Public Administration Select Committee
Oral evidence: Citizen and Public Services, HC 800
Tuesday 17 March 2014
Ordered by the House of Commons to be published on 17 March 2014
Members present: Mr Bernard Jenkin (Chair); Paul Flynn, Sheila Gilmore, Kelvin Hopkins, Greg Mulholland, Lindsay Roy, Mr Andrew Turner
Witnesses: Rt Hon Mr David Laws MP, Minister of State, Cabinet Office, and Rt Hon Mr Oliver Letwin MP, Minister for Government Policy.
Q323 Chair: Welcome to this final evidence session on citizens and public services. It is a great pleasure to welcome two Ministers to our Select Committee today. I believe this may be the first time that we have had a Minister from both sides of the coalition represented, and I think that is admirable. Could each of you identify yourselves for the record, please?
Mr Laws: Yes. I am David Laws, Minister of State for Schools and Minister of State in the Cabinet Office.
Mr Letwin: I am Oliver Letwin, Minister for Government Policy.
Q324 Chair: Could you just distinguish, for the public record, the distinction between your two Cabinet Office roles?
Mr Laws: Yes. As I have explained, I have two different ministerial roles: one in the Department for Education and one in the Cabinet Office. The one I have in the Cabinet Office is described as—and excuse me if I cheat by reading the ministerial list of responsibilities—supporting “effective coalition government working and policy development working with the Chief Secretary […] and the Minister for Government Policy”. It means working across the coalition, particularly on domestic policy issues—things like the mid-term review, the fourth session legislative programme and public services.
Q325 Chair: I think that, by juxtaposition, explains your role.
Mr Letwin: It explains part of my role, in the sense that I am the mirror image of David and, for that purpose, Danny in the coalition discussions, but, because I do not have another role, unlike both of them, the rest of my time I spend on a combination of implementing, or trying to monitor the implementing of, our various policies and various kinds of troubleshooting, depending on what the Prime Minister happens to want me to do on any given day of the week.
Q326 Chair: Would it be fair to surmise that, were this a single-party Government, there may not be a need for two Ministers in this role? That is not a criticism; it is just a fact.
Mr Letwin: I think that is fair.
Mr Laws: I think that is right. Oliver’s would be the formal Government role and there would be less need for me with my Cabinet Office hat on, because I am largely there to make sure things are coalitionised.
Chair: Very good. We have a lot of questions to get through. We will keep our questions as short as possible. If I may ask you to give crisp and short answers, I would be extremely grateful. If I do feel you are going on a little bit too long, I will say so and ask you to bring your remarks swiftly to a point. If you can make your answers a swift point anyway, that would save me the trouble. Thank you very much.
Q327 Kelvin Hopkins: What measurable impact has the Social Value Act had? I have to say that on this agenda I am a fairly profound sceptic, so I will need convincing. Could you perhaps tell me about the Social Value Act and, secondly, what difference the Public Service Transformation Network has made to public services so far?
Chair: Shall we deal with the Social Value Act first?
Mr Letwin: I have no way of measuring what the exact impact of any Act is. It seems to me generally beneficial that we should concern ourselves with the social value of what we are doing.
Mr Laws: I would say that I am less sceptical than you are but it is very early in terms of seeing the impact of this Act to be able to assess how successful it is going to be, in both areas that you have mentioned, including the Public Service Transformation Network. Both of these things are at quite an early stage. We would be over-reaching ourselves if we claimed too much at this early stage.
Mr Letwin: Shall I move on to the Public Service Transformation Network? I agree with what David was saying, that it is early days, but it is possible to say exactly what it is meant to achieve, which is relatively modest but nevertheless significant, namely that, where particular authorities and agencies in one part of the country have found a way of working together to solve particular kinds of problems more efficiently and more effectively, they can communicate with others in other parts of the country who have done different things and learn lessons from one another about what is going on, and what has worked and what has not worked. We are very strongly in favour of localism, but that does not mean that people should not learn from one another around the country and try to get the benefit of all being in one country. That is what the Public Service Transformation Network is meant to achieve; it is a place for bringing people together who have experimented with different things for them to swap notes.
Q328 Kelvin Hopkins: We saw in Sheffield some advances they had made there, but I think they were locally generated, perhaps by the local authority. Andrew Haldenby, Director of Reform, the think tank, told the Committee that there was an “absence of a lead” from the Cabinet Office in this agenda and that if anything it had “probably held things back”.
Mr Letwin: Sorry, in which agenda?
Kelvin Hopkins: Public services transformation and the Open Public Services agenda. Andrew Haldenby of Reform told us that he thought that there was an “absence of a lead” and that in fact he thought, if anything, the Cabinet Office had “held things back”. How do you respond to that?
Mr Letwin: Broadly, I think that is complete nonsense. The Cabinet Office is not there to lead. Each public service has a particular Ministry or Ministries that are mainly responsible for it. In a moment, David might talk about public service transformation in the Department for Education. Clearly, the Department for Education is in the lead on public service transformation so far as schools, for example, are concerned, so it would be absurd for the Cabinet Office to try to supplant the relevant Department or Departments. However, I can testify personally to the fact that the Cabinet Office—namely David and myself—have spent a very considerable amount of time, and have been well served by Cabinet Office officials in spending a very considerable amount of time, trying to find out what is going on and the extent to which it implements the commitments in our programme for government.
We use the business plan method of doing that, which I have discussed previously with this Committee. We also hold special meetings with particular groups of Departments and individual Departments to check where they are in the Open Public Services agenda, and if we were not doing that, no doubt Departments would nevertheless be moving in the general direction that they are moving in, but I am sure that it would be less energetic across Whitehall than it is. Andrew Haldenby is an admirable advocate of radical and immediate reform, not to say revolutionary transformation, and no doubt he would like us to do more, but the idea that we are not playing a useful role in pressing forward an agenda which otherwise would be moving more slowly is nonsense.
Mr Laws: Yes. If I can just add very briefly, I would be disturbed if the Cabinet Office was having to drive a lot of this, because it would imply that the Ministers that the Prime Minister and the Deputy Prime Minister have put in place do not buy into this whole agenda, and they do. The objective of the Cabinet Office is firstly to create an infrastructure and approach to this area of public service transformation, and also it is in some areas to remove blockages that might get in the way of Government Departments moving in this direction. Occasionally there is a bit of stimulus. The Boyle review came up with a number of different ideas in which public service choice could be enhanced, and that was a bit of a challenge to the Cabinet Office but also to individual Departments.
Q329 Kelvin Hopkins: We understood that the Cabinet Office had a co‑ordinating role to make sure that policy across Government was consistent, rather than just exploring what they are doing and reporting back. It actually has a positive leadership role as well as overlooking what Departments are doing; is that not fair?
Mr Letwin: No. Perhaps it is worth explaining how this Government operates. It is probably the clearest operational model that any Government that I can think of in the recent past in Britain has had. We came to a coalition agreement, which resulted in a coalition programme for government that is absolutely transparent; you can see it there. Subsequently, David and I negotiated an update to that; that is also transparent—a mid‑term review. Those have both been translated into business plans. It is then for Departments to fulfil those business plans. That is the way this Government operates. What the centre tries to do—and that applies to the Prime Minister, the Deputy Prime Minister, the Cabinet Office and, to a degree, where it is relevant, the Treasury as well—is to make sure that this Government sticks like glue to that programme for government and its sequel, the mid-term review, and implements the business plans accordingly.
It is for Departments to get on and do the doing, and it is incredibly important that we do not lose that. If you ever deprived Departments, just as David was saying, of the responsibility for fulfilling the policies that fall to them, you would end up with a terrible mess on your hands in which the Cabinet Office or somebody at the centre was trying to run every part of Whitehall in place of the Departments. That would be a nightmare and would be wholly ineffectual.
Q330 Kelvin Hopkins: The first areas that are supposedly championed by the Public Service Transformation Network were announced in July. How are you going to measure the success of these particular initiatives?
Mr Letwin: The measure of success in every case is the combination of the effectiveness of the delivery of public services—whether they achieve the goals that they are there to achieve in terms of social outcomes and economic outcomes—and, on the other side, the cost with which they are delivered. The aim of this Government, unsurprisingly and uncontroversially, I think—it seems to be the aim of most Governments—is to achieve the best possible public service delivery at the lowest possible cost. That is the measure.
Q331 Chair: From the Cabinet Office, it is quite difficult to transform public services, isn’t it?
Mr Letwin: It is impossible to transform them simply from the centre of Government. The role that the centre of Government can play is to keep pressure up on the Departments and, indeed, while we are at it, via the Departments on the much wider public sector and also local government.
Q332 Chair: That would corroborate the Haldenby view that the Cabinet Office is not there to lead; there is bound to be an absence of a lead if you are expecting too much from the Cabinet Office.
Mr Letwin: Yes. I understood from what was being said earlier that this was somehow intended as a complaint. It is not a complaint; it is in the nature of the case that the Cabinet Office cannot run the whole of Government and should not try to do so.
Q333 Chair: And yet the Government also says: “Our public services are being transformed. The old, centralised model of public service delivery was costly” and out of date. Everything is now more “innovative” and “diverse”. The “dynamic landscape”. “Individual choices” meeting “people’s real-life complex needs”. “Empowering communities.”
Mr Letwin: Yes.
Chair: Why is the Government entitled to claim any of the credit for this?
Mr Letwin: Because the Government is a whole. The Government is not the Cabinet Office. The Government is every Department and all the wider public sector. Incidentally, that is not just a claim about the actions of central Government; that is also a claim about what has been happening in local government as a result of the massive legislation that central Government has passed empowering local government. While we are at it, it is not just about central Government and local government and all the wider public services that that entails, but also about neighbourhoods and parishes and so forth, which we have also empowered. We have empowered people so that they take the action.
Q334 Chair: You refer to “huge strides” having been achieved.
Mr Letwin: Yes.
Chair: Name me three huge strides.
Mr Letwin: The creation of free schools and the huge programme of academies and university technical colleges that David could wax eloquent about for very long periods; the creation of a universal power of competence for local authorities and a huge range of other powers and rights for people all over the neighbourhoods; and the enormously important creation of the neighbourhood planning system, which, for the first time, transfers powers to parishes and neighbourhoods to determine their own destiny. If you want, I can go on for the next half hour with a list of many further things, but I am being brief and fulfilling your requirement to name just three.
Q335 Chair: I would be delighted if we had time. So you do not accept that the rhetoric of transformation of public services has got slightly ahead of the reality.
Mr Letwin: Absolutely not. It is a transformation. It is not a complete transformation. It is not a revolution. It is, as always in Britain, an evolution. There are many ways in which we could go further, but it has had an enormous effect. The existence of Police and Crime Commissioners gives democratic control; a whole set of rights for communities to challenge and bid and take over services gives whole new degrees of control; neighbourhood planning gives whole new degrees of control; the introduction of payment by results across a wide terrain changes the way in which we contract, and so on and so on.
Q336 Chair: But if you were in the Dog and Duck and you asked a regular citizen of this county, “How different does it feel, the way we have transformed public services?” what do you think he or she would actually feel?
Mr Letwin: It would be interesting to hear what David says about this, as there may be two political perspectives, but what I hope he or she would feel is two things. Firstly, in relation to all those public services that are and continue to need to be provided by central Government and its apparatus, I hope they would feel that it has either got slightly better or not changed at all, despite the fact that we have saved an enormous amount of money and removed 500,000 posts from the public sector. That is a major achievement, if we have managed to achieve it, as I believe we have.
Secondly, I hope, if they are in a neighbourhood where neighbourhood planning is going on, or if they have exercised the community right to build, or if they have taken the powers that we have given to parishes and neighbourhoods to challenge the way in which public services are delivered in their place, or any of the other things that we have given to individuals, like the right to choose their own school of a different kind in that place or to set up schools themselves, they would feel they had been empowered.
Q337 Chair: So you would submit that most citizens feel this change.
Mr Letwin: No. I would say most citizens, because they are still dealing with public services provided by central Government and its agencies, should feel either no change or only a slight improvement, despite vast reductions in expenditure and manpower. A few citizens, who are in the places where they have already exercised the many powers we have given to all citizens, should feel a transformational change in their degree of empowerment. What I hope is that over time, for example, rather than 900 neighbourhoods engaged in neighbourhood planning, we will have 9,000 or many more.
Mr Laws: I would agree with that. Breaking through to the man or woman in the Dog and Duck can be challenging during a period of time when there are very big things going on in the economy that are attracting attention, but there is a range of things that the Government is doing that would be noticed by many citizens, depending upon which services they are coming into contact with. Because the changes that we are seeking to make in public services cover a whole series of areas—not just choice, but accountability and fair access—there will be things that they will have come across in terms of public service reform that will hit different elements within that mixture of themes that we are developing. For example, I am very struck by the fact that now when I visit schools, I get not only teachers and head teachers talking about the pupil premium, which is part of our fair access policy for public services, but also it is something that has broken through to parents in quite a significant way. Some of these things have been picked up by members of the public even though the changes are only recent and even though there are a lot of other issues going on in the country at the moment that will be attracting the public’s attention as far as their relationship with Government is concerned.
Q338 Lindsay Roy: To what extent does the silo culture that remains in some Government Departments impede progress? Have you noticed a drag effect where they are still in a silo culture?
Mr Laws: I personally do not think that that has been an impediment. If you go to any of the major Departments that are responsible for delivering public services and you look at whether they buy into this agenda about choice, decentralisation and fair access, you will find that they do. Different Departments have different approaches and extents to which they enjoy cross-Government work, and some are more passionate and enthusiastic and some are less, but sometimes the ones that are least enthusiastic are most enthusiastic about this particular work and are doing most in relation to this work.
Q339 Lindsay Roy: Can you give us an example, then?
Mr Laws: It would be unwise for me to pick particular Departments. All colleagues will know that there are Departments that sometimes have more of a reputation for working across Government and there are some that have less of a reputation, but all Departments are very signed up to this agenda. You do not necessarily need Departments that are working feverishly across Government to do this. Sometimes the ones that are most focused on their policy areas and getting on with developing policy in line with these themes are the ones that are doing the best job.
Q340 Lindsay Roy: It may be unwise, but helpful. Are there still some Departments that have a very narrow culture that are resistant to the changes you are trying to introduce? If so, what are you doing about it?
Mr Laws: I do not think they are resistant. Oliver will have a better view than I will, because he has the bigger role in terms of Minister for Government Policy, but my sense is that all of the Departments across Government are very signed up to this agenda, and the reason why the Cabinet Office is not having to do the amount of intervention in these areas that Andrew mentioned might have been necessary in his evidence to you is that the Prime Minister and the Deputy Prime Minister have Ministers and Secretaries of State in place who believe in pursuing this agenda. If they did not, they probably would not be there and somebody else would be there in their place.
Lindsay Roy: Before Oliver answers, can I just say we have some evidence from local government that just says it is not happening—that that closed culture remains?
Mr Letwin: Let me answer in terms of one particular example, which I think is quite an interesting one because of its general impact, but which is also mission critical for the Government and, in fact, is of tri-partisan concern for Britain, namely the bringing together of adult social services and the health service. I think it is a shared view across all political parties at the moment that the National Health Service over the next decades is not going to be a sustainable enterprise unless we can keep more people out of hospital by keeping them better and keeping them at home, which is to their advantage but also saves us an enormous amount of money. As you will be very well aware, we have allocated £3.8 billion of health service expenditure specifically to combined activities of the clinical commissioning groups, the health and wellbeing boards and the adult services departments. These are traditionally very separate silos.
If you asked the question, “Are there still strong institutional vested interests at work and differences of culture?” the answer is there are, but it comes back to the Chairman’s question, “Is this transformational?”. There is increasing evidence that the allocation of this very large amount of money and the way that the Challenge Fund has been structured and the demand that people come forward with joint proposals to take forward, making sure that Mrs Smith stays at home as long as possible, that if she gets back home she does not go back into hospital and so on, with the health service and the adult services working together, is beginning to produce a real change in culture. That is a totem, in addition to being incredibly important in itself, of the kinds of changes in culture that are beginning to be brought. I am with the Local Government Association in believing that it would be nice if all these things were faster, but nevertheless it is a huge change to get those two, and many others besides, together.
Chair: That was a very long answer, but thank you very much.
Q341 Lindsay Roy: Is it not incremental rather than transformational?
Chair: Yes or no?
Mr Letwin: It is more transformational than incremental, though I accept that it is not the same as having a bloody revolution.
Q342 Chair: We have views on the way the Civil Service tends to behave. That is maybe not for this session, but I would observe that it is still very difficult to reward a Civil Service in one Department for helping deliver a programme in another Department. What do you think about that?
Mr Letwin: The Troubled Families programme is an interesting counter-example. There you have a programme that involves several different Government Departments and several different agencies on the ground—police, social services and so on.
Chair: Thank you; point made.
Q343 Mr Turner: It was said—this has been quoted already—“in releasing the grip of state control and putting power into people’s hands”. It seems to me we have a Minister who believes we should have our dustbins emptied once a week; we have a book that thick of rules for transport signs, and employees of local authorities have to fit any decision into one of these signs when you are walking along the street; and the absence for holidays has gone up five times in the last year because the Department changed the rules. Why are these things done at national level?
Mr Letwin: Perhaps we could each take part of that question. The answer is we still do too much at national level, but we do significantly less than we used to do. In that sense, this is incremental.
Q344 Mr Turner: We are going in the opposite direction in the case of school holidays.
Mr Letwin: There are cases in which there are things that we have decided centrally that were not previously decided centrally, and maybe David can speak a bit more about that particular example, but the general trend has been very strongly to allow more things to be decided locally and, indeed, to induce more things to be decided locally, incidentally not just by local government but much more importantly, even, by citizens and by local communities in their parish councils and neighbourhoods.
Mr Laws: Speaking for the schools Department, which is one of the ones that you have singled out, there are a lot of things we have done to devolve powers, as you know, to schools, and barely a day passes without us fending off some new request to impose some additional burden on schools. Occasionally there are policies that it makes sense to implement and principles that it makes sense to deliver across the country. I also, like Oliver, think, not least in terms of the localism agenda, that there is a lot further to go to expand it as far as many of us would like to see it go.
Indeed, until local authorities have a greater degree of financial independence from central Government, it is difficult for them to take on board completely that localist approach, both in terms of the powers that they have and also their mindset, because they are always looking upwards at central Government rather than looking downwards at their communities and fixing problems themselves. There is a lot more to do in that area in particular.
Q345 Mr Turner: Would you agree that perhaps head teachers are quite happy to look up and say, “How do I implement that rule?” rather than make the decision themselves?
Mr Laws: Some are, but most head teachers have embraced a more school-led schools system. That does not necessarily mean everything being done in an individual institution; it may well mean groups of schools working more closely together, co‑operating and sharing best practice, which may be far more effective than relying upon either central Government or local government to steer individual institutions. We have some way to go to make sure we have a school-led system that has the right balance between school autonomy and the ability of individual schools to work with others.
Q346 Mr Turner: Who is ultimately responsible for ensuring that citizens’ involvement in public services works? Is it the national Government or is it the local councils?
Mr Letwin: It depends entirely which public services we are talking about. There are particular public services where the responsibility for making sure that the new arrangements work correctly lies mainly with central Government; others where it lies at the level of traditional local government; and others yet where it lies much lower down the chain with communities. A large part of this agenda also depends on individual citizens and individual families being willing to step up to the plate and take responsibility for certain things as well. That is part of the drive here. We are not just trying to get to the point where different levels of government do things, but also where the citizen, communally and also in their own families, takes responsibility for things.
Q347 Mr Turner: Would you agree that it is not just two levels—national Government and local councils—but it is the third level as well, which is perhaps the most important?
Mr Letwin: Yes. That was a short answer, incidentally, Mr Chairman.
Q348 Mr Turner: Who is responsible for ensuring that central Government supports local services that cross the remit of different Departments?
Mr Letwin: Again, I suppose I would answer that it depends on which service. Let us go back to the case of the Troubled Families programme, which is a very important programme where there are many different agencies involved with the 150,000 most troubled families in Britain, who cause a wholly disproportionate part of total public expenditure to be spent on them, and who are responsible for a wholly disproportionate part of the crime, truancy and drug problems that the country experiences. There, the responsibility for making the thing work lies right at the top with someone called Louise Casey employed in the Department for Communities and Local Government to drive it, but the way we have driven it is by giving each local authority—counties, boroughs and unitaries—the financial incentive to get out there and improve the life condition of those people by certain specific measures: getting them not to truant so much; having not so much antisocial behaviour; and so on. That is a top-down-driven process, but one that uses financial incentives to get local government to produce the results. On the other end, if you ask who is responsible for ensuring that the free school founded in a particular place is successfully founded, it is for David to answer, not me, but I take it that that is much more up to the parents of the locality than anybody else.
Mr Laws: Yes, and the Department, which puts a lot of investment in. Even where some of these policy challenges cross central Government Departments and it is a matter for our lead, not local government’s, Departments are quite good in joining these things up across Government and there are lots of mechanisms, formal and informal, for making sure that those types of discussions take place. It does not just depend upon Ministers.
Q349 Mr Turner: Nationally it seems to me there are lots of examples where a city is given powers beyond its city by agreement with local authorities, or perhaps not even with agreement. What do they do with places such as the Isle of Wight, West Dorset, Cornwall and Somerset, where there are not cities? Who is going to lead those things? Why are they not leading them now?
Mr Letwin: I think you are referring to the City Deal programme. The City Deal programme, as its name suggests, is a programme about cities. There is also the Local Growth Fund programme, which is somewhat similar in structure, where the local enterprise partnerships are charged with the task of coming forward with a bid—a vision—for their whole area, and where the Government will hand them money if their vision is sufficiently exciting as a way of lifting that area’s economy.
Q350 Chair: But cities are inside LEPs as well, aren’t they? They are getting a double whammy out of this as well, aren’t they—speaking as someone who represents a rural area?
Mr Letwin: Yes, entirely intentionally, because the cities of this country are the main engines of our economy.
Q351 Chair: Come to the eastern counties. We have less public expenditure and more private-sector employment than any other region of the United Kingdom. We are driving the recovery.
Mr Letwin: I too represent a rural area and rural areas are also important, hence the local growth funds are not exclusively for the cities, but it is right, we believe, to focus particularly on the cities, because that is where most of the growth of this country lies.
Q352 Sheila Gilmore: I just wanted to follow up briefly on something Mr Laws said a few minutes ago, which was in relation to local authorities having their own finances. Is it not the case that the trajectory, both in England and, indeed, for longer in Scotland, with things like council tax freezes, is in entirely the opposite direction?
Mr Laws: Not necessarily. I do not say what I am about to say would be hugely welcomed by all local authorities, but there are some local authorities that, because the central Government grant has been cut or frozen recently, are seeking to raise more money from those areas that are more under their control locally. I can think of local authorities where the percentage of their expenditure that is locally financed, essentially, is going up quite a bit. I am sure that is not the vision that every local authority would want, because that involves some painful decisions for them locally, which are not always popular, but it seems to me that that type of trend, through whichever route, is one that we ought to be seeking to encourage in the future so that local authorities can take a greater degree of responsibility for these things themselves rather than constantly looking to central Government and central Government grants.
Q353 Sheila Gilmore: What you are really then talking about is charging, which tends to be directed very much at the people who need services most.
Mr Laws: It can be, but not all charging is necessarily regressive, and some of it may be a rational way of councils getting revenue in. This is going to be more of a potential solution in the short term for smaller authorities such as, in the rural areas, district authorities, whereas where you have larger authorities with particularly large budgets, they are much further away from that particular situation. You are always likely to need to have some kind of system to transfer money around the country so that areas that have high levels of disadvantage have a proper revenue base.
Q354 Paul Flynn: Mr Letwin, you said you have given parents the right to choose their own school. Is that a fantasy or delusion?
Mr Letwin: It is certainly not a fantasy.
Q355 Paul Flynn: Can I give you an example, as someone having been in local government since 1972, dealing with these problems of working out catchment areas and seeing how we can do it? Ten local schools: two of them have long been perceived to be better than all the others; perhaps one or two are seen to be worse than all the others. If you ask parents which school they want their children to go to, up to 80% will elect to go to the two popular schools. How do you deal with that?
Mr Letwin: Again, it may be sensible for David to comment on this, as it is his particular business, but as you asked me the question, the difference now is that those parents who feel that they are otherwise condemned to go to a school that they do not wish their children to go to have the ability to set up a free school.
Q356 Paul Flynn: I just asked a practical question.
Mr Letwin: This is a practical matter. There are—if I look it up—174 free schools now open. It is a practical matter.
Q357 Paul Flynn: And some closed, as we know.
Mr Letwin: Free schools represent a major advance in choice.
Q358 Paul Flynn: Can you tell me how you can give parents the choice of choosing their own school in practical terms, in your own local authority.
Mr Letwin: By giving them the right to set them up.
Q359 Paul Flynn: Okay. None of them are free schools; can I put it that way? How on earth can you give parents the right to choose their own school in practical terms?
Mr Laws: You can do it in three ways. Firstly, for the schools that are very unpopular, of which there are some around the country—and you said the ones locally are not that popular—where they are doing very badly genuinely, the Government and local authorities have to have a mechanism to intervene and, in an extreme situation, replace the governance and leadership of weak schools. Secondly, we need to make sure that some of the schools that are more popular are enabled, when it is practical to do so, to expand, rather than for there to be a mindset that there is a rigid control over places even when they are not very good. The third thing is we need to make sure that choices can be better informed. We are putting a lot more focus now as a Government on measuring schools by their progress, not just by their raw attainment. Sometimes—it may not be the case in your area—people think schools are good because they have good attainment, whereas the attainment is simply a consequence of the catchment area. We are getting away from that and we are giving parents better vehicles to measure schools by.
Q360 Paul Flynn: In the previous Tory Government, you had something called the popular schools initiative, whereby you gave £1 million to one school in my constituency and £500,000 to another that were seen to be popular. They were popular because they had a catchment area from the most articulate and richest parents. The ultimate result of a policy like that is that you have schools that are successful having more resources and running up, and the consequence at the other end is that you have schools that are running down. Is it not right, as Mr Kruger said to us, that the Big Society has been apparent in those areas that are rich and not in those areas that are poor where it can do most good?
Mr Laws: No, I do not think so. If you look at where our Department invests most resources in terms of school intervention—and it was the same under the previous Labour Government—it is in the schools that are weakest and that often serve some of the catchment areas that are most disadvantaged. Changing the leadership of poor quality schools is perhaps the best way that you can ensure that parents in the area are going to have a better‑quality school available, but also we can make sure that we do have a rational system of allowing schools that are high quality to expand.
Q361 Paul Flynn: If you had a rational system, would you not give more resources to the schools that are seen to be less successful, rather than giving them to schools that are the most successful?
Mr Laws: We are certainly giving a lot more resources to the schools that have the highest levels of disadvantage through the pupil premium, which has had a massive impact since 2010 in the most disadvantaged areas. Arguably, in some of them, we have layered that pupil premium on top of existing high levels of disadvantage funding, but we cannot simply say that the right way to deal with all school failure is to just spend more and more money. Sometimes, as I am sure you will agree, the problem is not money; it is an incompetent head teacher, poor quality governors or weak teaching in schools.
Q362 Paul Flynn: But you still maintain that you have given parents the right to choose their own school.
Mr Laws: We have enhanced that right by trying to intervene where schools are weak and we have given parents more information to make rational decisions. Are there still some parts of the country where there is not as much slack in the schools system as we would want in terms of allowing choice? Yes there are, and the fact that we have this massive bulge in the pupil population going under the way at the moment is an additional challenge, but we have taken a number of steps that have made the system better for parents.
Q363 Paul Flynn: The great promise of the Big Society expressed by the Prime Minister was that it would be “the biggest, most dramatic redistribution of power from elites in Whitehall to the man and woman in the street”. I do not see local councils gambolling round the maypole on the village green suffused with the joys of devolution. What has been your greatest triumph in this area, do you think?
Mr Letwin: It is not any one thing; it is the accumulation.
Q364 Paul Flynn: It is invisible.
Mr Letwin: You may think it is invisible, but it is enormous. During the previous administration, there was a pretty relentless progress towards centralisation; during this administration, there has been a very significant shift in power out to the localities, out to individuals and out to communities.
Q365 Paul Flynn: Surely this is part of your delusion. At the last meeting we had on one of these things, the people from Atos, Serco and the rest here were being attacked by the Member for Harlow, who is a member of your party, saying you created a new bureaucracy; you replaced a Government bureaucracy with a private bureaucracy who were behaving rather worse than the previous Government.
Mr Letwin: All I can say is that if you were in one of the 880—I think it is—neighbourhoods that are doing neighbourhood planning, or you were one of the sets of parents in the 174 free schools, you would think that that statement was false.
Q366 Paul Flynn: One of the examples you give of the joys of devolution is the setting up of police commissioners. In one area in my constituency, the electorate was so enthusiastic that not a single soul voted in one of the polling stations. In fact, only a total of 15% voted in the country. Are they not telling you what to do with your Big Society?
Mr Letwin: No. The fact of creating democratic accountability for Police and Crime Commissioners seems to me now well embedded. As it moves forward, probably more people rather than fewer will vote, but it is entirely for the citizen to decide this. On the basis that you are describing, you would also be advocating the abolition of traditional local government, which I think traditionally gets about 35% of the population participating in votes for it. The fact is democratic accountability matters enormously even if the turnout is low, because people have the right to vote, which is what people fought and died for, and we have given people that right so far as the control of their police force is concerned. That is a major advance in local accountability.
Q367 Paul Flynn: But are these ideas like power to the people not just vacuous aspirations? You have behaved like most other Governments; you start off blaming the last lot, then you blame the European Union, then you blame the civil servants, and now you are fighting amongst yourselves. As this Government is now in its death throes between the two of you—
Mr Letwin: This is a wonderful political speech.
Paul Flynn: I am just observing what is going on. The Government is in a state of paralysis, probably—certainly, if it is not paralysis, it is in a very deep coma, and nothing much is happening. What are we doing here?
Chair: I find the harmony between these two culprits perfectly chilling.
Paul Flynn: It would be better if you all packed it in and went away and re-thought what these impossible plans of yours were.
Chair: Your question, Mr Flynn?
Paul Flynn: Where is the Big Society?
Mr Letwin: Right here and alive and well.
Q368 Paul Flynn: Where?
Mr Laws: What I would say is that the Big Society is a good idea. In some ways it is not an entirely new idea, which was some of the evidence given to you; there are lots of people out there who already think that they have been doing Big Society things. There is a lot more we can do in this area to make sure that the services people receive are the services that they need and not just those that they are given by the state. We have only started to make a notable but modest impact on that. There is an awful lot further to go, and the Government and local government ought to be looking at how they can enable bodies that are keen to rise to this challenge because they are already involved in it to do a lot more.
Q369 Paul Flynn: I do not know if you remember a film called Harvey, where there was a man who was an alcoholic who had a friend that was a big six-foot rabbit that he could see but nobody else could see. Is the Big Society not very much like Harvey? It is one of these three-word gimmicks by Prime Ministers that will end up in a great pile somewhere, along with the cones hotline and the rest of them.
Mr Laws: No, it is a small rabbit eating a lot and getting bigger; it is not an invisible rabbit.
Mr Letwin: I would say it is an extremely large item that has existed for about the past five millennia, which has been encouraged and fostered to grow and to take more responsibility.
Q370 Lindsay Roy: We have been given numbers from Mr Laws about free schools and, Mr Letwin, you gave an example of 800. These are quantitative measures. Surely the real question is: how good is the devolution? How do you know?
Mr Letwin: You are absolutely right that in the end, if you look back on probably decades, as I hope it will be, of a shift of power away from the centre and out to the localities and away from input decisions by central Government and towards measurement and payment for outcomes and so on, the $64 billion question is: have the public services got better? Are they more responsive to what David was rightly calling the particular needs of particular people and particular communities? Are they more efficient in economic terms and hence more sustainable within the fiscal accounts? That is what in the end is the measure.
Q371 Lindsay Roy: It is a “so what?” question.
Mr Letwin: In the end, it is not particular actions and the numbers of kinds of things that are created; it is, as you rightly point out, the effectiveness and efficiency of public services that matters.
Q372 Kelvin Hopkins: Mr Letwin was talking about democratic accountability. We have democratic accountability at the local level in local authorities, but it seems to me—and you might deny this—that successive Governments, including Governments on my side, have done everything in their power to try to skirt round local authorities, to diminish their role, and to give power to other organisations, often private organisations. At the same time, we talk more about delegating to communities. What are these communities? Are they a street, a town, a village, a self-appointed group of people from a particular locality? What are these communities?
Mr Letwin: The first point I make is that this is a Government that has—and I agree with David; not enough yet—made it much more possible for local authorities to make their own decisions; for example, by handing over the business-rates revenue to local authorities so that they have a much larger source of funding of their own, by giving them the universal power of competence, and so on. These are very important shifts, giving local authorities for the first time directionally for a long time more rather than less power.
Then you come to the question of, “What is a community?” There is no doubt whatsoever that my own village of Thorncombe is a community, in the sense we get together, we founded a village shop together and there are—I do not know what it is—20 or 30 different societies that we have just for the village. That is recognisably a community, and if you asked people, “Where do you come from?” they would say, “I come from Thorncombe” before saying “I come from England” and then “I come from Britain”.
If you are talking about our cities, where there is much less by way of a formal community-level governmental structure—there are not parish councils, for example—the creation of a sense of community, perhaps, for example, through an estate and its community hall, which they are often called, allowing it to create a neighbourhood forum and then allowing it to transform that neighbourhood forum into an urban parish, is the beginning of a movement towards a greater sense of community in cities. I wholly welcome that. It has a long way, as David has been saying, to go before people fully feel, not in the villages of Britain but in the cities and the suburbs of Britain, that they are part of an identifiable local community.
Chair: We must move on; we must move with a bit more dispatch. There is likely to be a division shortly. I am afraid we will have to come back after the division, because we are not making fast enough progress.
Q373 Greg Mulholland: Could I ask you about accountability, which is something that all of us would want to see more of? Certainly the Government have very much said that that is something that the coalition Government wants to see. Just to quote from the written evidence that you have provided us with, it says: “Through empowering citizens we have given them a voice through which they can drive the improvements in public services and ensure public services are accountable to the people who use them”. I am sure we would all agree with that sentiment and that aim. Can you tell us that that is happening, and can you give us specific examples to show that it is?
Mr Laws: Yes. I would say that we have things like the Friends and Family Test in health and, in education, Parent View in the schools system. Those are direct attempts to allow people who use public services to feed in their views. You have to do that very carefully to make sure that the information cannot be distorted by little groups. You have to make sure that the information you are putting out is accurate and helpful and does not have unintended consequences, but that is one way of very directly feeding people’s views in.
Q374 Greg Mulholland: Are there any other examples you would like to add?
Mr Letwin: Yes, but let me first just amplify that point. Let me take the case of health. It is not just that we have given patients and staff the opportunity to take a view; we have, through the way that the CQC now operates, made sure that that view, where it forms, as David says, a pattern and is not just one person making a complaint of some kind, alerts the CQC. If they see the Friends and Family Test for a particular hospital is going wrong, they will come in and do a full inspection. The thing is accountable to its patients and its staff in the sense that they can trigger a real thorough professional look at why the service is not performing in the way that the patients and staff expect, so it is a transformational thing.
Let me go back to the Police and Crime Commissioners, where there is a different kind of accountability. You cannot, unfortunately, give vouchers to criminals to choose which police officer to be arrested by, and you cannot really operate a friends and family test style thing very effectively, but what you can do is have a judgment by the local population based on crime maps where they can see what is happening—going back to the question of what a community is—in their neighbourhood and their street, and then they have the right to vote. Previously, they did not know who the police authority were—they had probably never heard of them—they had no crime maps, they had no information on their own street and their own neighbourhood, and they had no real power. I am not saying that we have changed everything as much as one would like to change—I agree with David; there is more to go—but that is a very big transformation in the degree of accountability.
Q375 Greg Mulholland: How would you respond to the criticism that we had in evidence in January from Andrew Haldenby, the Director of the think tank Reform? He said that he believed there was “absolute confusion” around accountability in public services. The example that he gave to us was in education, saying that with academies it is the head teacher who is accountable and that in other schools it is Ministers and the Department for Education who are accountable for the curriculum. He told us that he believes that this lack of consistency is something that is reflected in other Departments. How do you respond to that criticism?
Mr Laws: Personally, I would like to see as many of these decisions devolved downwards as possible to, in the case of schools, all state-funded schools unless they are incapable of discharging those responsibilities because they are in special measures or something, and then we should have a similar structure for holding all schools, or all public service groups, to account. Some of the devolution that we have had in the past has extended powers to particular hospitals or schools or public sector entities, but the logic of it is that eventually you want to extend those powers to all of the similar entities and then hold them to account in a consistent way.
Q376 Greg Mulholland: Do you think there is any concern with the notion, as positive as it may be or may sound, of pushing that accountability to a lower level and then undermining the doctrine, as it still exists, of ministerial responsibility? Are Ministers still ultimately accountable in the same way? Will they accept responsibility, or is there a danger that Ministers will say, “Well, actually, it is not down to us. It is down to head teachers or police commissioners. It is nothing to do with us”?
Mr Laws: We have to be really clear that in each area of the public services we have an accountability system that does have that clarity, where the role of central Government is clear, the role of the inspectorates is clear, the role of local government is clear and the role of the individual entities is clear. Sometimes in the past either those responsibilities have not been clear or the way in which we expected accountability to operate and improve service standards has not worked. For example, a couple of you have touched on this issue of schools and local authorities. The reason that successive Governments have intervened to try to drive improvement is that in the old system, presumably, failing public services were supposed to be an issue in election campaigns that politicians would respond to and then do something about, but in large parts of the country that did not happen; therefore, Governments decided to intervene to impose solutions on local government. We have to sometimes think about ways in which we can make local government work more effectively by making sure that the performance of local government itself is more transparent. The work that Sir Michael Wilshaw is doing in inspecting the school-improvement functions of local authorities is a good example of dealing with an area that did not work very well before through democratic accountability.
Q377 Greg Mulholland: This was very much part of public services with the previous administration so certainly is not just relevant to this one, but with the large amount of public services now being done by private companies on contracts, particularly those very large firms—clearly Capita and, most unhappily, Atos have been in the public domain recently—to what extent are companies like that accountable? Does that fit with the Government’s Open Public Services agenda?
Mr Laws: They are very definitely accountable. When things happen that mean that they are failing the Government and the taxpayer, they have to be held to account, sometimes in quite a blunt and brutal way. We have been challenged about the degree to which we can have more transparency in some of those relationships between the private sector and Government, and that is something that Government is reflecting on at the present time. We think that there should be as much transparency as possible, provided it does not go beyond the point where it would damage our ability to engage some of these entities. They will often do the job very effectively, but, where they do not, we must be able to come down on them pretty toughly.
Q378 Chair: Does the real test of accountability not really occur when something goes wrong? How do you think we should deal with the fact that if a local authority really goes wrong, then Ministers are required to intervene, but if a public contract goes wrong with a major contractor, then Ministers tend to just blame the contractor rather than take responsibility for how the contract was let or how the contract was managed? Is this not a fudge of accountability rather than real accountability?
Mr Laws: No, because I think Committees such as your own would hold Ministers and Departments to account very rigorously.
Q379 Chair: That suggests even though there may be an attempt to create a distance between the Minister and the accountability for the delivery of a service, in the end it comes back to the Minister. I think of Ed Balls sacking the Haringey Social Services chief; I think of the Secretary of State for Health having to take responsibility for what went wrong at the Mid Staffordshire hospitals. In the end, ministerial accountability reasserts itself.
Mr Laws: It does, but whether the Minister is held personally to account for the disaster depends upon the connection between the area of ministerial responsibility and the end result.
Q380 Chair: So you think if there is a real, complete disaster, the Minister can still say, “Well, actually, it is nothing to do with me.”
Mr Laws: The extreme example is back in the 1980s, where somebody broke into Buckingham Palace and ended up in the Queen’s rooms, or something, and the Home Secretary, as I recall, offered his resignation. Nobody thought necessarily, without a clear connection between his policy failure and this person getting in, he should have resigned, and he did not. Had he taken some decision to strip Buckingham Palace of police protection, he might well have ended up with that responsibility.
Q381 Chair: Forgive me; that is a clever answer, but rather a distraction. How do you resolve the conflict between wanting to delegate authority but in a crisis ministerial authority tending to be reasserted? Does that not in the end rob the service provider, be it a local authority, a contractor, a charity or whatever, of the ultimate responsibility for outcomes?
Mr Laws: Oliver is going to see if he can do better than me.
Mr Letwin: You are raising a very deep issue, and one I have spent quite a lot of time thinking about over the last 10 or 15 years. It is perfectly clear that no elected Government of the United Kingdom can avoid, ultimately, responsibility for the state of the United Kingdom. It is going to be judged at an election by the people according to the results for them of its term in office. There is no way you can avoid that. I do not think that means that you need to supplant all the proximate responsibilities that people have within our society, our free market economy and so on, by a Government action. At moments of enormous crisis, the Government may be held responsible for certain parts even of the free market that are way outside the public services terrain. Think of the banks. When the banking crisis occurred, it was impossible for the Government of the day to step out and say, “Nothing to do with me, mate”. Questions were raised about the regulation of the banks and about the conduct of monetary policy and so on.
Sitting suspended for a Division in the House.
On resuming—
Q382 Chair: Minister Letwin, you were explaining how you had thought about this matter of what I might call migratory accountability a great deal, and then you started referring to general elections. What I am asking about is what happens in a crisis and how that then influences what happens on a day-to-day basis when there is no crisis. If the reflex of our political system is to put Ministers in charge of almost anything in charge of a crisis, how can we make devolved authority and devolved public services truly accountable to their users and to local authorities, rather than to Ministers?
Mr Letwin: My answer is that, because you can never deprive the electorate of making the Government of the day answerable for the condition of the country as a whole, there is always the problem that you outline. I think “migratory accountability” is a very good phrase. There is an element of it that will always go on, but by not intervening all the time, and indeed not intervening most of the time—in fact, by not intervening almost any of the time—Government can make a huge difference to the extent to which day-to-day accountability lies elsewhere rather than in the hands of Government. It is not a question, in my view, of total transfer.
Q383 Chair: I accept that, but what do Ministers need to do in order to manage that devolved relationship so that there is confidence between the Minister and the devolved public service?
Mr Letwin: Partly what Ministers need to do is to be willing to say things most of the time, or almost all the time, that make it clear that they think that the other party—the lower level; the community, the local authority or, indeed, the private operator, or whatever it may be—does bear responsibility.
Q384 Chair: I have heard that. That is interesting, but the point here is that there is tacitly a degree of engagement between the Minister and any public service.
Mr Letwin: Or any private service.
Chair: Or, indeed, any private service, yes.
Mr Letwin: Or any other aspect of the country.
Chair: I think one can take it too much to an extreme, but there has to be, therefore, an engagement between Ministers and, say, public bodies or regulators or devolved public services. There has to be a degree of engagement. How is that engagement to be managed?
Mr Letwin: There has to be a degree of engagement between Ministers and the whole of the country, and it has to be managed on the basis of almost all the time respecting the fact that the party you are talking to is independent. There will be times, nevertheless, when the crisis is so great that Ministers will be held accountable for what happens and that they will have to intervene. They have to try to make sure that that is very, very narrow in scope and that they do not turn that into an excuse for running everything all the time.
Q385 Chair: That sounds to me like an act of disengagement—an act of decoupling.
Mr Letwin: No. It is a constant engagement, but a recognition during that engagement of the independence of the party with whom one is engaging, just as to a private firm, or a public one.
Q386 Chair: What form does the engagement to which we are now both referring take?
Mr Letwin: Very often it takes the form of discussion. If we are trying to persuade private industry to do something, or we are trying to persuade independent local authorities to do something, there are two modes. You can adopt a Stalinist attitude of “We command” or you can adopt a modern attitude, as I would say, of respect and, nevertheless, a degree of persuasion.
Q387 Chair: How much does that also require a degree of mutual understanding?
Mr Letwin: It does require mutual understanding.
Q388 Sheila Gilmore: I just want to follow on from an earlier question before we move on, which was in relation to accountability of companies with whom the Government, or local government, indeed, might have contracted. How can service users and their representatives know if there is failure if they do not know what the terms of the contract are in detail?
Mr Laws: In most cases they will know it. If they are waiting for access to some service and the delays in accessing it are extraordinary, they are likely to raise it with their elected representatives and with the people delivering the service, and they are usually not slow in coming forward with their complaints. If it is some micro detailed aspect of the contract that is not something that the user of public services would be aware of—in other words, it is not a delay in access or something like that—it is possible that they could be unaware of it, but usually, where it is a big failure of a contractor, for example, it will be evident to the public, as it should be evident to the Government as well.
Q389 Sheila Gilmore: But in terms of knowing whether there is a failure of the contract, if that is what the contract specified, then there has not been a failure. Somebody might be dissatisfied, but we need to know more about what the terms of these contracts are.
Mr Laws: Yes, but if they were dissatisfied, they would presumably go to the contractor in the first instance and say, “This is absolutely absurd and ridiculous”, and if the contractor said, “I am very sorry; this is what David Laws contracted with us to deliver”—a three-month waiting time, or something like that—then I am sure they would come to us in Government very quickly.
Q390 Kelvin Hopkins: The Public Accounts Committee published this report earlier this year, which was about contracting out of public services to the private sector. It was pretty damning. It mentioned specifically G4S, Capita, Serco and Atos—in particular Capita, who they suggested should not be given another contract. We are talking about accountability to local communities. These companies are not accountable at all. They might jump if a Minister leans on them, but they will not do anything for local communities. I know it is going now, but constantly I have had to take up Atos with the Secretary of State for Work and Pensions. I have written on a number of occasions. Some people have been sacked from Atos as a result of going to the Secretary of State. Local accountability did not work; it had to be serious pressure from MPs and a lot of MPs complaining about it. That is the reality. The accountability is central; it is not local at all.
Mr Laws: It depends whether the service is democratically accountable locally or nationally, but I do not think it is only contracted-in bodies that can sometimes feel unaccountable and unresponsive; Government organisations and Government employees can often feel unresponsive to people who are using their services.
Q391 Kelvin Hopkins: Local government is democratically accountable. They are elected every four years. I find my local authority is responsive to me and to the councillors. These other companies are not under that kind of democratic local control.
Mr Laws: I am pleased that your local government is responsive. Sometimes local government has been passive or unhelpful. Sometimes local government is the commissioner of these contracted-in services. My point was that there may be occasions where there is a failure where it will be local government rather than central Government that will be the contractor of those services.
Q392 Lindsay Roy: Gentlemen, clearly the Government’s objective is to do things better and differently through engaging citizens. Can you give us specific examples citizen involvement in public services provided by Government Departments? Can you tell us how you know what the citizens want and how successful you have been?
Mr Letwin: Yes. Let me give you just one very striking example, which is personal budgets and direct payments in adult services and in health. If Mrs Jones is given what some authority thinks she ought to have, that is a very different position from one in which Mrs Jones is given control of some money and asked what she would like to have done with it in order to meet her needs. That is a transformation we have achieved.
Q393 Lindsay Roy: So that has been gleaned from citizen engagement.
Mr Letwin: No. It is giving real power to Mrs Jones. There are—let me just look this up—714,000 social care users who now have control over how the money delivering their social care is spent. They can decide how it is spent for themselves.
Q394 Lindsay Roy: Has there been an engagement, for example, with HMRC about how to do things better and differently?
Mr Letwin: HMRC is a different kind of entity from a service provider. HMRC is an authority that is taxing people; it is not a service provider. There is, nevertheless, an element of its activities that consists of its interface with the public, and what Francis Maude has been trying to do is to make sure that the interface through gov.uk with HMRC is a great deal more responsive and immediate. It is a different kind of thing from the choice that a person makes about how they are cared for, which is where we are giving them power. You cannot have power over whether you are taxed or not; that is an activity of the state.
Q395 Lindsay Roy: No, but you can have power over practice in relation to some of the procedures that are adopted by HMRC—the red tape and bureaucracy—and that would come from citizen engagement.
Mr Letwin: You cannot give the citizen power even over the procedures of HMRC, because HMRC is literally an emanation of the authority of the state, but what you can do is to make sure that, as you say, the bureaucratic interface between HMRC and the person who is paying their taxes is as unbureaucratic and as smooth and as effective as possible, and that is what we are trying to do in that domain.
Q396 Chair: Mr Letwin, are you saying that HMRC therefore does not need to listen to the members of the public it deals with on a day-to-day basis?
Mr Letwin: HMRC needs to take account of what it is told by members of the public about how easy it is to conduct business with them.
Q397 Chair: Would they not succeed in getting more people to pay their taxes if they were nice to people, for example?
Mr Letwin: That is a judgment that in the end they need to make. As you are well aware, I am concerned with the whole structure of making use of complaints so that if HMRC were to discover that, as a matter of fact, it would be pleasing more people but also collecting more taxes if it did X because it looked seriously at its complaints, that is something it should be doing.
Q398 Chair: Why is that not called “citizen engagement”?
Mr Letwin: It is a kind of citizen engagement. My point is that it is different from the kind of engagement you can have when there is a service that is not an emanation of the authority of the state. It is a really very different thing.
Q399 Lindsay Roy: Key question: have you engaged with the citizens about improving the service provided by HMRC?
Mr Letwin: You have to do it in a different way. You have to attend to the complaints that they make and to provide them with the greatest possible ease of using the Government interface.
Q400 Lindsay Roy: Yes, you have to. Have you done it?
Mr Letwin: Yes. I am personally reviewing the whole complaints process to try to make that happen, and Francis has been reorganising the way that the Government interface works so that when you go onto the website, you can deal with HMRC in an effective, efficient way and not have an unpleasant experience.
Q401 Chair: May I just interject at that point? We are in the late drafting of two reports on complaints and the Public Services Ombudsman. How are you preparing the ground in order to be able to respond to the publication of our reports?
Mr Letwin: I am at work trying to review the whole complaints process. It is work in progress.
Q402 Chair: How supportive are you finding Government Departments as you approach them about this question?
Mr Letwin: I find there is quite a lot of support for the idea. We have yet to discover just how much support there is for the practice.
Q403 Chair: How much do you sense there is a willingness to embrace the major cultural change that the public sector needs to embrace?
Mr Letwin: At the top, there is a great deal of willingness. As I say, I do not yet know what the answer is through the entire structure.
Q404 Lindsay Roy: Can you tell me what investment implications there are of greater citizen involvement in public services? I am not talking here just about financial. Can you give us an indication of how you have addressed these?
Mr Letwin: What kind of investment do you mean other than financial?
Lindsay Roy: Engagement of people themselves involves their time, energy and expertise, for example, and training.
Mr Letwin: It does, certainly, yes.
Q405 Lindsay Roy: What have you done to support that?
Mr Letwin: I do not think it is a question of supporting it; it is a question of making it happen. Let me go back to the case of personal budgets. We are taking a whole series of steps to try to make sure that right the way across all the social services departments every person who is entitled to a personal budget gets it, and that there is a proper discussion with them about how they want to spend it and not some attempt either to subvert this choice and power for the person or some negligent tossing of the money towards the person without properly engaging with them and guiding them and providing information for them.
Q406 Lindsay Roy: How successful have you been in engaging citizens who would not normally have been involved in the past?
Mr Letwin: It is a very major shift when people are given the power, for example, to determine their own care, and it is a great success to have done so. Inevitably, across many hundreds of thousands of cases, there will be better cases and worse cases of the way in which the person who was administering the personal budget dealt with the person who was receiving it.
Q407 Lindsay Roy: To what extent is there a major issue in deprived areas about engagement of citizens?
Mr Letwin: There is major issue in every kind of area. It matters particularly in deprived areas, because the more the problems of the area, the more important it is that the citizen should feel empowered to do something about it.
Q408 Lindsay Roy: Are you investing more in these areas than others?
Mr Letwin: Yes.
Q409 Lindsay Roy: Can you give us an example?
Mr Letwin: Yes. David was drawing attention to that a moment or two ago when he was talking about the pupil premium, which we have very specifically directed towards those people who come from disadvantaged backgrounds. The Troubled Families programme, which I was referring to earlier, is exclusively directed at those who have the most chaotic lifestyles. The Work Programme is very specifically directed at those who have been the longest unemployed, and so on. Most of this agenda is tilted towards trying to do the most for those people who need it most.
Q410 Lindsay Roy: Can I go back to the question I asked earlier: so what? What have been the outcomes?
Mr Letwin: The outcomes of each one of these programmes are things that are on the face of it. You can see what the Work Programme in a particular place has or has not delivered transparently; you can see to what degree people on drug rehabilitation programmes have been rehabilitated—it has moved up; you can see what has happened to crime in each area under Police and Crime Commissioners and crime maps; and so on and so forth.
Q411 Lindsay Roy: Has there been a consistent pattern, therefore, of improvement? That is really what I am getting at.
Mr Letwin: There has been very considerable improvement in many areas. I do not think that there has been any marked deterioration in any area. That is in the context of having to reduce very substantially spending on public services across a very wide area, with the exception of the health service, and reducing public sector manpower very substantially. It is a remarkable achievement that, when the public is asked how they judge public services at the moment, they judge them to be the same as or better than they were four years ago, despite the fact that we have been reducing expenditure. That is the measure.
Q412 Lindsay Roy: I think we all welcome success in any initiative. What are you doing about the ones that have not delivered?
Mr Letwin: That depends on which service we are talking about. If we are talking about a kind of service where there is a contract—it goes back to the earlier discussion—in contrast to the situation where a monopoly public sector provider is providing the service, it is possible to terminate the contract or to penalise the party that has misperformed the contract or to remove it from that provider and give it to another one. Where there is a school that is not performing properly, there is competition from other schools and, indeed, the ability to form your own. Where there is neighbourhood planning that is taking over from local planning, it is up to the local people and they have the power to do it. In a whole range of different areas, there are different mechanisms for dealing with things that go right and things that go wrong.
Q413 Lindsay Roy: Who assesses the success of these?
Mr Letwin: In the best and most important cases, the people who are themselves benefitting from the service. The very best situation—which we cannot achieve in every domain—is one where there is competition and where the individual can make a choice for themselves about how the money is spent and where it is spent so they get what they want, and if they are not getting it, they go somewhere else to get it. The question is: how do you do that to the maximum possible extent in a way that is also socially equitable across all the terrains where it will apply, and what do you do in cases like policing or the Work Programme or drug rehab where that cannot operate? There, we have devised other means, such as payment by outcomes.
Q414 Lindsay Roy: To what extent is it assisted self-evaluation and external evaluation? Is it a mix?
Mr Letwin: Where a service is being contracted by the state on behalf of the population, clearly there has to be independent evaluation, and that is what the National Audit Office and the Major Projects Authority and so on are all there to do. Where it is the individual citizen who is making a choice in a field where there can be competition, just as in any other domain of our lives, it is that individual and all the individuals that are making those choices who make the choice and hence determine which organisations and which providers survive and which fail.
Q415 Sheila Gilmore: Is there any scope for anything in between the individual and the services where you are suggesting you cannot have a choice? Is there a collective voice that can be heard, which gives people a chance to properly discuss and evaluate?
Mr Letwin: Yes. That is why I was also stressing communal services. We have a three-part structure here. There are those things where it is the individual family or individual themselves entering into a competitive terrain—schooling is an example; personal heath budgets, or social care budgets, is another—then, at the other end of the spectrum, you have these services that have to be contracted by the state. In between, hugely importantly, you have the whole terrain of the community: neighbourhood planning; community right to build; community right to bid; community right to challenge—a whole series of things where we have tried to give people collectively in a place more power.
Q416 Sheila Gilmore: That is fine in terms of that, but take something like the Work Programme, where the individual has no choice whatsoever. Is there a collective that could have a choice, which might, for example, be a representative group?
Mr Letwin: The right collective to have a choice over that sort of thing is the state, accountable to the people in a general election.
Q417 Mr Turner: Your solutions for schools only are effective in England. What is happening in Wales and so on in pursuit of your policies?
Mr Laws: Do you mean are they following a similar approach?
Mr Turner: Yes.
Mr Laws: No. On the whole, the approach in England is one that is seeking to empower and to liberalise to a greater extent. The accountability systems in Wales and Scotland are not as strong as those that we have in England. That is my sense. One of the benefits of having devolved policymaking is that you can trial different approaches in different parts of the United Kingdom and see the consequences of that.
Q418 Paul Flynn: We had very disturbing evidence at another Committee last week about female genital mutilation. Practical problems within my constituency are marriages through consanguinity—people marrying their cousins and having a large number of birth defects; not just arranged but forced marriages, where young 14‑year‑olds are sent off; and female genital mutilation. If you go ahead and say the supreme interest is parents’ right, parents will go to the schools where there are similar people from similar ethnic backgrounds. If that happens, then we will have schools that are populated by immigrants from the Horn of Africa, from Pakistan and from other countries. Are you not entrenching these barbaric practices, rather than encouraging the schools to be mixed, even if that is not what the parents want?
Mr Laws: I do not think so. The Secretary of State, as you know, has recently met with some of the campaigners in this area and suggested that he communicates with all of the schools in England about this; that he highlights the risks; and that he makes sure that all schools are aware of the dangers of this and are making sure they are doing what they can to identify any of these practices. There is a lot of cross-Government work going on in this work as well, with the Department of Health and others.
Q419 Paul Flynn: If you create schools where the ethos of the schools and the views of the teachers of the schools are that female genital mutilation, consanguinity and forced marriages are acceptable, you are doing a great deal of harm.
Mr Laws: These things are illegal—female genital mutilation—and there is no way that the Government is approving of that in any way. Indeed, we are going out of our way to make sure that people know that this is an unacceptable practice.
Q420 Chair: I am sorry; we must move on. I do apologise; we are going to keep you a little after 6.30, but we will be as quick as we can and, indeed, the shorter your answers, the quicker you will be away.
On the question of contracting with charities and community groups, you have rightly said we need more of this and you want to create “a truly level playing field between the public, private and voluntary sectors”. How well do you think we are doing?
Mr Letwin: I would say better, but not yet well enough.
Q421 Chair: Is a truly level playing field ever really going to be achieved?
Mr Letwin: It can be achieved, yes, but it is hard work.
Q422 Chair: What are the most important policy instruments the Government is employing to bring this about?
Mr Letwin: Often it is a question of shaping the market.
Q423 Chair: Can you explain that?
Mr Letwin: Yes. Let us take the case of the “rehabilitation revolution” that Chris Grayling is currently engaging in to replace the traditional, and failed, efforts to rehabilitate prisoners through the probation service. He has, in that instance, tried very strongly to ensure that amongst the bidders are groups with real expertise in this field who are, in many cases, very small voluntary bodies. He has tried to design the whole process so that they have the greatest possible ability not just to enter the field but to enter it in combination with others as prime contractors.
Q424 Chair: Do you accept that the generality of service commissioners—people letting contracts—are still tempted to focus on cost rather than social value?
Mr Letwin: There is always a tendency to forget the importance both of social value and of innovation.
Q425 Chair: Why is this?
Mr Letwin: Because there is always a tendency to engage in business as usual and to live by the maxim that no one ever got fired for hiring IBM.
Q426 Chair: How do you bring about the cultural change, which seems to be the most important thing you can achieve?
Mr Letwin: Partly by shaping the market where we are directly in control, and partly by a series of incentives where we are not. For example, Francis Maude has instituted the principle that 25% of Government procurement should be with SMEs.
Q427 Chair: But we are still in a situation where, even when Government bans major contractors for having performed very badly against contracts, very quickly they are let back into the bidding process because Government Departments appear to be addicted to large contractors. Do I need to name them?
Mr Letwin: I would not say that Government Departments are addicted to large contractors. Large contractors have a role to play, but we have taken a whole series of steps to try to encourage mutuals, SMEs and the voluntary sector into Government contracting, and have succeeded in doing so to an unprecedented extent. It is not yet as great as we would like to see it.
Q428 Chair: What is the incentive for a Government Department or the people within that Department to let lots of small contracts as opposed to one large contract?
Mr Letwin: For the time being, most of the incentive comes from the centre, where we put pressure on them to do so. Gradually, as they discover that a great deal of public service innovation comes from the voluntary sector and small businesses, they will discover what we believe exists, which is the value, not just in terms of its social value but in terms of the excellence and cost-effectiveness, of the service.
Q429 Chair: During our recent visit to Sheffield City Council, which I appreciate is not your direct responsibility, we visited the Terminus Initiative, which is a wonderful voluntary initiative that is also supporting a community project to bring together adult social care and the health service. That is working extremely well, but the Terminus Initiative itself is working on a very small contract from Sheffield City Council, and their contract is going to be aggregated with other contracts so that there is a much larger contract for the City Council to tender. What is your reaction to this?
Mr Letwin: I do not know the particular case, but we have been trying precisely to avoid, in central Government contracting, a movement in that direction, and to move in the opposite direction, of disaggregating contracts. That is why Francis has also instituted a system of trying to get smaller packages of contracting so there is more chance for the smaller contractors, including the voluntary sector and small businesses, to compete effectively.
Q430 Chair: Joe Fowler, who is the Director of Commissioning, said: “There is a direction of travel amongst commissioners, the council included, to where there will effectively be agglomerations and clusters”. I asked why and he said: “Because it allows you to enter into a higher level of outcome-based deal”.
Mr Letwin: This is an interesting example of how our attachment to localism conflicts with our attachment to a market in which there are many more diverse suppliers. The truth is it is always a balancing act. That is a matter for Sheffield City Council in that case, I assume, to decide. It must make the decision. So far as central Government is concerned, our direction of travel is very clearly towards greater scope for a more diverse set of suppliers.
Q431 Chair: While some progress is being made, the big contractors always seem to be back in the frame and they seem to be the low-risk option.
Mr Letwin: That is not the way I would put it. A huge amount of progress—an unprecedented amount of progress—in this direction has been made. No previous Government has gone anywhere near the extent to which we have diversified the market, but there is much progress yet to be made.
Q432 Chair: Finally, on the question of enabling charities to carry out delivery of public service goods, can I remind you of the various conversations we have had about Emmaus? We gave you notice that I was going to raise this. In our recommendation on the Big Society report, we said: “Attempts to open up public services to charities and voluntary groups may encounter […] difficulty” and “we regard the challenge to government presented by charities such as Emmaus as a litmus test of the Government’s Big Society project”. We added that we believed that “joint funds, managed by local authorities and financed by separate Departments, may be the answer. We expect the Cabinet Office to lead decisively on this matter.”
It appeared for a while that we might be going to make some progress on this. I would remind you that Emmaus has developed studies that show that, for a relatively small amount of capital investment, very large sums of public money can be saved by taking people off benefits, out of the criminal justice system, out of homelessness and out of mental illness, and we were all very impressed with the potential for Emmaus. You may recall also that you attended a meeting with Emmaus and me and the Housing Minister, the then Minister for Employment and a Health Minister to try to progress this. I had further meetings with the Cabinet Office to try to progress this, so that a charity like Emmaus could be brought into the payment-by-results framework. What progress has been made?
Mr Letwin: I had several meetings as well. The problem in the case of Emmaus is that it is extremely difficult to identify the outcomes in a way that would enable an outcome-based payment to be made. We can deal with that outside the Committee in more detail. I think you are aware of what has transpired.
Across the piece, the move towards community budgeting in local authorities, and also all of the payment-by-results schemes that we have produced, have indeed had the result that an enormous number of charities and voluntary bodies are now involved in one kind or another of rehabilitation, just as you mention. It is particularly difficult where you are dealing with cases in which there are not the measurable outcomes that enable an outcomes-based payment to work easily, and that is the particular problem with Emmaus.
Q433 Chair: Does that not suggest that there is a flaw in your model? If we can identify that savings are being made to the public Exchequer through the success of the—I think it is—23 centres that exist throughout the United Kingdom, we should be rapidly moving to the, say, 400 centres that there are throughout France because they have invested much more heavily in this kind of provision.
Mr Letwin: Unfortunately, it did not prove possible for them to identify, or for us to identify, sufficiently numerically for the Treasury’s purposes the savings. That is the whole problem.
Q434 Chair: No, I do not think that was the problem. The problem was that the Employment Minister wanted to put people on the Work Programme and pay by results for that; the health service found it difficult to pay by results for health; and it is very difficult to pay by results for keeping people out of the criminal justice system. These are public goods that a limited amount of public support would bring about. Are you not as disappointed as I am that we have not been able to make further progress?
Mr Letwin: I was disappointed, not least because both you and I spent a good deal of effort on it, but the fact is that each of the things that you are describing—getting people back to work; getting people back into the mainstream and out of crime; getting people out of all sorts of conditions and drug addiction and so on—are things that we are paying for by results with a whole range of providers. Unfortunately, the Emmaus model did not prove to be one where we could measure those outcomes in a way that would have enabled us to pay them by those results.
Q435 Chair: Is the problem not that this demonstrates how Whitehall still thinks in a siloed way and money is delivered through departmental silos when in fact it is very difficult to get someone to go back to work if they are mentally ill or if they have a drink problem and it is very difficult to take people off benefits if they have got into a pattern of criminal behaviour? The fact that these problems are very often related means that you have one or two or three or four different branches of Government dealing with one individual person, but they are all dealing with that person separately and therefore are unable to address that person’s problems on a collective basis. Is that not a problem that Emmaus seeks to address and that we ought to be assisting Emmaus in dealing with?
Mr Letwin: As, Chairman, you persist in pursuing the individual example, I have to tell you that I do not think that is the problem of dealing with Emmaus, no. The Troubled Families initiative does indeed deal with about six or seven different kinds of Government agencies that are dealing with the same families and brings them together, quite successfully, in measureable ways. There are all sorts of opportunities for bringing together Work Programme provision with IAPT, the treatment of mental illness, and also with rehabilitation—both drug rehabilitation and prisoner rehabilitation. Unfortunately, it has to be done on a basis where you can measure the outcomes in a way that will satisfy the Treasury that there is a saving. That is the problem that we encountered in the case of Emmaus. I do not think it has anything to do with silos; I do think it has to do with the measurability of the outcome.
Q436 Chair: But I sat in the meeting where one Minister after another said, “I can deal with that bit but not the other bit.”
Mr Letwin: Yes. Each one cannot deal with it, but we can put them together, as we have in Troubled Families and as we have in other cases. We cannot do it where we cannot measure outcomes.
Q437 Paul Flynn: I support you, Chairman, on this, because I visited the Emmaus centre with you. What you are saying is the usual thing: they might be doing marvellous work, which we are very impressed with, but they are not very good at presenting their case. The ones who can present the case and say, “We can prove this; we can prove that” are the ones who are likely to get the Government support, rather than someone who is not brilliant in their presentation skills.
Mr Letwin: No, that is not the nature of the problem. They were very good at presenting their case and they are doing some marvellous work. Unfortunately, it is not possible for them to do it in a way that enables us to measure outcomes as we would need to for the accounting of public money.
Q438 Chair: So what you are saying is, “This charity may be doing fantastic work, but the Treasury cannot measure it, so we are not going to give it any money”.
Mr Letwin: Correct. That is a real problem, but it is nothing to do with silos and it has nothing to do with payment by outcomes; it has to do with the fact that public money has to end up by having measurable results if you are paying by outcomes. That is an issue. My own personal view is that where you hit that issue, the best thing to do is to rely on the voluntary donations that do not demand outcomes.
Q439 Chair: Or maybe, rather than sticking to this rather strict and narrow equation about our payment by results, we ought to introduce something that is called grant funding.
Mr Letwin: We do a great deal of it.
Chair: Maybe the answer to Emmaus would be to assist the expansion of Emmaus by grant funding, which does not enmesh them in the bureaucracy of payment by results but nevertheless recognises the extremely good work that they are doing.
Mr Letwin: We do a great deal of grant funding, and Emmaus receives a great deal of public funds, for example through housing benefit, and plenty of access to public funds other than payment by outcomes.
Q440 Chair: But they need capital. That is what they need.
Mr Letwin: Many people need many things. The point I am making is that a payment by outcomes base is not applicable where you cannot measure the outcomes.
Q441 Chair: Research found that Emmaus delivers savings to the taxpayer of about £13 million per annum based on a cost of about £26,000 per companion per year in reductions in offending, reduced time in the legal system, more efficient use of health services and benefits voluntarily relinquished. Do you dismiss this research?
Mr Letwin: Unfortunately, it is not research that convinced the Treasury. I am afraid the Treasury has to act in this capacity as the guardian of what will later be overseen by the Public Accounts Committee.
Q442 Chair: I have to tell you it is extremely disappointing and casts a shadow over all the talk about enabling the Big Society.
Mr Letwin: No, I do not think it casts any such shadow.
Q443 Chair: So this was an unfair litmus test of the Big Society.
Mr Letwin: Yes. As it turns out, it was not a good litmus test.
Q444 Chair: On that unhappy note, we will have to end, but we are likely to express our disappointment about this in our report.
Mr Laws: Could I end on a happy note, Chairman?
Chair: Oh, do.
Mr Laws: The progress that we are trying to make in areas such as social impact bonds across Government, which do try to measure things that we have not measured in the past and then give credit for those to allow funding to be applied to those areas, does show that—and I am not an expert on the area that both you and Oliver clearly are—the Government is seeking to do things that people have argued should be done in the past and give value where it was not in the past. The example you cite does not suggest to me that this is being blocked across Government.
Q445 Chair: I am grateful that you mention social impact bonds, because I am also grateful to the Cabinet Office for facilitating discussions about the possibility of the use of social impact bonds in this case, but for some reason the Treasury still was not satisfied.
Mr Letwin: In that case it was not the Treasury; it was investors. Both investors and the Treasury demand measureable outcomes. David is absolutely right that the development of social investment bonds, which is a huge national success story, has led to the measuring of things that previously were not measured. That is a very important part of it.
Q446 Chair: If you are paying to get someone out of prison and rehabilitated and into work and off alcohol and out of mental illness, how can you deal with a system that only measures one aspect of that and you get that money from one pot, and then only measures another aspect and you get that money out of another pot, and in which it is difficult to aggregate the value? That seems to be the problem: that what Emmaus does is aggregate the value of several different streams of funding, or benefit, and neither the social impact bonds nor the payment by results allows that. That seems to be a fault in the system, not a fault in Emmaus, which is achieving things that charities working with reoffenders or in mental health on their own cannot achieve.
Mr Letwin: I agree with you entirely that it is an issue—let us leave aside Emmaus for a moment—how you structure something so that it can deliver multiple outcomes and get paid for each of those outcomes. We pay for each of those outcomes, and it is perfectly possible, therefore, to structure something where you get paid for all those outcomes, but you have to design it around the outcomes that we are talking about, and you have to be able to show that you are achieving them.
Q447 Paul Flynn: This is the curse of many voluntary bodies, where their energies and their best people are there designing next year’s bid. It turns out that the work they are doing is possibly not the most important work that has to be done, but that which is going to look good when they put their bid in. This short-term charity funding has been going on for years, but this is a good example. I was impressed, as the Chairman was, by Emmaus, having never come across it before except in the work of this Committee.
Mr Letwin: It is impressive. Do not mistake me; I think Emmaus is an impressive organisation.
Q448 Chair: It is very impressive, but we are not going to give it any money.
Mr Letwin: There are many things done that are impressive because they lead people towards outcomes and that are very important and that deserve funding of various kinds, and Emmaus receives funding of various kinds and should go on receiving funding of various kinds. I am very sympathetic to the idea of further funding for it, but unfortunately it does not get to those outcomes in a measurable way. Payment by outcomes and social investment bonds work when you get to the outcomes, not when you move people towards outcomes.
Q449 Chair: We have laboured this. May I give you a plea? Please can we give this another look?
Mr Letwin: I am more than willing to give it another look.
Chair: On that happier note, thank you very much.
Oral evidence: Citizen and Public Services, HC 800 4