability. That is the case with bodies such as the new Office for Budget Responsibility and Ofgem. However, any quango that does not meet one of these tests will be either brought back into a Department or devolved to local authorities—in both of which cases, there will be democratic accountability—or its functions will be carried out outside the state altogether in the private or voluntary sectors.
We have gone through an extensive process to determine the outcome of the review. Our first task was quite simply to identify how many quangos there are and what they do. It may sound absurd but it was and remains incredibly difficult to gain firm information on such bodies. Many do not publish accounts, there is no central list and there are myriad different types all with different statuses. The official list of non-departmental public bodies has 679 bodies, excluding those in Northern Ireland, but that does not include non-ministerial Departments, Government-owned public corporations or trading funds. Our review covered 901 bodies and we believe, but cannot be certain, that that is the true extent of the landscape. I stress that departmental agencies—Executive agencies—are not in the review’s scope. They are directly controlled by Ministers who are accountable to Parliament for what they do.
Once we established the overall lists, each Department went through a rigorous process to determine whether each of its quangos met any of the tests. The list I have published today is not complete but is a work in progress. The House will note that a number of bodies are subject to a longer-term review—for example, the Children’s Commissioner and the Office for Fair Access.
Of the 901 bodies in the review, substantial reforms are proposed for more than half. We propose that 192 should cease to be public bodies at all and that 118 should be merged down into 57 successor bodies, removing wasteful and complicating duplication of effort. Some 171 bodies are proposed for substantial reform while retaining their current status. For those bodies that we are abolishing, I stress that in many cases that does not mean the end of the function. Abolishing the regional development agencies, for example, does not mean that we no longer care about promoting regional business—[Interruption.] The Opposition’s response is very revealing, because it suggests something fundamental about what we are trying to change: the assumption that one can prove that one cares about something only if one sets up a quango. We think that there is a different and a better answer, and that we can promote regional business in a better way.
Since the introduction of RDAs, regional imbalances have become not better, but worse, and the development agencies carried a staggering £212 million in administration costs. We believe that local businesses and local authorities are better placed to decide what they need, not highly paid executives imposed on them by Government. An activity does not need an unaccountable bureaucratic structure to signify its importance; the exact converse is true. If something is important, someone who is elected should make decisions about how it is done. That is why we are bringing a host of functions back into Departments, such as those of the Child Maintenance and Enforcement Commission and the Renewable Fuels Agency to name but two.
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. They will be expected to become more open, accountable and efficient. In the new year, I shall outline to the House in more detail the new framework for those remaining quangos.
All proposed changes will be delivered within Departments’ spending review settlements. Those bodies whose status is being retained may be subjected to further reforms following the spending review, in the same way as all other parts of the public sector. I want to acknowledge the dedication and hard work of those who work in public bodies. We are committed to working with the chairs and chief executives of those bodies to ensure that change is conducted as fairly and as smoothly as possible.
To enable the proposed changes to be implemented, 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 are the first and necessary step to restoring proper democratic accountability to public life. They signal a complete culture change in government, from one that ducks difficult decisions, is opaque and allows profligacy, inflated salaries and waste, to an Administration who are open and transparent about what they do, with Ministers who take responsibility for their actions and are mindful of every penny of taxpayers’ money. I commend these reforms to the House.
Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)
I am very grateful to the right hon. Gentleman for early sight of his statement—in the Financial Times, The Guardian and The Daily Telegraph this morning. He is a man who appreciates the courtesies of this House, so I know that he will provide you, Mr Speaker, with an explanation of how the media could possibly have been briefed before Members were.
May I, however, start on a note of consensus? I thank the Minister for his work in completing a process that was set in train during my time at the Treasury. In March I told the House that 123 quangos would need to close, and from first glance at this statement it appears that two thirds of the 192 arm’s length bodies that need to close are those that I announced in March. Instead of 20% of quangos being closed, the Minister has announced that 25% will be.
I am grateful, too, that his tests largely confirmed the approach that I set out in March. I welcome his endorsement of the principles of a sunset clause for quangos and of triennial reviews. I am especially grateful for his confirmation of our decision to mutualise British Waterways, which will be an important institution in the third sector that I know we both support.
May I, however, raise the slightly obvious question about the way in which the right hon. Gentleman has conducted this exercise? All of us want to improve accountability—it was one of the three principles that we set out in the ALB review in March—but we also want to save money, and once upon a time I thought that the current Prime Minister agreed, because, in a typically thoughtful and measured intervention, he said in October 2008:
“Sound money means…destroying all these useless quangos and initiatives.”
Now the Minister tells us that the Prime Minister in fact got it wrong. Saving money
“is not the principal objective”,
he told the “Today” programme this morning.
Labour’s plan would have saved £500 billion by 2012-13. Now we are told that the Government’s approach will not in all cases save money at all. In fact, it could cost more money than it saves at the Audit Commission, the RDAs, the UK Film Council, Standards for England and the Human Fertilisation and Embryology Authority. I am afraid that the Minister has become the most expensive butcher in the country. His friend the Chancellor will no doubt be delighted.
Will the Minister, first, set out the total cost of implementing the plan this year and next? He should have those figures at his fingertips now that the review is almost complete. Secondly, can he explain the impact on jobs and unemployment? Organisations such as the UK Film Council help to strengthen industry and tax revenues. What estimate has he made of the impact of his announcement on growth and jobs?
Thirdly, the principle of independence is sometimes important, and I am glad that he acknowledges that, but it is not clear how he has applied it in all cases. For example, we need to hear a little more from the Minister about the Football Licensing Authority. The Secretary of State for Culture, Media and Sport infamously had to apologise for blaming Liverpool fans for the Hillsborough tragedy; now the Government are scrapping the organisation established to ensure that a Hillsborough never happens again, without being clear about what will be put in its place.
Finally, in March I introduced a new principle whereby quangos would be set up only as a last resort. The Minister’s statement confirms his presumption that state activity should be undertaken by bodies that are democratically accountable. His party’s manifesto promised 20 new quangos—one third of the extra quangos that he has abolished today. Will he confirm that those quangos will not go ahead?
Mr Maude
It is very good to have such a consensual approach from the man who famously told the world on leaving government that there was no money left. There will be savings as a result of the process, and there need to be because the right hon. Gentleman was a prominent member of a Government who left office spending £4 for every £3 of revenue. They were having to borrow £1 out of every £4 just to keep the lights on, the teachers in the schools, the pensions being paid and the doctors and nurses in the hospitals. This Government have to clear up the mess that his Government shamefully left behind, and there will be savings from the process.
Mr Maude
We became used to the previous Labour Government bandying around large numbers in respect of the savings that they proposed to make, but we know that when the National Audit Office went around after those much vaunted efficiency exercises over which he and his colleagues presided, it found that in most cases they had not saved money at all. It was all about the optics and trying to make a point; it had nothing to do with reality.
I am sorry to say that jobs will be lost as a result of this process, but, in order to clear up the fiscal mess that the right hon. Gentleman’s Government left behind, that is sadly an inevitability. Savings will be made as a result of the exercise, but, as I said at the outset, it is not principally about saving money, although it will do so. It is principally about increasing accountability—the important presumption that when an activity is carried out by the state, and there is no pressing need to do so at arm’s length from government, it should be carried out by someone who is accountable democratically, either a Minister who is accountable to this House and, through this House, to the public, or a local authority that is accountable to local residents.
It is very good that the right hon. Gentleman agrees with our approach and thinks it sensible. He tried to claim credit for it himself, actually, so, as the various bodies that we have discussed today start to complain, as some will, and as some vested interests will with a very loud voice, I shall be able to tell them that our approach is a consensual one—that the Labour party wants to play its full part in responsibility for the whole exercise.
Mr Maude
The hon. Member for Bolsover (Mr Skinner) says, rather regretfully, “Not very much.” It sounds as though he wants us to be more regulated and bossed around—that is somehow in his nature.
The answer to my right hon. Friend the Member for Wokingham (Mr Redwood) is that some functions will not be carried out at all. The key point is that the presumption will be that where there is a state activity, at least he and the rest of the House will be able to hold a Minister to account for what is done. What people find so irritating is the sense that there has been incontinently set up, in large part by the previous Government, this huge amount of activity by bodies that are in no way accountable: no one can hold them accountable for what they do. That is what we are seeking to change.
Mr Jack Straw (Blackburn) (Lab)
May I first invite the Minister, in the spirit of consensus that we certainly want on this, to show just a tiny bit of humility in recognising that the high point of the unaccountable quango state was under the Major Government, of whom he was, I think, an adornment? At that time, outrageously, as I found when I became Home Secretary, having endured it in opposition, even parliamentary questions to the Secretary of State about prisons were being answered not by a Minister but by the chief executive of the agency concerned. That was preposterous and it happened under a Conservative Government, but we ended it very quickly. I hope that he recognises that the history goes right back to the Major Government.
Secondly, may I ask the Minister a specific question about the Youth Justice Board? I set that up; I accept that it does not have life eternal and that there is a case for reviewing its future. However, will he ensure that as its future is reviewed, its key functions of delivering effective youth justice are preserved?
Mr Maude
It is a pleasure to welcome the right hon. Gentleman into our big tent; it is open to all-comers, and it is a delight to have him as a resident. I think that he confuses the role of Executive agencies with the function of a quango. It seems to me perfectly proper that when Members of Parliament inquire about an activity they receive a reply from the Executive agency’s chief executive. That does not mean that that agency is not accountable to Parliament through what a Minister says and does. The right hon. Gentleman will have found himself, as Home Secretary, directly accountable to this House for those functions.
Some of the functions performed by the Youth Justice Board will continue to be very important, but we take the view that the need for independent oversight of the process has now outlived its usefulness.
Andrew Bingham (High Peak) (Con)
I am pleased to hear my right hon. Friend say that overall costs will be reduced. A Local Government Association publication of December last year outlined 790 quangos costing £43 billion. How can he ensure that more quangos will not reappear as some disappear?
Mr Maude
I am sure that there will occasionally be a case for new independent bodies coming into existence, but they will need to meet rigorous tests. They will need to show that they are needed to provide a seriously technical function, or that the function has to be carried out in a way that is demonstrably politically impartial, or that they are measuring facts in some way that requires independence. The Office for Budget Responsibility, which my right hon. Friend the Chancellor set up early in the life of this Government, is one such body that meets all those tests. They will have to go through a rigorous process before consent is given to their creation.
Mr George Howarth (Knowsley) (Lab)
Does the Minister accept that some of these bodies were set up almost as debts of honour? I particularly mention the Football Licensing Authority and the Human Tissue Authority, which were set up respectively after the Hillsborough stadium disaster and the scandal at Alder Hey hospital. Does he accept that a lot of people who were affected by those events will be aghast that that debt of honour has now been reneged on by this Government?
Mr Maude
I hear what the right hon. Gentleman says, and I know how deeply he, and many people, feel about that. Those two events caused a deep scar in the lives and memories of very many people, and they were scars on the life and history of this country. I would simply make this point to him: we should not be setting up bodies, or retaining bodies in existence, merely for symbolic purposes. It will remain important that there is expertise about safety measures in football grounds. That function does not disappear, but it does not necessarily need to have its own separate, unaccountable organisation to dispense it. Similarly, the functions of the Human Tissue Authority can be carried out perfectly properly within the plethora of regulatory bodies in the health sector, to which my right hon. Friend the Health Secretary is rightly applying some reforming rigour.
Mr Mark Williams (Ceredigion) (LD)
Liberal Democrat Back Benchers welcome the statement on the grounds of cost, improved efficiency and, above all, embarking on dealing with the problem of democratic deficit. However, behind the names of these organisations there are many people genuinely fearful for their jobs. Will the Minister emphasise this line in his statement: “For those bodies that we are abolishing, I should stress that in many cases this does not mean the end of the function”? That is very important, and that reassurance needs to be made to many other people.
On the ending of Consumer Focus and the passing of its responsibilities to citizens advice bureaux, the Minister is aware that there are many concerns about funding for Citizens Advice at a central level. What discussions has he had with his colleagues about enhancing the role of CABs and, indeed, increased funding—
Mr Speaker
I am extremely grateful to the hon. Gentleman, and I will be grateful to the Minister for a brief reply.
Mr Maude
My hon. Friend makes a perfectly proper point about staff. We hope that jobs will not be lost, although some will be; we recognise that every single one is a personal disaster for the family involved. The chief executives of all bodies affected by the changes I am announcing should have communicated with staff this morning to give them as much certainty as possible about the future.
As regards Consumer Focus and consumer activities, the funding implications are being considered by my right hon. Friend the Business Secretary, and results will emerge in due course. We recognise that we cannot just hand these functions over to outside bodies without any resource implications.
Mark Durkan (Foyle) (SDLP)
In pursuit of his body count, did the Minister consider the role of the Investigatory Powers Tribunal, which has upheld absolutely no complaints against the security services and has never offered any reason? Its existence is merely a deceit of scrutiny to mask the conceit of unaccountable, secret powers. Has he found any more faceless, toothless or spineless creatures in the ecosystem of government?
Caroline Dinenage (Gosport) (Con)
In Gosport, we face the prospect that our outstanding Navy engineering training school at HMS Sultan will move to St Athan in Wales under a massive and unnecessarily expensive private finance initiative. What will happen to some of the other outrageous PFIs that quangos have entered into, such as the National School of Government?
Mr Maude
As we spend more time in government and pick up stones, we find quite a lot of contracts in place that make one wonder a bit about the diligence that Ministers took in exploring them at the time. Going through the detail of contracts is not necessarily the most amusing way to spend one’s life, but it is rather important because there is a lot of public money involved; the body to which my hon. Friend refers is one such example.
Alison McGovern (Wirral South) (Lab)
Will the Minister say what will happen to the functions of the Football Licensing Authority and who will give its world-class advice on safety? That issue is of high importance to my constituents and to many others around the country.
Mr Maude
The FLA does not license football grounds, of course. That responsibility rests in all cases with local authorities, which will continue to exercise that incredibly important function. The central expertise to support the licensing activity could exist in a number of bodies, such as the Health and Safety Executive, or the Football Association could provide it. My right hon. Friend the Secretary of State for Culture, Olympics, Media and Sport will explore all those options.
David Rutley (Macclesfield) (Con)
I congratulate the Minister on the speed with which he has taken forward the review and this activity. [Interruption.] Well, it was completely ducked by the Labour Government. What further steps is he taking to give the remaining public bodies an increased focus on effectiveness and value for money, which is much needed as part of the culture changes set out in his statement?
Mr Maude
I am grateful to my hon. Friend for his remarks. In my written statement and the list attached it, we have identified 40 bodies that are still under review, in many cases because a formal review has been launched but has not yet reached its end. The Chancellor’s comprehensive spending review, which I believe he will announce to the House next Wednesday, will set out the spending envelopes for all remaining bodies and place them under considerable financial rigour. For those that remain independent bodies there will be more transparency, which we have already started with the disclosure of higher salaries above £150,000. That has raised a number of questions about how those bodies are run.
Ian Lucas (Wrexham) (Lab)
Some of the most vulnerable people in Wrexham work at the local Remploy factory. What kind of Government is it who include two words—“under consideration”—about their jobs, and what consultation is the Department for Work and Pensions undertaking with people whose jobs the Government are threatening?
Mr Maude
To put it bluntly to the hon. Gentleman, it is a Government who are having to clear up an appalling mess left by his party, which left office spending £4 for every £3 in revenue. This coalition Government are having to reduce and eliminate a budget deficit that was created by his party with gross irresponsibility. My right hon. Friend the Secretary of State for Work and Pensions is undertaking a serious review of the future status of Remploy, and is very much aware of its good work and the valuable employment that it provides for many disabled people.
Bob Russell (Colchester) (LD)
Quango is not a description usually associated with the Independent Parliamentary Standards Authority. If it is not on the Minister’s culling list, will he please consider putting it in there? This morning, IPSA refused to refund the cost of an advertisement for an advice bureau for my constituents. Is that not an affront to the House? Perhaps the Minister would like to invite Sir Philip Green to take over IPSA. I am pretty sure that the backroom staff of Topshop could do a far better job.
Mr Maude
I have been invited to go down that path before, and I am a cautious fellow so I shall resist the temptation to do so. I am grateful to my hon. Friend for his endorsement of the approach that Sir Philip Green has taken in helping the Government pick up a number of stones to find out exactly what is crawling around underneath.
David Cairns (Inverclyde) (Lab)
The Minister is proposing to merge UK Sport and Sport England, which do quite distinct jobs—there is a clue in their titles. From his existential ruminations, will he tell me how he proposes to guarantee that elite athletes in Wales, Scotland and Northern Ireland, who are getting magnificent support from UK Sport in the run-up to the Olympic games, are not disadvantaged by what is effectively a takeover by Sport England, which understandably has a quite different focus?
Mr Maude
This is cross-Government activity, and the review has taken place across the Government. The hon. Gentleman will find that my right hon. Friends in charge of other Departments will make statements publicly today, and then he can pursue the matter. Of course the two organisations have different focuses, but they none the less cover a lot of the same ground. Having two separate lots of unproductive overheads when one set could do the job just as well does not seem a good way to spend taxpayers’ money.
Mr Dominic Raab (Esher and Walton) (Con)
I commend the Minister for his statement. Does he agree that the problem with quangos is not just their cost but their effectiveness? Competition law is vital for a free market, but having three regulatory bodies—the Office of Fair Trading, the Competition Commission and the European Commission—has made business more bureaucratic and regulation less effective. When Lloyds bought HBOS, the OFT’s competition concerns were brushed aside with a wink and a nudge from the last Prime Minister at a cocktail party. Does the Minister agree that that is a good example of how less overlapping bureaucracy can mean more independent and robust regulation?
Mr Maude
My hon. Friend is completely right. The way in which the competition scrutiny process, which is really important for an effective economy, currently works can be very complex, confused and slow. If we can simplify it by merging competition functions into one place, as we propose, there will be a benefit for the economy and for business and it will assist in creating jobs, which will be really important.
Kate Green (Stretford and Urmston) (Lab)
I noted with interest that the Child Maintenance and Enforcement Commission was one of the bodies to be brought back within the Government tent. Of course, it has not been subject to the same lack of public confidence as the Child Support Agency suffered for many years. How can the Minister guarantee that the stakeholders whose interests are put at the heart of the CMEC’s functions within Government are parents and, crucially, children, and not primarily the state, as was the case with the CSA?
Mr Maude
I suppose the short answer to the hon. Lady is that this Government believe that Ministers should make themselves available to be held to account for what is done in their name. I understand that the previous Government preferred not to do that and set up independent bodies to carry out important functions. The child maintenance function does not meet any of the three tests that I set out. It obviously needs to exist, but it does not need to be politically impartial, and indeed Ministers should be ready to be held to account for it.
Richard Harrington (Watford) (Con)
I very much welcome my right hon. Friend’s statement. Contrary to what the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) said, I have found that in the case of a quango that I have been dealing with, the UK Film Council, the industry is delighted that in future it will have direct access to Government instead of having to go through a third party. My concern, however, is that the same people who are working in such quangos will simply become Government employees. What measures will he take to ensure that that does not happen?
Mr Maude
I suppose from my hon. Friend’s point of view the bad news is that many of them will become Government employees, but in those circumstances Ministers will be held responsible for what they do. I make no apology for restating that the principal purpose of the review is to increase accountability. The fact that someone becomes a civil servant employed directly by a Government Department rather than by a public body will make them more accountable, not less. We will be able to drive value for money and effectiveness much better.
Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)
On the same subject, the Minister did not respond to the question that my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne) asked about the UK Film Council. I declare an interest: I co-chaired with Stewart Till of Universal the review “A Bigger Picture”, which led to the formation of the council. I am sure the Minister would agree that since that time, there has been a huge renaissance of the British film industry. How can it be considered achievable and accountable to switch responsibilities from the council to the British film industry, and how can he say that we will have access to more transparency?
Mr Maude
I treat what the right hon. Gentleman says with great respect, because I know that he has a long background in the film industry. He is passionate about it and has done a huge amount in the course of his illustrious career to support it, but I take issue with his central contention. The implication of what he sets forth is that the excellent renaissance of the British film industry is somehow inextricably linked with the creation of the UK Film Council, but the creativity of the people who make films delivered that. I find that there has been a mixed response to the announcement that the UK Film Council will be abolished, which was made by my right hon. Friend the Secretary of State for Culture, Olympics, Media and Sport back in July. Very many eminent people in the film industry say that the UK Film Council’s work was not central to the great success of the British film industry, but marginal in many cases.
Robert Halfon (Harlow) (Con)
Does my right hon. Friend agree that hard-working taxpayers in my constituency will be glad that their taxes will no longer subsidise regional bureaucrats and quangos in the east of England? Does he also agree that that work could be done much better by local federations of small businesses and chambers of commerce, and that the new local enterprise partnerships should be lean and mean?
Mr Maude
I am confident that they will be, because they will be under much closer local control. Local business organisations will contribute to them and local authorities, which are of course democratically accountable, will influence them. The fact is that regional development agencies did not contribute to narrowing the regional imbalances in our economy. In fact, those imbalances got worse and not better when the agencies existed over the lifetime of the previous Labour Government. This Government believe that support for local and regional businesses that is focused more locally and that is more locally accountable is likely to deliver greater success.
Derek Twigg (Halton) (Lab)
There is great concern in the field of health about the impact of the changes in loss of expertise, which we will examine closely in the coming days and weeks. Would the Minister today like to give a guarantee on the Floor of the House that there will be absolutely no loss of expertise?
Mr Andrew Turner (Isle of Wight) (Con)
How will the Minister ensure that quangos handed back to the Government do not generate more costly parliamentary questions?
Mr Maude
The number of parliamentary questions generated is not a matter of where functions sit within government, but generally a matter of how many questions my hon. Friend and other colleagues in the House ask. If bodies become more democratically accountable through the House, they will be subject to more parliamentary questions—by definition—but it seems to me that that is a good thing and not a bad thing. That is what accountability is about.
Tristram Hunt (Stoke-on-Trent Central) (Lab)
Now that the much-vaunted bonfire of the quangos has turned into a clammy Sunday afternoon barbecue, may I congratulate the Minister on his plans for British Waterways? He seems to be taking exactly the right approach, but we await information on the allocation of property assets.
What do the Government plan to do with the National Endowment for Science, Technology and the Arts? May I also urge the Minister to encourage his right hon. Friend the Work and Pensions Secretary to hurry up in sorting out the future of the Independent Living Fund, because that is causing real concern to my constituents?
Mr Maude
I am sure my right hon. Friend the Work and Pensions Secretary will have heard the hon. Gentleman’s last point and I know that he is addressing the matter with urgency. I welcome the hon. Gentleman into the big tent as far as the British Waterways Board is concerned. That is a good route to follow.
The hon. Gentleman also asked about the future of NESTA, which will become an independent endowment outside the Government. When the Bill that set it up went through the House, I was the Opposition spokesman, and I urged that it should be set up as a wholly independent endowment that is outside, and not in any way subject to the whim of, the Government.
Mr David Nuttall (Bury North) (Con)
Although I welcome the proposal for a triennial review of the remaining quangos, can my right hon. Friend confirm that if it becomes clear that a quango no longer serves a useful purpose, it will be abolished immediately, without waiting for the completion of the three-year review?
Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)
Going through the list of quangos in the Department of Health, I can see the logic of pooling some of their regulatory functions. However, the Human Fertilisation and Embryology Authority provided more than regulatory functions; it also provided the forum for some very tricky ethical debates, without which the previous Parliament would have been unable to pass some of the legislation on such matters, because debates would have polarised along political or religious lines. Can the Minister assure me where that function of that authority now lies? Will he reconsider that change? The Health Secretary will have heard that as well because he has just arrived in the Chamber.
Tony Baldry (Banbury) (Con)
As my right hon. Friend will know, the Oxford canal goes right through the heart of my constituency. Waterway users generally will welcome the opportunities provided by the setting up of a new waterways trust. However, the hon. Member for Stoke-on-Trent Central (Tristram Hunt) made an important point when he asked what happens to existing British Waterways assets. Will they be transferred to a new waterways trust? Presumably, in this as in any other aspect of my right hon. Friend’s statement, Secretaries of State for the Departments concerned will be willing to answer written parliamentary questions about the detail of such matters. The changes provide an enormous opportunity for civil society to engage in the running and maintenance of our waterways.
Mr Maude
My hon. Friend is completely right on that. Secretaries of State will indeed be willing to answer detailed questions on exactly those issues. On many of the changes, complicated questions arise on the ownership of assets and where they will end up. The public bodies Bill will provide a power by secondary legislation to deal with asset distribution, and I am confident that my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs will have heard my hon. Friend’s concerns about British Waterways Board assets.
Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)
I have heard the Minister say a number of times that if something is important, Ministers ought to take decisions on it and to be accountable. In that context, does he believe that consumer protection and a consumer voice are important? If so, why has he chosen specifically to abolish Consumer Focus and to transfer its functions to Citizens Advice? The latter is a worthy organisation, but it surely has enough to do in coping with the increasing demands for advice that result directly from the Government’s welfare reforms.
Mr Maude
The short point is that citizens advice bureaux carry a high degree of trust with citizens. They exist locally and are well supported, and they manage to mobilise very large amounts of voluntary activity. We must get away from the slightly outdated idea that to show that we care about something very much, we must set up a quango to express it.
Priti Patel (Witham) (Con)
Will the Minister join me in welcoming the complete abolition of the Union Modernisation Fund Supervisory Board, which wasted hard-earned taxpayers’ money holding secret meetings in expensive hotels? It effectively handed taxpayers’ money to the trade unions. Will he give an assurance that he will take action to prevent such abuses of taxpayers’ money from happening in again?
Mr Maude
We have not taken a decision on the future of the Union Modernisation Fund itself, but my hon. Friend raises genuine concerns about the way in which the supervisory body operated. In the previous Parliament, I asked a number of questions about the publication of its minutes, but somewhat to my surprise I discovered that no such minutes were kept. That is the epitome of unaccountability and lack of transparency, which is exactly what I am seeking to address.
Mr Kevan Jones (North Durham) (Lab)
The decision to strangle at birth the chief coroners office will be viewed with dismay by many organisations, including the Royal British Legion, which campaigned for it to improve the coroners service. Can he explain why the Opposition supported the proposal during consideration of the Coroners and Justice Act 2009, but now they are in government they wish to abolish the office?
Dr Sarah Wollaston (Totnes) (Con)
I am looking forward to warming my hands in front of the bonfire of the quangos, with 192 on the flames. Can my right hon. Friend confirm how many quangos were abolished under the last Administration?
Mr Maude
I have learned to treat the claims made by the last Government with some scepticism, because they often claimed to have got rid of things, but on closer scrutiny they turned out to be merely resting, not defunct. I do not know whether this is a bonfire or, in the term used by the hon. Member for Stoke-on-Trent Central (Tristram Hunt), a damp Sunday afternoon barbecue, but we should not knock barbecues.
Mr Andrew Love (Edmonton) (Lab/Co-op)
The Minister talked, both in his statement and in answer to questions, about exorbitant pay in quangos and the public sector. Would it not add force to his argument if he and his colleagues also talked about exorbitant pay in the private sector? On the transfer of employees from quangos back to the public services, I seek reassurance that their pay and conditions will be protected in that process.
Mr Maude
There is a bit of a difference between pay in the private sector and pay in the public sector—[Interruption.] The fact that the hon. Gentleman finds it difficult to make the distinction tells us a lot about the mentality behind the last Government. In the public sector, it is taxpayers’ money that is being spent and Ministers have a responsibility to ensure that it is well spent. The fact that they did not is one of the reasons why we are now facing the scale of budget deficit that we are. The transparency that we have applied to pay in the quangos has meant that people have been shocked to find out how profligate some of the pay has been.
On the transfer of staff into the civil service, the terms and conditions will of course be transferred according to the TUPE rules, as the hon. Gentleman would expect.
Henry Smith (Crawley) (Con)
In a previous existence, I was a leader of a local authority, and three things got in the way of effectiveness—an increasing lack of democratic authority; an over-burdensome inspection regime; and a lack of funding. All three of those problems often stemmed from the existence of far too many quangos. I seek an assurance from my right hon. Friend that functions presently carried out by quangos that are to be abolished will be devolved to the local level.
Mr Maude
Wherever possible, that is our preference. We believe in localism and in trusting local authorities to take responsibility for what they do. Our commitment to localism does not only mean devolving to local authorities. In the case of consumer functions, for example, we think that devolving beyond local authorities to citizens advice bureaux is potentially a better approach. However, I can confirm our preference to devolve powers to as close to the front line of where citizens use services as possible.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
Does the proposal to abolish Consumer Focus and transfer its functions to citizens advice bureaux mean that in the coalition’s big society a consumer and a citizen are one and the same thing?
Stephen Barclay (North East Cambridgeshire) (Con)
Current legislation requires Departments to get the best possible price for Government assets such as furniture, computers and other items. As part of the big society agenda, will the Minister consider whether donations could be made or other disposal routes used to support voluntary organisations, charities and other bodies that are being squeezed at the moment and could make good use of those resources?
Madam Deputy Speaker (Dawn Primarolo)
I thank hon. Members and Ministers. A great many Members managed to ask short pithy questions on the statement and the answers were also short.
Public Bodies Reform
Lord Maude of Horsham Excerpts(14 years ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
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(14 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
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(14 years, 1 month 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(14 years, 2 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(14 years, 4 months ago)
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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(14 years, 4 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(14 years, 4 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(14 years, 4 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