House of Commons - Public Administration - Appendices to the Minutes of Evidence

66. Could I welcome Sir Michael Bichard as our witness this morning. I am tempted to say once more meeting like this because you are a regular attender at our sessions, for which we are very, very grateful. The fact that we keep asking you back means that we like what you say, or at least you challenge us with what you say. I suppose we thought that now you are a free man you might speak even more freely to us than you had been able to before. Whichever inquiry we are on we seem to want to know what you think about it. We are now doing an inquiry into targets, measurements, league tables, all that kind of thing, government by measurement. We want you to tell us your experience of working that system, what you think about it and any alternative approaches that may be helpful. I think you have something to say to us by way of introduction.

(Sir Michael Bichard) I thought it might be helpful if I just said a few words around targets and tables and we can take the discussion from there. I am not going to go through this line by line but basically what I am saying is that I think targets and performance tables and measurements have an important part to play in improving public services. That is because they focus energy and effort and they enhance accountability but both of them, I think, carry risks and dangers, which is obviously why you are having this inquiry. I think it is important to learn the lessons of experience. As far as targets are concerned those lessons are, amongst others, that targets are best if they are set by people who have actually been involved in delivering operations and targets, and that is not always the case in government. I think, and I am sure that you have come to this conclusion anyway, that they should be small in number. I say that with the benefit of experience having led the Benefits Agency for five years which had 152 targets. It is quite difficult to focus 65,000 people on 152 targets. I think that they should be largely outcome based and certainly not about process. They should be measurable and they should be expressed in terms of client needs. I think too many public service targets do not address the client need and, therefore, do not have much ownership from clients or from staff. Obviously, and again it is a basic point, they should be stretching but achievable. It is important because unrealistic targets do not raise performance, they just demoralise people and sometimes lead to poorer performance than you started out with. There are several points around review which I think are quite important. The way in which the targets are formulated needs to be regularly reviewed because over a period of time any target can begin to distort behaviour and over time any target can be manipulated. I think the formulation of the targets needs to be regularly reviewed and regularly refreshed. I think also the management of the targets itself needs to be regularly policed and audited because especially if you are linking targets to paying bonuses then there is an incentive there for people to fiddle the targets to enhance their salary, therefore there should be clear auditing arrangements. We had serious problems with the Employment Service many years ago when there was less than honest management of the target regime that was in place at the time and the Chief Executive had to be very brave in saying "This is not acceptable. We are going to root this out and approach these in a totally honest way". I think targets have got to cover all levels of delivery. It is absolutely hopeless to set a national target and then just tell local delivery units to go away and achieve those because they have got no idea what that national target means in terms of their performance, what they need to do to improve so that the national target is achieved. I think you need the target set at all levels. They should not be so detailed as to strangle any scope for creativity. Once you get really detailed targets which prescribe precisely how things should be done rather than what you are expecting the outcome to be then I think you take away the scope for innovation and creativity which seems to me to be one of the great keys to public service reform and improved service delivery, which I actually think is a major problem in this country at the moment. The lack of creativity in public but also private sectors is a real issue. The targets need to be owned by staff. That means you need to involve staff in setting the targets. They need to be influenced by clients and by the wider community, so consultation with staff and community consultation is very important. Obviously they need to be rigorously monitored and reviewed. I say "obviously" but I think senior management can send very strong messages by personally being involved in reviewing the performance against targets and making it absolutely clear that the senior management is committed to delivery. I think there are only two other points to make, and they are more general points but they are really rather important. I do not believe that targets can ever tell the whole story. They are important, they can be a good focus, but we should never believe that they can tell the whole story. Some people say the problem with targets is that they deflect attention from all the other things that are going on in an organisation. There is that danger but without them I think people are unfocused and tend to concentrate sometimes on the trivialities, the things that matter to them personally which are not necessarily what matters to the client and the organisation. On balance, again, I think targets are a good thing but they cannot tell the story. Finally on targets, and I know this is almost a waste of time making the point, I do worry about the media response to performance against targets. If I was in government I think I would be increasingly cautious about setting explicit targets simply because I think the media response to a target which is missed even by a small amount is that this is a complete failure. I do not think in the private sector and in the best parts of the public sector that is how it would be perceived, and that is not how it should be perceived. If you are setting stretching but achievable targets, probably 50 per cent of the time you are going to miss them, hopefully just, but you will achieve a great deal more than you would have done if you had not set them. I think the media response to things like literacy and numeracy targets, you will not be surprised to hear me say it, saddens me. I do not want to say much on performance tables, again I think there are advantages and disadvantages. They are powerful but then weapons are powerful and they can do good and they can do harm. I think they can encourage better bench marking, a sense of competition, which I still think is important in a largely monopolistic system. They do enable clients, customers, citizens, whatever you want to call them, to ask questions and I think we in the public service should be prepared to provide answers to reasonable questions. On the other hand, it is quite difficult for tables to take account of external factors. The particular local social pressures are often not reflected in national performance tables and they do not very effectively measure the distance travelled by a delivery unit. It is too easy for those delivering in areas which do not suffer deprivation to be always at the top of the table and therefore feel pretty complacent, but on many occasions they are not stretching themselves. Tables can be demoralising for some because they do not reflect the pressures under which they work and they can encourage complacency in others. Of course they need to measure the things that matter and the data on which they are basing these needs to be reliable. There are advantages and disadvantages. I still believe that they have a part to play in enhancing accountability. I think they have played quite an important part in enabling people, parents not least, to ask some questions which ten, 15, 20 years ago they could not ask.

67. That is really very, very helpful. Thank you for giving us the note too. I suspect all those issues we shall want to pursue in so far as we have got time to do that. Can I just pick up on the very last point you were talking about because of your own particular experience. I have been reading a letter that I have had from a primary school head teacher in my constituency. She is a dynamic head, came into teaching mid career, absolutely committed, all the school leadership qualifications in sight, works in a primary school in an ex-pit village with committed staff, gets brilliant OFSTED reports and then she writes "Every year we get the SATs tables published and our school is utterly demoralised again and it sets us back, all the stuff we have done during the year". How do I write back to her?
(Sir Michael Bichard) I think you write back sympathetically. I will not preface every answer with this but Members must appreciate I no longer work in school based education, I am no longer in government, I have not been for 18 months, and therefore the answers that I give are personal answers.

68. That is what we want.
(Sir Michael Bichard) I would be sympathetic. I would like to think�I am not quite sure where the department is on this�that we could move to a position where league tables reflect the value added because I think it is sad that some of our really good schools operating in the most difficult circumstances do not get a chance to shine because the kids are coming from backgrounds which make it very difficult for them to deliver academically as well as some other children. I would like us to be moving towards added value, so I would rather you find out where the department is in terms of that because there is work going on.

69. We have been talking about value added for years and years and yet we still have the crude league tables.
(Sir Michael Bichard) I think you can have both. I am not suggesting that value added should take over entirely but I would like to see some value added statistics reflected. It does take a long time to get to that point because you need a long reliable run of data and, of course, until the early 1990s we were not keeping data because people said you could not measure what really mattered in education. The thing that one has to say to head teachers sympathetically but firmly is that for a very long time parents and others with an interest in the system had no way of asking questions about performance of the school. It is difficult in those circumstances but I think heads need to be robust in answering those questions. I know how difficult it is but if I were her I would be seeking over a period of time to get the press and the community to fully understand the pressures that she is facing so when the results came out particularly the press were covering it in a mature and responsible way. Locally I think that is possible, local press tend to support local schools and are more likely to attack government and attack the fact that there are performance tables. I do not think it is a lost cause in trying to develop an understanding locally of the pressures under which you are working and the value that you are adding and the progress that you are making. I am sure that head over a period of time has made progress and she should be putting that into the public domain as well.

70. Thank you for that. I will try a letter of that kind.
(Sir Michael Bichard) Give her my regards but preferably not my mobile number!

71. I am interested in what you said about the Employment Service and basically the cheating around targets. We have had the recent report through the Guardian of the cheating around SATs. Is it the case that if you have a target regime cheating is endemic to it, or is it just the case, as you said in your opening remarks, that we need better policing?
(Sir Michael Bichard) Human nature is human nature and I think there will be some people with a large organisation who will look to find ways of manipulating, if not cheating, targets and therefore you do need to have systems in place which ensure, in so far as is possible, that is extremely difficult and you are checking up on it. I do not think there need to be sophisticated audit checks but people need to know that checks are being made. Nothing comes without risk, as I said at the beginning, so there are risks. I do not think it is inevitable but sometimes we have not put in place all the systems which are sufficient so we have ourselves to blame. I think it can be policed adequately.

72. Let me ask one last thing before I hand over. When I read you over the years and I listen to you today, a sub-text�not a sub-text, a text�a text always is that there are people around government who do not really understand how organisations work, they have never really done it. I suspect that you have got your eye on some of the young scribblers in Number 10 and you have probably got your eye on the Treasury. When you wrote about this some time ago you were talking about the PSAs, and of course that is code for the Treasury, and you said "PSAs are an irrelevance to the best managed departments and no more than an irritant to the rest".
(Sir Michael Bichard) I think they were, I do not know what has happened in the current round, which is where I am not as helpful as you would want me to be. Let me cover some of those points. I have not complained about the "scribblers", as you put it, at Number 10. I always worked pretty well with them and I think they are high quality people, it is often a question about getting them involved at an early enough stage. I do not complain about that. What I do complain about very firmly is that I do not think there are enough people at the centre of departments who understand the issues that we are talking about today. I do not believe that they have sufficient sensitivity and experience of operational delivery, for example, to be able to set targets of the kind that I have been talking about. Looking back on it, it looks to me rather like a holding company which is almost entirely populated with people who have never actually managed on the ground and that is quite a dangerous situation. It is really the centre of departments�I am sure that all of this has changed dramatically over the last 18 months since I last experienced it�where I have most concern. As far as the Treasury is concerned and PSAs, my concern about PSAs in their early form was that they were almost being presented as a substitute for business planning, that really all you needed was a small set of targets, they were in the PSA and you got your comprehensive spending money and then they were reviewed. Unless they were, as I have put it, dropping out of the business plan, unless you did the background work which enabled you to focus down on this small number of key targets then many of them were just cobbled together to buy off the Treasury. I do not think that was an adequate response. The way in which they were monitored thereafter was not as rigorous a system as I was suggesting in my opening statement that you should have. As I say, that may have changed but what I wanted to see in place was in every department there to be a very focused business plan from which would fall out your small number of PSA targets and your business plan would be managed, monitored rigorously within the department and the Treasury and the Cabinet Committee would monitor rigorously your performance against your PSA targets. I think a lot of the words were in place, a lot of the rhetoric was fine, but I did not find that the process often matched the rhetoric.

Chairman: Very good, thank you.

Sir Sydney Chapman

73. Sir Michael, if I may say so you continue to have a fascinating career. I remember you as Chief Executive of Brent at one time, I think.
(Sir Michael Bichard) Thank you for reminding me of that, Sir Sydney.

74. It is an area where I have the privilege to represent but not in the same borough. In 1990 you were appointed chief executive of the Benefits Agency.
(Sir Michael Bichard) Yes.

75. When were you appointed permanent secretary to the Department of Employment?
(Sir Michael Bichard) Employment in 1995 and the joint department at the end of 1995.

76. So you were not chief executive of the Benefits Agency when these 152 targets were set?
(Sir Michael Bichard) Yes, I had 152 targets.

77. You had 152 targets?
(Sir Michael Bichard) Yes.

78. They were just presented to you, were they? What I am fascinated to know from your great experience is can you tell me a little more how targets are set. If we are going to judge whether targets are a good thing or not we have got to know if it is the politicians who take the lead in setting them or the civil servants or whoever. What I am interested in is even if it is the politicians or the civil servants there must be an inbuilt incentive not to set the targets too rigorously or too high, must there not?
(Sir Michael Bichard) I never found that a problem in what was then the DSS. The arrangement then�we are going back several years�was within the centre of the department there was a group, a unit, whose responsibility it was to both monitor the agency and negotiate with me, the agency, on targets. It was there that I felt there was a lack of capacity or a lack of understanding and therefore a desire to have as many targets as you needed to cover everything that the agency was doing. Those were then presented to politicians who would sign them off. I think politicians, secretaries of state, should be involved ultimately in agreeing those targets but it is very difficult for a secretary of state to say "actually I think we should reduce the number of targets. . .." I will leave it at that. I think one of the problems when you have got 152 targets is not just that it is difficult to focus your people on things that matter, you do lose sight of the things that matter. If you take the old DSS situation, for example, one of the key issues in managing that was the priority between accuracy of payment and speed of payment. There is a debate to be had as to what was the trade-off between speed and accuracy because the faster you made the payments the more likely it was that under an incredibly complicated system they were going to be inaccurate. It is very difficult to have that debate. There was a great drive from the centre of the department to have accuracy times which were ratcheted up every year and speed times that were ratcheted up every year because you just could not have a target that was not better than the one you had last year. It is that kind of situation that causes targets to fall into disrepute in the end, I think, because the people on the ground knew damn well that we could not deliver the income support target in five days and do it to a degree of accuracy in 95 per cent given the system that we had.

79. Targets are begat in this unit in the department, does that unit consist entirely of civil servants or is there any political input, say the minister's special advisor or whatever, in that unit as well?
(Sir Michael Bichard) I think in most places there would not be a special advisor involved at that stage. A special advisor might well be involved in looking at the proposal that goes to a minister and might say "this looks as if it is a reduction in performance, that is going to be a bit difficult for you", but not at the early stage of negotiation, no.

80. It is entirely civil servants in the unit?
(Sir Michael Bichard) It depends on the department but normally, yes. If one takes it forward to my experience in the DfEE where I was on the other side, I was negotiating the targets with the Employment Service and I hope, therefore, that we were significantly more sensitive to operational needs there. We were trying to introduce more people from outside the Civil Service, so there were one or two people there who had experience outside, but normally it would be civil servants.

81. I am sorry to pursue you on this but I have not got to the crux of the matter myself, and maybe it is my not very mega brain. Okay, the unit comes forward with a draft set of targets, let us say,�
(Sir Michael Bichard) There is a conversation which will go on and the unit will then set a proposed set of targets for the agency, the agency will say "we cannot possibly do that" or "there are too many of them" or whatever, and there is a negotiation that goes on, then this piece of advice that will go up to the secretary of state, hopefully agreed, but remember that the big agency chief executives report directly to the secretary of state and therefore have the ability to send up a dissenting note if they want.

82. Again, when you were permanent secretary in the Department for Education and Employment, were you in at the very beginning when the unit was formulating the targets or did you come in half way through or at the end? Was there some to-ing and fro-ing?
(Sir Michael Bichard) My recollection is in that department what we tried to do was to have a strategic discussion at the outset with the agency about what were the key target areas and the agency staff and my staff in the department would then talk about the detail and I would get involved at the end in a discussion with the chief executive as to whether we had something which we both felt was stretching but achievable. That would then go up as advice to the secretary of state.

83. I think you were permanent secretary in both the first and the second Comprehensive Spending Reviews. Could you say something about that? I am interested to know how the Comprehensive Spending Review came into being and I am looking at it from one particular department, your department.
(Sir Michael Bichard) How it came into being or why it came into being? I think it came into being because of a desire to produce more stability in the financial process.

84. A three year period rather than a one year period.
(Sir Michael Bichard) A three year period rather than a one year period. To some extent that has been successful. I think it was probably in the second round that there was an attempt to include targets to have an agreement, a Public Service Agreement, explicitly and to publish that and then to monitor it. As I said, I do not disagree with that. I think the Treasury is handing out the money and it ought to be clear with the departments about what the money is being spent on but that ought to come out of a wider business planning process and those targets ought to be about outcomes and they ought to be targets which you can influence the delivery of. Certainly in the first Comprehensive Spending Review a lot of the targets if you looked across government, if you looked at the Treasury's targets as well, were pretty process orientated, they were about doing things rather than achieving things. If you take into account all of those caveats it is a process which I do not disagree with. I do not think the monitoring has been as strenuous as, I was going to say I would have liked to have seen, I probably did not want to see as a permanent secretary, but as I would have expected.

85. So you would agree with the Chancellor when he said in the House in July 1998, obviously the time of the first Comprehensive Spending Review: "The purpose of targets is to ensure more resources are given directly to front line services"? Would you entirely agree with that? Am I perhaps quoting him out of context?
(Sir Michael Bichard) I do not know, I do not know what the context was.

86. It was the first Comprehensive Spending Review.
(Sir Michael Bichard) I do believe that if you are going to devolve more resource and more responsibility to the front line, wherever it is, then the performance of that front line does need to be transparent, you do need to be able to hold it to account. If that is what he meant then I agree with it. I think it is very dangerous in a large system to be devolving resources and responsibility and power to people without being able to measure how effectively they are using it and how successful they are being. If you look at the education system in the 1970s and 1980s I think you have a perfect example there of huge amounts of money being devolved to professionals without any real targets and without any real way of measuring what was happening in the system and it was a long time before we realised that on things like literacy and numeracy the standards had actually gone through the floor. I think targets and measurement are very important as a step towards more devolution, I do agree with that.

Chairman

87. Just before we lose that particular point, I think 152 was the number that you�
(Sir Michael Bichard) I may be wrong by one or two.

88. Let us say 152, just so we get an idea of what you are saying. The argument is that there are too many targets. What would be a reasonable number for an agency?
(Sir Michael Bichard) For the Employment Service we tried to keep it below ten. If you have got 30,000, 40,000, 60,000 staff, how on earth do you communicate 152 targets? In a way what you have to do is to focus in on what you think are the priorities but then you leave yourself vulnerable to being told that you have not given enough emphasis to one of the other targets.

89. If we were talking about a department and not an agency?
(Sir Michael Bichard) I think roughly the same. We had a business plan in the DfEE�you can get a copy of it�and again we tried to keep it to ten or a dozen priority targets for the year.

Brian White

90. It has been said that targets are a very useful vehicle for initiating change, but the longer they go on they become less useful, it is the law of diminishing returns. Do you subscribe to that?
(Sir Michael Bichard) I do not believe that targets as a process lose their impact but I did say that if you do not refresh your targets then you are in danger of disorderly behaviour and people will see them as just routine. It would be a very odd world, would it not, if we had the same targets year on year on year in any event because the pressures upon you and the priorities are different so your targets should be different. I think they do need freshening up from time to time.

91. You say that targets tend to be within departments?
(Sir Michael Bichard) Yes.

92. If I could use an example, and it is specialist schools, if there is a proposal from the government, a quite reasonable proposal, to meet government educational targets but the consequence at local level is more increased traffic, which means the DETR does not get its target of reducing car usage, how do you get that cross-departmental target and avoid those unintended consequences?
(Sir Michael Bichard) You have got to identify what are the priorities for cross-departmental working, what are the priority issues, otherwise you just cannot manage this process. There is a lot of strength in what you are saying and that is one of the ways in which you can encourage cross-departmental working, cross-sectoral working, is to have joint targets that go across the boundaries, I think even more if those targets are linked to reward which people can earn by working better with other departments or with local authorities. There are some examples of that but there are not that many. There is a package of things that you could do to encourage that cross-departmental working: joint budgets, joint targets, ministerial champions, all of those things. They happen but I do not think they have gone as far as I would like.

93. So if you are measuring a target and you see unintended consequences happening as a result of work towards that target, what do departments do about rectifying it, particularly if that unintended consequence is somebody else's problem?
(Sir Michael Bichard) Is somebody else's problem?

94. Either the health service or another department.
(Sir Michael Bichard) The responsible thing to do is to revisit the target and if it is a sufficiently significant issue that you have identified to revisit it in year. You need to be careful about that because if you set targets then people expect to work to that target for the period that you have set it. If it was a really significant issue you would need to revisit it in the year, even if the problem is not yours but someone else's in the system, certainly otherwise you must revisit it at the end of the year and you should be discussing that with your partners. That is the theoretical answer, is it not, really. Whether or not that happens sufficiently is for others to decide.

95. It did not happen with you when�
(Sir Michael Bichard) I do not think I have got any specific examples where I can say to you that a target was not revisited because it was causing problems for someone else but not for us, so I cannot say that, but human nature being what it is.

96. One of the things that has come up is the number of bodies to measure targets. What do you think of the monitoring process? Are there too many bodies looking at targets at the moment?
(Sir Michael Bichard) I do not know whether I am as concerned about the number of bodies, although there are a lot, as I am about the bureaucracy that surrounds some of the processes. Their work in terms of standards, regulation, should ultimately be improving the delivery of service. Once you get to the point where it gets in the way of improving that delivery of service and stops people doing their real work then I think we have a problem. In some cases that has been the case. I have a problem with some standards inspectorates who have been more concerned about blame than they have about learning and I think that brings the process into disrepute. I have a slight concern about the way in which government seems to find these inspection organisations a good thing for others but not necessarily a good thing for itself. I look with some amusement at the moment at the way in which everyone is lauding the Comprehensive Performance Assessments which are being used by the Audit Commission in local authorities. I was actually rather impressed with the way in which the Audit Commission had gone about that task and I would love to see the same thing happening in government departments. If it is good for local authorities, why is it not good for government departments?

Chairman

97. CPAs for every government department.
(Sir Michael Bichard) Yes, published. I was saying when I was in government, just so you do not think I am changing my position, that we needed, and I was then suggesting the NAO should do this, regular reports on the management performance of government departments which were published and which were discussed at inquiries like this. What we get actually are reports on ad hoc issues, we never get a published report on the management capacity of individual departments and their performance; you do on local authorities now.

Brian White

98. One final question which is that targets tend to be about efficiency, about making sure that the departments are actually delivering. If you want to move to public services that have lots of choice that implies that you have inefficiencies in the system. How do you square choice so, for example, all the schools are full, the schools have a choice and not the parents? How do you square inefficiency versus choice?
(Sir Michael Bichard) It is a very interesting point and one I have thought more about recently. You are right, if you are going to have that level of choice in the system then there has got to be some spare capacity in the system, that is how choice works, and therefore you have got to be prepared at the outset to invest in some spare capacity in the system and, therefore, you have got to have that policy strategic debate at the outset. I am not sure I see it as tied closely to the issue of targets, I think it is a major strategic issue.

Mr Liddell-Grainger

99. Why did you leave?
(Sir Michael Bichard) I was not expecting that question this morning.

Chairman: Ian is a military man, he has a direct way with him.

100. I am fascinated because you fought your way and you got in. I am just looking at The Outsider v. the Club. I was wondering why you went in the end? Did you just get sick of the whole thing or did you think the money was not all that or you had got knighted and you should have gone?
(Sir Michael Bichard) Never my great motivator. A range of reasons, I suppose. One was I quite wanted to do something different. I could have gone and done a permanent secretary's job in another department but I had done that for five or six years and frankly I did not want to do the same job just somewhere else. That was an issue. I wanted to move to a completely different environment, which I have been able to do. I think it is a pretty well open secret that I was frustrated at the speed of change. I thought I was beginning to become a caricature of the person who was always moaning about things not moving faster and it seemed to me it was probably time, before that became too much of a caricature, for me to move on and someone else to carry the flag.

101. That is the crux of the matter, that things were not moving fast enough. How do you see the interface between people like yourself being brought in and businessmen? I was reading The Outsider v. the club, the permanent secretaries' club, and only one of them had gone into the World Bank, Rachel Lomax, who had been a career civil servant before that. Do you think that more people should be brought in from outside to try and steer government down to the ethos of business which has targets, has always had targets, budgets, etc., and accepts them for what they are? Is there a way for that connection?
(Sir Michael Bichard) I get slightly worried about the language of just importing private sector business mechanisms into government. I think a lot of what the private sector does, a lot of the mechanisms, are really, really good and therefore what we ought to be doing is justifying them on the basis that they are good systems and good approaches, not that they were done in the private sector. Basically on the main point of your question I do believe, and I have said constantly, that we ought to be bringing into government more people from outside, not just from the private sector but from other parts of the public sector, from the voluntary sector too, that there should be a better flow both ways. I do not think we should not have civil servants who see themselves necessarily forever working in the Civil Service. I happened to have a look at the evidence I gave when I was last here and I think we talked then about the difference between stagnant puddles and fast flowing streams. I am quite keen on fast flowing streams and sometimes I have worried that our government system, Whitehall, is too much like a stagnant puddle.

102. This government uses an enormous amount of management consultants, bringing them in all the time.
(Sir Michael Bichard) I think all governments have done that.

103. Fine, but I am just trying to figure out how much they have spent in the last couple of years on this. Do you think that they could be used to try and appraise targets? You had 152 and you said the ideal was about ten or thereabouts. Do you think that they should be appraised from an external source as opposed to an internal one?
(Sir Michael Bichard) I think that can be very helpful actually. The extent to which consultants are effective they would say, and I would agree, is very much down to the way in which you specify their task and manage their performance. That is a skill in itself which maybe we have not always got right. In terms of this morning and the evidence, I should say there are many things that the Civil Service does that I am very appreciative of and there are some brilliant people there, so I do not want to give an entirely pessimistic picture.

104. I do not think anybody would suggest that for one minute. What we are trying to tease out is the way the targeting system works in this country and some of the ramifications and problems of it.
(Sir Michael Bichard) I think having external people, having an external look, is absolutely right, that is what you need if you are not going to miss some of the big things like accuracy and speed.

105. One of the things you said which intrigued me in The Governance of the Public Sector, which you wrote, was "If the Treasury (and No 10) become too strong and too interventionist, the role of Ministers and their departments is devalued." If that is the case then how do you administer the target because you have got the overall body, the Cabinet Office or whatever, putting pressure on saying "this will be achieved and if it is not we will think about something else"? Do you see it being too interventionist or do you think that the executive is becoming too all controlling, I suppose is the word, and what problems will that bring?
(Sir Michael Bichard) I think you need to be constantly asking that question, which is not a way of ducking the question at all. I am not sure that I believe it necessarily is too interventionist. I said last time I think one of the most difficult decisions in public administration is when do you devolve and when do you centralise. As a subset of that one of the most difficult questions is when do you intervene and when do you not. I think if you have got a good business plan with a small set of key targets and you are monitoring those rigorously then you are in a good position to know whether or not they are being delivered and when you should intervene. I am not against intervention. For heaven's sake, look at what we did with local education authorities where the department probably intervened more than at any other time in the history of education. One of the great strengths of introducing the literacy and numeracy targets and strategy was that we had information available at school and local authority level which enabled us to intervene where we thought that was necessary, whereas in the past what had happened was you had the targets, you had a vague sense that they were not being achieved but you did not know where to focus your attention to try and make sure that they were achieved. Where kids' education is concerned, where literacy and numeracy standards are concerned, I think they are important enough issues for central government to have the right to intervene if they feel that a local education authority or a school is just not delivering. You need reliable data.

106. In your Ten Steps to Delivery, number six, you "Review the operation of Public Service Agreements. Every government department needs a decent business plan which provides them with purpose, direction and a focus on priorities. PSAs do not provide this."
(Sir Michael Bichard) Yes.

107. Are you confirming from what you have just said that in fact the whole thing is not being controlled?
(Sir Michael Bichard) I was not involved in a lot of PSAs. My sense is, from what I hear, that it is an improved process. I have not done a review of the targets which form the Public Service Agreements. Really I do not think that I am qualified to comment on that. I was talking about the first two rounds where I think a lot of the targets were not measurable, they were not focused, they were not rigorously monitored and they did not come out with decent business plans.

108. You keep very much involved still in what is going on. What is your best guestimate?
(Sir Michael Bichard) I think that is an unfair question. I only have the knowledge now of a lay person and I think it is wrong for me to draw conclusions really.

Mr Liddell-Grainger: Okay. Thank you very much.

Chairman: I think you have been as helpful as you possibly can be on that. We have pressed you too far.

Kevin Brennan

109. You have put your finger on some key issues here regarding targets in the opening statement you have made in the paper you have provided us with. Can I just explore that a little bit with you. You have set out 17 key points you think are required to design a good target. I was interested in what you said. You said the targets should be stretching the achievable. Would you accept the proposition that if all targets were achieved that they would not be stretching enough?
(Sir Michael Bichard) Yes.

110. If you accept that point, would you accept that it is inevitable that some targets are not met?
(Sir Michael Bichard) I do. I do accept that, yes.

111. Should you not add to your points that we should have a target for how many targets we should expect to meet?
(Sir Michael Bichard) It varies according to circumstances.

112. In a given circumstance should there not be a target for how many of the targets you have said you expect to meet?
(Sir Michael Bichard) I think that is an artificial target. When I was running the Employment Service what I would do was agree with the chief executive and he would with his staff a bonus which reflected his performance against targets. In that bonus I would say to him you will get so much if you get 80 per cent of the target.

113. I am making a serious point because you have said in your statement that "Unrealistic targets do not raise performance�they simply demoralise staff".
(Sir Michael Bichard) Yes.

114. You have accepted my proposition that it is inevitable you will fail to reach some of the targets. At the outset we have heard that is an inevitable outcome, therefore, that you will demoralise staff by setting targets which you do not expect them to be able to reach.
(Sir Michael Bichard) No, I do not think that does demoralise staff. I would not have been demoralised if I had achieved 80/90 per cent of my targets actually, I would have been delighted. I do not think that does demoralise the staff.

115. Would that be something you would communicate to your staff? You might not be demoralised but would you communicate to your staff at the outset "Listen we are setting all these targets, limited in number as you say, but we do not realistically expect you to be able to meet them all. If you reach 80 or 90 per cent of them as your manager I will not be demoralised and therefore you as a member of staff should not be demoralised by the fact that you feel you have reached them".
(Sir Michael Bichard) I think it is a question of how you go about managing your staff. The management and the leadership I would give to staff is "We have set these targets. We will do our darnedest to meet all of them. We will not give up on any of them".

116. I do not expect you to meet them all.
(Sir Michael Bichard) No, I would not say that at all because I would like to think we could meet them. My answer to your question is I would not expect them all to be met necessarily but the other side of the coin is if all of them are not met then the way in which management responds to that is really important. I would not go around beating people up because they have missed a couple of targets, maybe partly because of external factors or maybe partly because they just turn out.

117. We know what will happen, do we not? You will not go around beating them but you have said in the final part in your points about targets that the media response to you not meeting them�because you have said that you have told the staff they have to meet all the targets�is they will say you have failed and the people who are charged with reaching those targets have failed.
(Sir Michael Bichard) No, we cannot be driven entirely by the media response. We are in this business to provide the best possible service to the public. I am about trying to find systems which will deliver the best possible service to the public. If we do not have targets, which I have said at the outset have got risks attached to them and are not perfect, I can tell you what happens with a lot of staff and that is they run around like headless chickens trying to understand what the hell they are supposed to be doing and what are the priorities in this business, what do they want us to do. Let me tell you that is very demoralising and that is a lot more demoralising than not achieving a couple of targets when your management is reasonably understanding. I can lack understanding when people are not performing but I think if people have really pulled out all the stops and got as close as they can to performing then that is when one should be supporting and not blaming.

118. I would agree with you entirely that people want to be given the ball and told in what direction to run with it and given the freedom to use it appropriately. Are you not setting them up to fail if you give them a series of targets which you as a manager secretly, because you do not share this with them, know they will not be able to reach and when they stumble and fail as a result of that you say "Well actually do not worry about it, we do not mind it".
(Sir Michael Bichard) I think there are different philosophies and different ways of motivating or not people. My philosophy and my way of motivating is always to be clear about what you are trying to achieve and do your darnedest to achieve it. Sometimes you will fall short both as an individual and as an organisation but I would rather do that than avoid clarity of direction and clarity of focus simply because of the danger that we might miss and we might fail. The public want us to improve the quality of service and get as close as we can to perfection, that is what we should be doing. We should not be driven totally by what the media think and we should not be driven totally by the fact that some staff may find all this a bit difficult. Our job is public service not staff reassurance.

119. Can you give me an example from your experience of a bad target?
(Sir Michael Bichard) I think the speed of payment one that I talked about earlier was a bad target because of the impact that it was having on accuracy and on so much else that was happening including customer service which was pretty damaging. That is a serious example.

120. I am very grateful for that. It is difficult to get people to give examples sometimes.
(Sir Michael Bichard) If you want a more flippant example, the example about how quickly you got someone out of a Benefit Office was a bad target. There are two ways in which you can get someone out of a Benefits Office. The staff very quickly realised that if you threw them out they came back and therefore you hit the target twice.

Chairman

121. That is the kind of example we want.
(Sir Michael Bichard) That is not an entirely flippant one.

Kevin Brennan

122. I am very grateful for both examples, both the serious one and the flippant one. Leaving aside the flippant example which I am sure we will utilise later on, the other example you gave as a bad target in terms of your 17 points for designing a good target, which of those did it fail?
(Sir Michael Bichard) I am not sure I can answer that.

123. Not in terms of all of them.
(Sir Michael Bichard) The last point I made there, targets should reflect priorities, they should not fudge difficult decisions. A difficult decision is are we serious about accuracy or are we serious about speed and have we got the right trade off, that is the one.

Mr Hopkins

124. Sir Michael, I have not heard you speak before and I must say I found myself interested in what you were saying. I am one of those people on the left who made a lot of enemies of my former friends by being critical of the teaching profession. In the 1980s you may remember the research done by Sig Prais and Claus Moser which gave horrifying comparisons between our schools and what our children were learning with other countries. We started to address that. The William Tyndale School head teacher said that "if 50 per cent of the children can read by the time they leave my school I will be quite happy with that". He was sacked. We started to realise something horrible was happening in our schools. I have focused on education, I have taught in further education myself and even recently we have had the Moser Report four years ago saying 50 per cent of our population do not understand what 50 per cent means. There is still a problem in the population as a whole but I think we are starting to address it. I think the measurement is absolutely crucial and we have to start measuring and finding out what is happening. The targets you say can sometimes be demoralising. My own feeling was that pressure was put on schools and teachers without telling them precisely what you wanted them to do. You were permanent secretary in the Department of Education in a crucial period. Was there any really serious attempt to come to grips with the fact that teachers had been fed nonsense for years about how to teach. In my view the child centre, progressive centres actually caused mayhem in schools and unfortunately a whole generation of teachers got really demoralised because they felt in a sense they had wasted their time because they had been told nonsense about how to teach. That is changing now. Nobody has faced up to that. We are having literacy and numeracy strategy and that sort of thing and publishing targets but we are not saying something is wrong. Just a final point. A very good friend of mine grew up in Pakistan, he is now a graduate. He said we can all do arithmetic in Pakistan because we are taught tables by standing up and chanting in unison. Now if I said that to a teacher in Britain they would have passed out, I think, at the thought it was so horrifying, so connective. Do we not need to address the methods of achieving the targets not just put the targets in place?
(Sir Michael Bichard) There are a huge number of issues there. I think we do; of course, we do. Targets are just a way of measuring not a way of doing. I think probably I disagree with you that we did not. I think the literacy and the numeracy strategy which were about more than just the literacy and numeracy hours were probably the first real attempt to say how things were going to be done in the classroom certainly since the war. I think they have been pretty successful, I suppose I would say that. I think the reason they were successful was they were based on a lot of evidence which was drawn up from around the world on what was working. The literacy and numeracy strategy was coupled with increasing evidence from the inspection process about what worked in schools. I think it is quite difficult for schools now to say that they do not know what it is that makes for a successful school. I think we know a lot more now than we have ever done about what makes for a successful school and how they should behave and I think that is all to the good. This is going a bit beyond this particular inquiry but I think you pick up an issue which is related to targets and tables and which we have not talked much about and that is risk and creativity. One of the things you can criticise targets and prescription tables for is that they make people less likely to be creative. I think that is something one should be concerned about. As I said you should not produce targets which are so prescriptive down to the last detail that people lose their creativity. Teaching in a classroom requires some creativity. Now I think the best teachers have been able to use their creativity within this new framework of targets and strategies and I know that is not agreed by everyone but I think they have. You do need to be worried about that. Finally, I have just come back from Hong Kong where I was speaking at a seminar at the weekend on creative cities. Of course go to Hong Kong, Taiwan and Japan actually and what they look with envy at the English system for is creativity. They are concerned that they have a lot of people who are very good on standards but as they move from a manufacturing economy to a design creative base economy they do not have enough people who have the creative skills and who know how to innovate. We just need to be careful that we do not become so managerial and do not produce targets which are so prescriptive and detailed that we squeeze out risk and creativity. Good managers can manage risk as well as they can manage targets.

125. Can I just pursue this. My next question was going to be about international comparisons. One can take the extremes of the Far East and their problems of rigidity and lack of imagination and creativity, we have new ideas and they develop them and so on but there are other examples on the Continent of Europe where they are being much more successful. I have been to Norway recently and they are very sensitive to all the problems we have had but they are way ahead of us I think in solving them. Have we looked very carefully at other systems rather than looking at just the extremes of the Far East?
(Sir Michael Bichard) I thought we were getting better at that. I think there was a lot more effort to find out what was happening in detail and to try and pick up the good practice.

126. One more brief question. One of the problems I believe�I do not know if you would agree�is that in Britain we try to get too much out for too little input. Resources in education by comparison with other countries are much lower. The fact is in Denmark class sizes are about half what ours are. In Switzerland I understand teachers are paid the same as their GPs, I am not saying we should go to those extremes. Do we not need to think really about putting a lot more resources into achieving our targets?
(Sir Michael Bichard) I think in education we were trying to do that. We did try to find ways of increasing the salaries of teachers and head teachers. I think more generally the Government has put a lot of money into public services. My great concern is whether that money will lead to improved services. The history over the last 50 or 60 years is that it does not always happen like that and that is a real worry. The point about targets surely in particular is that you are never going to have enough money. I used to say to my staff "It is very unlikely I will ever get up in front of you and you say `Fair cop, guv, we have got far too much money we do not know what to do with it'." It is always going to be "We have not got enough money". You have to use that resource as well as you possibly can. I do not want to bore you about this but targets are a way of making sure that people will focus their energy on the things which you think generally are the priorities otherwise everyone has got their own view about what they should be doing. Every teacher, every doctor, every one in every public service has got their own personal priorities. They have got good intentions. They are committed dedicated people and without some focus they will go off in all sorts of different directions and a lot of money is wasted.

Chairman

127. Can I just follow up one aspect of what Kelvin has been asking. You mentioned literacy and numeracy, this is always cited as the great shining success story of central intervention, whatever else you might think about it. I wonder how it sits with your general analysis because it was not just an outcome, it was very much a process intervention.
(Sir Michael Bichard) I wanted to pick that point up about five minutes ago and I forgot it, you are absolutely right. It was a process intervention. I should have said right at the beginning, this is not a cop out, I think there are some occasions�and they are very few in my view�when you have to take the decision to intervene in the process as well as the outcome. You only take that if you feel the problems are serious enough to merit it and there is not sufficient consensus around the process that people are confused. You do not do that very often because, one, for the Government it is a very risky strategy because it is your head on the line if it does not work and, two, it does run the risk of people feeling they are no longer in control of their own destiny and their own creativity and that can be very demoralising at the time. The evidence I was giving last year to other Select Committees was I think Government had to take a view and has to constantly take a view as to whether it continues with that degree of intervention. So be very careful about it. We thought and the Secretary of State felt that things had got to a pass where we just had to intervene on the process as well as the outcome.

Annette Brooke

128. I would like to just backtrack a little bit and things in terms of targets might be concealing as much as they are revealing. I would like to quote from a local example but I do not expect you to speak on that. Dorset Ambulance Trust was very highly favoured a year ago. It had reached all its targets, it was within budget. It had Investors In People two years running. It has a charter mark. The CHI comes in and it is a totally different story now. You mentioned the need for an auditing process but could you just expand on that and what else one needs to have some confidence that the targets are giving us the right story?
(Sir Michael Bichard) I do not think there is a magic wand here. What I am suggesting is a combination of internal processes and external processes. I am suggesting the external processes should not be so bureaucratic as to get in the way of the service but you do need them. Whether that is external audit or whether it is an inspection process I think you do need them. The integrity of your performance as well as the level of your performance is going to depend primarily on what is going on within the organisation. That is why things like self-assessment are so much more important in my view than external audit though I still think you need in a monopolistic situation someone from outside having a look at how you are managing and what targets you are setting and whether the information is independent that you are basing your conclusion on, whether it is reliable and whether you need to have another look at the target. All of that I think is necessary. I do not know the Dorset Ambulance Trust case at all.

129. No, I did not want to dwell on that in particular but you had a situation where literally it had to wait for that outside body because nothing would get revealed from within despite the internal problems which were being concealed and not handled by the Trust.
(Sir Michael Bichard) That is a worry. When that happens it is a worry. I have seen it happen once or twice. If you go through a process of IIP, you get charter marks and you have a self-assessment system and it is still not showing that level of performance failure, I do not think it happens that often but I think it is very worrying. It makes me worry with something like IIP, which I was a great believer in and sponsored for a long time, whether the assessment system there was sufficiently good.

130. It is just, I suppose, thinking about Ofsted being over the top to start with. One hesitates to say that there should be regular inspections on all sorts of bodies but having had this situation locally it would not have come out without the CHI going in. There seems to be a case for having annual check-ups on such bodies.
(Sir Michael Bichard) It needs to be annual and certainly I think if it is too bureaucratic every year then you have got a problem. Surely what we should be trying to do is to have enough indicators in the public domain about an organisation to be able to draw some reasonably reliable conclusions about whether or not this is a high performing organisation or an organisation in difficulty. What we have begun to do now with schools is to focus the Ofsted inspection on the schools which from the evidence we have appear to be in difficulty and not spend as much time on the schools which from the evidence we have appear to be performing well. Sometimes we will get it wrong, sometimes the evidence will be manipulated or it will not throw up a cause of particular concern but I think that is the exception rather than the rule.

131. In fact possibly you would favour something like Ofsted which went in quite heavily to start with and then stood back?
(Sir Michael Bichard) Yes. I have always supported Ofsted and I have always been in favour of Ofsted. In a monopolistic situation then you need something like Ofsted. My concern at the time and my complaint now is that it was too focused for too long on blame. An inspection system is as much about ensuring that a good practice gets around the system. For a good practice to get around the system you need to develop some ownership for it. You cannot just tell people when they get things wrong, you cannot just tell a profession when they get it wrong, you have got to tell them also when they get it right and help them to ensure that good practice is spread around the system. That was my complaint about Ofsted. I think in the more recent times that has improved significantly under the new head.

132. I think there has been interest on the culture of inspection. Finally, I posed this question a fortnight ago, particularly on the health side. Instinctively I favour the setting of more local targets. How do we marry that with the fact the public do not like the postcode lottery?
(Sir Michael Bichard) The postcode lottery in what sense?

133. If I live in a certain place I might get my hip operation or whatever much quicker than somewhere else and yet it might be a local priority in certain areas, that sort of thing?
(Sir Michael Bichard) This is a difficult issue, I think. It is a wider issue than just about targets, it is an issue about how much the public are prepared to accept different levels of service around the country which is an inevitable consequence of a real devolution. My view is that the media are increasingly unsympathetic to different levels of service. We had a national media and they expect national standards of service. My belief is you get a lot out of devolution, you cannot run systems entirely from the centre. You and I are probably identifying a problem to which there is no easy answer. I would defend, however, the need for local targets so that local people can hold their performance unit to account. They are able to draw comparisons, of course, between what is happening in their area and what is happening elsewhere. That may well be uncomfortable sometimes but sometimes they may have a point. Sometimes they may be saying "Look at that authority which seems to have achieved a different level of priorities as expressed in its targets and we think that they are right. We would rather you did give a higher priority to this target and a lower priority to that target". I think that is an entirely healthy process. It can be uncomfortable and I think the delivery unit needs to be pretty mature and robust to be involved in it. What happens without it, people have no idea, do they, about what is happening in their hospitals, that does not seem to me to be acceptable either. The hospital itself has no real idea, I have said on two or three occasions, where to focus its energy and its limited resources. That is a debate which has to happen and has to end up with clearer priorities articulated in the form of clearer targets. You do need local ties. We could not have done what we did�it was not an unalloyed success but I think literacy and numeracy has been more of a success than a failure�unless we had targets at national level, local education authority level and school level because it is at the school level that you need the ownership and the target at the school level has got to be more about how do we deliver improvement on what we are doing currently. They need to know what it is that they need to do in that school as their contribution to the national target being met. If you cannot tell them that they are not interested because they have not got any influence over it. I remember part of the PSA discussion I had with the Treasury was they wanted to set me a target for controlling inflation. There is a limited amount I can do to control the level of inflation. I was responsible for the Employment Service but even so it is not a target which is designed for me to have ownership. You must have ownership at the local level.

134. Coming back to the previous point, achieving the target in terms of literacy and numeracy for some schools meant the loss of music.
(Sir Michael Bichard) Of course in my new role I could not possibly condone that or accept it. We could have a long debate about whether that was necessary.

Chairman

135. We have just got a very few minutes so if I could sweep up on a couple of things and then ask you if there is anything we have not asked you which you would like to tell us, particularly on the recommendation side. I think we are trying to extract what we can out of you. You know the old adage about you do not make a pig fatter by constantly measuring it which you put alongside the adage which says you do not know if the pig is getting fatter unless you do constantly measure. You introduced helpfully the notion of performance indicators as well as targets, is the argument that you cannot have too much measurement in Government? We have now a great industry producing measurement in Government and volumes of performance indicators produced, there is a whole enterprise doing it. Should we welcome that simply as the more measurement the better because that just tells us more things or should we worry about that too?
(Sir Michael Bichard) I think I should step back at this point and say all the things I have been saying suggest that probably we have got too many targets and too much measurement at the moment. I have been defending the concept of targets because I think they are really important but I think you can have too much of it and you can measure things too often and I think we have probably got to the point where that is the situation and then they lose their impact and become an obstacle rather than a facilitator. That is probably the point I need to get across.

136. Let me take you back to what I started with which was the league table, this kind of test case for all kinds of things. Are we clear what these things are for? Are they to shame people? Are they to produce peer pressure? Are they to trigger resources either more or less? Are they to enable people to choose but of course, as has been said, that is often not possible? Do we know what these things are for?
(Sir Michael Bichard) I think they are for a number of those. I think that is their strength actually. Whatever teachers say, whatever head teachers say, they look at those tables and they know the schools in their area or in similar areas which have similar intakes and they know whether or not they are performing well and frankly so do the governors. I am a governor now of a college and we know where we should be and whether or not our performance has improved against our peers. I think they do impose some peer pressure but they do enable also parents to ask questions. I think it is very difficult for some parents to get behind the facade which is put up by a school when you are deciding whether or not you want your child to go there. Obviously the school is telling you all of the good things and I think it is useful to have some information which enables you to challenge that a bit and to ask why in comparison to other schools or why in this particular area you do not seem to be doing well. I think frankly a head or any manager in any public service who has not got the courage to answer those questions is a pretty weak minded individual. People who are running public services have got huge amounts of power and huge amounts of information. This is just a way of encouraging them to share some of that with the clients and I do not think that is unreasonable.

137. Just a couple more final things. You tended to talk about targets being annual things as part of business plans but then you said they needed to be constantly refreshed and reviewed.
(Sir Michael Bichard) Yes.

138. I wonder just whether an annual cycle actually does capture strategic business planning and whether that cycle is right. Also if there is constant review and refreshment going on how on earth can you get any serious measurement of this because it is a moving target.
(Sir Michael Bichard) I do not think you should change everything every year, that is stupid. I think you need constantly to be keeping an eye on the way in which you formulate the targets. You need to be clear that your targets are still reflecting your priorities. If priorities are changing your targets ought to change as well probably. I do not think you should be doing that constantly, changing it constantly because people do lose sight of where on earthy they are. Of course you are right in some areas, not geographical but functional areas, you should have three, four, five year targets. The literacy and numeracy target was over an extended period but it was then broken down so people were clear what they had to do year on year in their particular unit to deliver what we wanted over a five year period. We missed it at the end of the day, not by that much but we did miss it. Yes, there are some areas where you ought to have strategic five year targets. As I said people are going to be quite reluctant to do that now.

139. You implied this earlier on but when we reach a point where a Secretary of State has to resign, at least in part, because she is attacked for not meeting a target that she announced or had been announced by the Department some years previously and she is hounded by the media for the same reason, do we not just consume ourselves coming backwards?
(Sir Michael Bichard) It is a totally bizarre situation where we have the world beating a path to our door to find out how we have achieved what we have achieved on literacy and numeracy over the last five years and we regard it as a failure.

140. Unless you have got any parting shots for us?
(Sir Michael Bichard) No.

141. You have been extremely helpful and we shall draw shamelessly on what you have said to us. We are very grateful. I cannot promise that we shall not invite you to come again.
(Sir Michael Bichard) I enjoyed it as ever. Thank you very much.

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MR ROGER THAYNE OBE, COUNCILLOR SIR JEREMY BEECHAM, MR MATTHEW WARBURTON AND MR MIKE STONE

THURSDAY 21 NOVEMBER 2002

Chairman

142. Could I call the Committee to order and welcome our witnesses here to the inquiry we are doing on targets and league tables and measurement inside government. We are delighted to welcome Sir Jeremy Beecham, Chairman of the Local Government Association; Mike Stone, Chief Executive of the Patients Association, and Roger Thayne, Chief Executive of the Staffordshire Ambulance Service. We ought just to spend a couple of minutes, though, because there is some interest in your appearance here, Sir Jeremy, on just clearing away where we are at in terms of the fire dispute, if you do not mind. Can you bring us news from the front line? Are we on the eve of a settlement?

(Sir Jeremy Beecham) That is a question that really ought to be directed at the general secretary of the FBU. I hope we are on the eve of a settlement and that the strike will be called off but that depends on the response to the offer which the employers' side are considering this morning before putting it formally to the FBU. To coin a phrase from today's agenda, our target is a service which is better able to prevent risk to life and limb by more flexible use of skills within the service and, for that matter, to respond more effectively to a range of emergencies in collaboration with other emergency services such as, indeed, the ambulance service. It is in that context that the offer that the employers' side are discussing this morning which they, I assume, will put forward shortly, will very firmly link modernisation and change to pay so that pay increases will take place against validated, delivered change in the service which is an aspiration which has long been held but, alas, not significantly been advanced over recent years.

143. Some say that the fire service is the last great unreformed public service. Is that right?
(Sir Jeremy Beecham) Well, I have not examined all the others, but certainly it does need reform.

144. Does the proposal that has come from the employers involve some government money?
(Sir Jeremy Beecham) Our view is that it is unlikely that the modernisation we are seeking will of itself generate all that may be required to finance the new structure in cash terms. We would certainly, however, be inviting government to consider the cost benefit implications of some of the changes. For example, one of the things we are pursuing is the first use of life-saving equipment, say, defibrillators, for cardiac victims at the scene of an accident. That will not necessarily produce a cash saving but it will save lives and there will be other areas, particularly on the preventative side, where a cost benefit analysis would show potentially significant savings across society as a whole�or, to take an example, the joint use of control means, if that progresses, would save not only money for the fire service but also for the ambulance service potentially and the police. So we would be looking for some recognition of that but we recognise that there will be significant cash savings that will accrue as well from some of the changes we have advocated, and that has been adopted or extended.

145. This idea of using the Audit Commission to validate any settlement would be quite new, would it not?
(Sir Jeremy Beecham) Well, it would be new but we do think it is essential, given the record of really the last couple of decades of talks taking place around modernisation but nothing much being achieved, for the public and the government to be quite satisfied that change is actually delivered. The Audit Commission, of course, reported at length on the fire service in 1995 identifying the fact that although, generally speaking, there was a good service, nevertheless it found a number of areas which needed improvement and where efficiency could be improved, so they have a track record of interest and involvement in the service. They are not uncritical of either local government or government from time, and they come to it clearly with that sort of stature, and we think that they are the right body to validate the improvements that we are seeking upon which pay increases would be conditional.

146. Are they happy to have that role?
(Sir Jeremy Beecham) My understanding is they would be prepared to undertake that role.

  147. Could I bring Roger in? Roger is my ambulance chief and, as people will ask you shortly, you sorted out the ambulance service in Staffordshire and you have made it the best ambulance service in the country by radical re-organisation. What on earth would you do if you got your hands on the fire service?
  (Sir Jeremy Beecham) Retire!
  (Mr Thayne) We have got tremendous respect for the fire service and I think we have to understand that fire and ambulance are two distinct things and not try to justify a large fire service by taking over some of the ambulance work. Around the world you can see that being done, you can see it in America, etc, and there is a belief that it saves more lives but there is no proof that it does. So that is the first thing. Secondly, I think that we have to adjust the service that we provide to that that the public needs, not that we think they need but that the public actually need, so we have to be there at the time and the days and the location�that is all that we have done. Just by doing that, you do not need extra funding. You can pay staff more money, which we have done; you can save more lives; and you can satisfy the public; and you know from your own experience that the people at the front line are absolutely superb, whether they are firemen, policemen or ambulance people. A lot of them are working in very bad systems which prevents them from being efficient, so all we did in Staffordshire is improve the system.

Mr Prentice

148. Sir Jeremy, on the fire service, there must be a lot of people out there who are perplexed that working practices agreed in the year of the Queen's Silver Jubilee should remain completely unchanged in the year of the Queen's Golden Jubilee. Who is responsible for allowing this situation to continue? Is it local government or is it central government?
(Sir Jeremy Beecham) I think both, to a degree. Certainly until the Home Office ceased to be responsible for this in 1997 they were notably reluctant to address these issues or indeed encourage local government to address these issues and for that matter, clearly, as we can see from the prevalence of 50 year old Green Goddesses took no steps to provide a reserve of more modern appliances for which trained military personnel might be available in the event of things unfortunately going wrong, as they have done recently. So I think there was a lack of will there and, as far as local government was concerned, although we have tried to raise these issues, there was no leverage because the pay formula was an automatic one which suited the union very well until last year or so, therefore there was no leverage in the context of annual negotiations which could be applied. Having said that, I would not deny that maybe a more vigorous stance might have produced an effect, although one could not necessarily guarantee that.

149. Can I just bring us forward to 1995? The Chairman mentioned the Audit Commission report and I have had a look at that and it recommended review of fire station crewing, matching control room staffing more closely with workload, sharing control room facilities with other brigades�all the stuff that is on the agenda now and that was in 1995, seven years ago. What happened to that Audit Commission report? Was it discussed?
(Sir Jeremy Beecham) It was discussed and, frankly, kicked into the long grass by the FBU.

150. So the FBU always had an arm lock on everything?
(Sir Jeremy Beecham) That is right and because we had no way of prizing that loose in terms of making pay conditional upon change, which is now the situation that we are in, there was no way of advancing the argument. There are other areas which government itself could have addressed. There is an archaic disciplinary procedure which gives an individual fire fighter the right of appeal in a disciplinary matter up to the then Home Secretary, now presumably Deputy Prime Minister, under military style regulations which the government is responsible for and could change, if it chose to do so.

151. Lastly, the cost of the fire service to local government. When can fire fighters retire from the service?
(Sir Jeremy Beecham) They have a generous pension scheme. They can retire after thirty years' service. The optimum time I understand is 26 and two thirds years, upon which they can retire with a full pension.

152. Would that be at the age of 50?
(Sir Jeremy Beecham) Yes. Indeed, I recently responded to an article in my local newspaper by a fire fighter who described himself as retiring "next year, now aged 49", and pointing out that possibly this attractive pension scheme may be one of the reasons why there are 40 applicants for every vacancy.

153. So on this question of retiring at 49 or 50 on a full pension, did alarm bells not ring in local government when you or your people discovered that 70 per cent of fire fighters retired early on grounds of ill health?
(Sir Jeremy Beecham) Yes, but this is not by any means confined to the fire service. You will find similar levels apply to the police service�I cannot speak for the ambulance service. The police service also has had higher levels of retirement on ill health grounds at a relatively early age. The question of the pension costs of police and fire services has loomed very large in our argument with governments of both colours over many years, because it is now absorbing an increasing proportion of fire authority budgets as it is an unfunded scheme. This has been one of the problems and now I think something like 30 per cent of the fire fighters' budget is going straight out in pensions which are pay as you go rather than having been funded.

154. 30 per cent?
(Sir Jeremy Beecham) Yes.

Chairman

155. As a reader of your expressions, Roger, I can see your face doing various things! Just tell us what you are thinking.
(Mr Thayne) We have no early retirement. Ambulance paramedics and technicians go on to 65. Traditionally not many reach that age and they have a very short life span after retirement. What we have done in Staffordshire is introduce a retirement employed scheme where they can retire after thirty years and come back and work part time. We now have the oldest average age ambulance service in the country, and what we find is that those experienced individuals contribute greatly both to the training of our new staff and to the treatment of patients. In terms of pay, a senior paramedic is paid less than a junior fireman, and the chief executive of the ambulance service certainly in Staffordshire is paid about 50 per cent less than the chief fire officer. Our budgets are about a third.

Mr Trend

156. Going back to the current dispute, because others were speculating about a possible gap which has opened up which might need to be bridged between an immediate increase in costs due to increased salaries for the firemen, and the possible benefits which might come from savings somewhere down the road. It has been suggested there will be a gap that needs to be bridged. Is it your view that the government will have to put in extra money to bridge it?
(Sir Jeremy Beecham) We would certainly be looking to the government to help us bridge that gap and we would expect a reasonably sympathetic response. Some indications from the Deputy Prime Minister publicly were that that might be the case. It would make sense because it is, in effect, investing to save which is certainly a legitimate conventional approach for government, and we also think that our proposals are consistent with the Bain approach which envisages, quite apart from the immediate 11.3 per cent, a new formula being applied and it is the application of the new formula from next November which, if that is agreed this morning by the employers' side, will lead to the overall package.

Chairman

157. Let us move into more general territory now, if we may, which is why we brought you here in the first place. What I would quite like to do, because we hope to be done by half past eleven for a variety of reasons, is to ask Roger Thayne this to start with: Roger, the reason we invited you is that you are an example of a successfully modernised bit of the public service, and what I would like to ask you is what role did targets play, particularly targets from the centre, in bringing that around, or was it a question simply of domestic management?
(Mr Thayne) If we go back to when we started in 1992, we became an independent NHS trust and we only had one target which was to balance our books at the end of the year. Obviously that had an implication but what we had to do very early on is turn the pyramid around. If I can explain that, a typical public service is where everybody is looking up, so the service is looking up to its managers, the managers to the chief executive, the chief executive to the next level, and of course you are there to look after the public and the important focus is between members of the public who get that service and the staff who provide it, so we had to turn that pyramid completely round so that we were looking as the top management at what our managers were doing and they were looking at what staff were doing in order to provide the service that the patients wanted. We also had to tackle the sort of public service mantra that we could not do it because we had not got the money, and if it was not money it was trade unions and staff, and if it was not that it was the public making unnecessary demands on us�in our case there was too much traffic. We never came to the real reason which is that we had bad managers, and the management was poor. It was not that the people were poor�there was no system. So there was this view that you just could not work out where the next emergency was going to come from or when that was going to come. When you looked at it, it was everybody wanted to work a 9-5 Monday to Friday day and, if you could not do that, they wanted to work a reasonable shift pattern so you could sleep at night, etc. Nobody was talking to the public and nobody was listening to the public and seeing what they wanted, and what we found in the ambulance service was that was quite simple: what they wanted when they rang for an ambulance was to get one as quickly as possible, and for people to be polite and caring and take them to hospital. That was not too difficult to achieve and by talking to the staff we began to see where the problems were. I had a deputation very early on from senior ambulance officers who complained that I had been going into ambulance stations and talking to staff, and they said, "You might have done that in the army but we do not do that in the ambulance service", and that they were a bunch of liars and they told me all sorts of stories. What I managed to get across to them is that within six months I would probably know more about the service than they did, and that the staff did know, and we saved an awful lot of money by engaging the staff and engaging the public. It is not really rocket science in what we did. As the service improves, the standing of the paramedic and the staff you employ improves. What is critical to them is not that they are meeting government targets but that they are feeling they can provide the service that they are paid to do, so, for instance, the more people they get back from cardiac arrest�and we lead just about the world on doing that in Staffordshire; you are 15 times more likely to survive in Staffordshire than if you had a cardiac arrest here today or anywhere in London�that really does empower the staff and get them to accept the changes. So by turning that pyramid round, that has allowed those improvements and has met public satisfaction. I have to say it has got me in a lot of hot water�

158. That is why you are here, but what I am getting at is we are trying to get the model of public service reform here. You did not stick around waiting for the centre to send you a whole list of targets for you to reform your service. You came in and decided this service needed reforming and got on and did it. Are you recommending that as a universal model or do you think we do need a centre to come and sort out bits you cannot sort out?
(Mr Thayne) That is a universal model. It is the way I was trained by the armed forces which is to listen to soldiers, to look after them and to operate a system that allows us to do our job, and I think the British armed forces demonstrate time and time again that that system works. That is all I did. I did not know any other system and, therefore, what I am saying is that public service is full of very dedicated people, particularly those dealing with the public, working in very awful systems and you are not going to change that by targets�you are going to change that by culture and changing the culture of management to improve those systems.

159. Just one more point: I know also you have some fairly robust views on how the target and performance measurement regime has been working in the ambulance service latterly, not least I think you think that it is being fiddled; that some of the measures being reported cannot possibly be true. Could you tell us something about how that works?
(Mr Thayne) Yes. Ambulance services are under tremendous pressure to meet the 8 minute target. The good Lord gave us 8 minutes when we stop breathing or our heart stops to be resuscitated. After that you have no chance. The NHS plan sets a target of achieving a 75 per cent response in 8 minutes to all life threatening emergencies in order to get those survivors. It does not measure how many people survive so it allows a degree of movement in terms of response times, and the way that this is calculated gives individual ambulance services a chance to decide when the clock starts, so it might start some three or four minutes after you make the call and still be within the rules. It also gives you an opportunity to decide whether an emergency is life threatening or not so in most of the country, if you are having chest pains and possibly a heart attack, it is not life threatening�it certainly is in Staffordshire. In some services the percentage of life threatening emergencies is as low as 9 per cent and in Staffordshire it is 50 per cent, so what we are saying there is that pressure from the government to hit a particular target is resulting in people perhaps using all the leeway they have to reach that. Of course, if you were measuring the target properly, that is how many people survived, you would not have a problem.

160. So they are genuine outcome targets and not processed targets?
(Mr Thayne) Yes. It has to be outcomes. When you or I or anybody else accesses the NHS all we are interested in is outcomes. However, we do not measure the outcomes in the NHS.

Chairman: That is most interesting, as well as establishing that if you want to avoid a cardiac arrest you had better live in Staffordshire by a wide margin. We have our own military man, Ian.

Mr Liddell-Grainger

161. Do not work in London, Tony, I think is the answer to that! Coming to Jeremy, looking at your briefing paper, how many targets do you think the government should set that can be achieved in a year? You said there is a reduction from 160 to 130. How many targets would you think? You were head of Newcastle Civic council for a long time and you have a background as a solicitor. What is a reasonable figure?
(Sir Jeremy Beecham) I would not like to pluck a figure out of thin air.

162. Have a think about it?
(Sir Jeremy Beecham) I think we have to start with principles, namely that you have to look at outcomes; you have to have targets that are meaningful and that are understandable�both to those delivering the service and to those receiving the service or who are accountable to those receiving the service�you have to avoid ticking boxes and bureaucracy. I think all I can say is that 140 is far too many. We have adopted an approach with government of agreeing seven shared priorities over a range of public services, many of which are interconnected. We would like to see targets that measure outcomes concentrating on those areas and not others. For example, library services, for perhaps understandable reasons, are very keen to establish targets for the number of books lent per thousand inhabitants. Well, this may be desirable but it is not of as high a priority as, for example, ensuring that children at risk are allocated to a social worker within a proper time and that they remain safe, so it is a question of identifying the priority areas for targets and making sure that targets are reasonable. I am a member the NHS modernisation board, so if I may I will stray slightly in the direction of my two colleagues here: one of the targets in the NHS is for people to be referred to a specialist and be seen in the case of suspected cancer within a fortnight, which is fine, but there is not as yet much follow through in terms of treatment following that initial investigation, so that is a starting point but is not particularly helpful, so they have to be related to the overriding priorities and they have to mean something in terms of service and outcome. Beyond that, I would say that that it really ought to be agreed rather than laid down between the partners, it might be the NHS or local government with central government. There is I think a case for targets and benchmarking because part of the exercise must be to raise the expectations of those responsible in government, central and local, about what is achievable and amongst the public who need the service, and so benchmarking and targets have a place but not at the expense of service delivery.

163. Reading through your brief, you say that the government must avoid simply "managing to targets" and keep "in view the ultimate objectives the targets are intended to deliver". As the Local Government Association, are you trying to pressurise government to come up with more realistic targets? You were comparing the consultant situation but are you saying, "Come on, you really have to sit down and think about this a bit harder", because all you are doing is putting a reasonable level of bureaucracy on to people throughout public services, from Newcastle city council to the Health Service. Are you becoming quite vocal in this?
(Sir Jeremy Beecham) Yes. We have been pressing government to simplify the expensive superstructure inspection and regulation of which this is part because, as the Audit Commission itself has recently reported, that process is somewhat demoralising as well as being very time-consuming of staff, and in particular the way some of the information is then used in the form of league tables can be very misleading and also demoralising and demotivating without meaning much to the people outside. Frankly the only league table that matters to my constituency is the one in which Newcastle United feature but that is not to say that we should not be helping them form a view about the performance of my authority�or, indeed, any local authority�in relation to key services. But simply this counting as the top of the league does not mean anything very much.

164. Mr Stone, going on from that, your conference in Brussels where you were seen to do rather well, things like league tables are very important to you in what you do within the patients' charter. How do you see things like league tables and targets within that narrow band?
(Mr Stone) I think they are very important. We are not saying for one moment that they are not. They are very helpful as management tools, for example, but they have to be targets that are meaningful, that the public can understand, rather than just coming out with a hospital league table and saying, "This particular hospital is at the top". The public want to know why. What we also have to say, though, is that we do not want to see the NHS, particularly in terms of our area, caught up in this overwhelming bureaucracy. There needs to be proper measurement, meaningful measurement, but at the same time the doctors, the nurses and the people in the frontline still have to have time to see the patients. The patients are the very reason for the NHS, and that is key. Without a doubt the public becomes slightly confused by the targets and by the league tables, and, as was pointed out in the survey on Radio 4 last month on the targets that are set for many NHS managers, with 12 per cent of those people questioned, senior NHS managers admitted to having to massage the figures to meet the targets set by government and that for the public to hear is very worrying.

165. You talk about waiting lists, and we have seen waiting lists and seen cancer being pushed forward�but surely this is all totally unrealistic. My NHS hospital in Somerset did not necessarily have a cancer specialist but they do now because they are having to get it. Has the whole thing got out of sync?
(Mr Stone) If we can look at the wide picture and then go into that in more detail, it is very interesting that for the last three years government has come up with waiting lists and about how many people are on a waiting lists. The public do not care about waiting lists; what they care about is waiting times. How they as individuals are going to have to wait in their local hospitals�that is the key. I hope it is something to do with the fact that we wrote fairly strongly on this line in the media but the government are now looking at waiting times and measuring them which is very important to individual patients. In terms of looking at individual hospitals and cancer specialists, etc, what the public want at the end of the day, whether they live in Somerset or Newcastle, is to know that their local hospital will give them the treatment they need, and one of the keys is, it is all very well saying that if you have cancer you will be seen within two weeks but let us look at the follow-up treatment. That is where the real targets have to be looked at. It is all very well to say that within A&E departments you will not wait longer than such and such, but it is not standardised across the country in terms of how that measurement is taken.

166. Can you standardise it?
(Mr Stone) I think we can.

167. How?
(Mr Stone) I think, firstly, you have to look across the country and look at the variability in terms of the worst performing hospitals and the best. We are meant to live in a country with a National Health Service which, by its very name, implies a national high standard of care across the country. We know that is not happening. We only have to listen to Roger in terms of the ambulance services and the variability around the country that shows in the ambulance services, the response times which are not the same, in the A&E departments in hospitals�the waiting times can vary hugely throughout the country. In terms of standardisation, I am not the person to ask. What I am saying is it should be down to my colleagues in the NHS.

168. Your response time in Newcastle compared with the response time in Somerset is going to be different�Roger shakes his head!
(Mr Thayne) The patients are not different, so if there is a clinical need to be there in four minutes then it does not matter where you are, and there are ways of doing that. For instance, the highest village in England is in Staffordshire, a place called Flash, and as we told the Prime Minister when he visited, you get defibrillated quicker in Flash than you would in 10 Downing Street, and at lower cost.

169. How do you do that? Do you place ambulances?
(Mr Thayne) You go to Flash and you tell the people you cannot get there in the time; they understand it because they live miles from anywhere; and you help them provide their own ambulance service. Pretty simple.

Mr Liddell-Grainger: All right.

Chairman

170. I would have thought you would have got that as a military man, Ian!
(Mr Stone) Just finishing on that point, what we have to say in terms of us as the Patients Association, looking at patients, we have to ask why services are different, and it is up to managers and providers to see that the service reaches that same high standard that we as patients expect.

Kevin Brennan

171. Roger, do you think it is important that employees and managers know exactly what an organisation's targets are?
(Mr Thayne) Yes. The targets are pretty simple. You do not need to know what has been set above them to know what demand is set by the public. I think one of the problems we find on the NHS is that most performance is linked to morale, and if you are there treating patients and you do not believe you have the wherewithal or the time, or you are not treating them by clinical priority, and if you are not allowed to do that your morale goes and your ability to perform then drops, so you have to make sure as an organisation that you keep the morale up and that people feel they can provide that service�and they all know that. Every doctor, nurse, paramedic, fireman, knows what they have to do. There is no problem there. Basically, if you are meeting public's wishes, then you should meet the targets. If you do not�well, the targets are wrong and you should not have them.

172. The reason I ask is you have explained in a very simple, straightforward and impressive way what you have done, yet you say in your submission that you have set yourself 96 targets. Could you name them?
(Mr Thayne) We call them performance indicators and nobody sits there collecting them�they are extracted fairly automatically from our IT systems. For instance, if, during this meeting here, we get a successful resuscitation my pager will go off. You will not hear it but it will tell me, and nobody has had to physically do that; it is set up so that when that happens a lot of people are informed. Before we improved the IT we had lots of people collecting the information which was of very little value and went nowhere, so just like the speedometer on your car you keep an eye on it to make sure you know where you are, and managers need to concentrate in those areas that need attention�not those that do not�so we monitor that very carefully. For instance, I know where every ambulance is and if you come to my office you can see that and if you come to my home you can see that, and we have a very rapid system of putting on more resources should we need it, and that can be very important.

173. But there is an important distinction here because you have said in your submission that you have set yourselves 96 targets but actually what you are talking about when you say you have done that is that it is not 96 things that you expect your staff to have in their mind and be aiming to meet�
(Mr Thayne) Not at all.

174. You are just saying, "As managers we monitor these aspects of our operation as an outward sign of inward grace, if you like, as a way of telling whether or not we are doing our job properly but we do not expect our staff to be worried"?
(Mr Thayne) We set ourselves one target which is for them to remember that every patient is somebody's mother, father, brother, sister, son, daughter, husband, wife.

175. That is the target?
(Mr Thayne) Yes, and you do not need to say anything more than that.

176. Because we have taken a fair amount of evidence in this and I would be interested in the views of the other witnesses as well about this. What is clear I think is that most of our witnesses really are telling us that you can have too many targets. It is very important to have a small number of targets and it is very important for staff that those targets are achievable, but do you think that organisations should expect to meet all their targets?
(Sir Jeremy Beecham) I do not think that it is realistic to expect every organisation to meet every target on or by a given date. That assumes a uniform level of performance which it is in the real world impossible to achieve. They must to some degree remain aspirational. In fact, in a sense, if you met them all then perhaps you are underselling what might be achievable anyway. Some of these targets ought to be a bit more aspirational and a bit more stretching.

177. But when you do that do you not encourage the problem of demotivation?
(Sir Jeremy Beecham) Well, that is the point. It is a question of recognising that you are not necessarily going to achieve everything you have set out to do. It does not necessarily imply criticism of the service if they do not manage to do that and that is where the league table argument comes in. So often it is used in a primitive way rather than seeing the evidence as perhaps requiring some further investigation, some change and so on, and in a more supportive and constructive way, so one should not be using them to criticise but use them as a means of advancing them. I think people respond to stretching targets and to an aspirational role provided that if they fail to meet them they do not feel they are going to be singled out for unfair criticism. That is a cultural change that we need to see from on high, really. I think it is fair to say to a degree it has changed a bit but in the early years the naming and shaming pattern we saw on occasion in other departments was very counterproductive and I think up to a point there has been a shift, and that is good.

178. One other point: do you think as a general principle that you should get more money if you are failing to meet the targets or if you are achieving all of your targets?
(Sir Jeremy Beecham) There is an interesting argument about rewarding failure. I think we need to support institutions, whether they are in LGA or Health Service or wherever that are not delivering adequately, and it may be that part of that is because of under-investment and if that is a cause then that needs to be addressed. Investment should not be seen as a reward but as a necessary condition of improvement. I think up to a point it is reasonable to incentivise good performance by perhaps some additional financial reward but it has to be kept modest because, given the pressure on public resources and the evident need to invest across systems, it would be wrong to distort the pattern by simply loading money on to success, because you could simply widen the gap and create the two tiers that one fears may emerge in, say, education with, for example, poor inner city technology colleges or academies against other schools in the area, or which you might see in the Health Service with foundation hospitals which would receive significant extra resources over other hospitals. This debate is about to start, is it not, and there is some scope for that but I would not like to see too much emphasis placed on pouring money on those that are achieving.

  179. Can I ask Mike Stone about that matter of foundation hospitals?
  (Mr Stone) In terms of foundation hospitals we are very much waiting still�as Sir Jeremy said, the debate is just about to start. What we are keen not to see is a two-tier Health Service. In terms of targets they are very much management issues in many ways. What the ordinary patient is looking at is when they are in the back of an ambulance having a cardiac arrest the one thing they are interested in is the target of getting to the hospital in time, the fact that their life is going to be saved. Those are the real targets the patients see. That is the front line and where we have to come from. Looking generally, targets are set by well-meaning. The targets that are set in many cases are targets that people genuinely believe will improve the service, but they must not become tick boxes, something where people can tick that box and say "We have done that". For example, if you take community health councils in terms of their casualty watch, in one hospital they found that in the A&E the waits were getting so long that all the NHS managers did was take the wheels off eight trolleys to make them into beds rather than trolleys�that is not a meaningful target. That should not be happening.
  (Mr Thayne) Mr Brennan, you have alighted on the biggest problem of all which is the disincentive of performing. There is a disincentive to individuals and organisations to perform because there is this public service belief certainly in the NHS that we need more money and it is all down to money. If you are performing well you need less.

180. Did anyone tell you to cover up your good performance so that others would not feel embarrassed by it?
(Mr Thayne) I am not allowed any more to announce it to the press. There is a ban on me on that side.

Chairman

181. Who has banned you?
(Mr Thayne) It was the regional health authority. The problem is that if you blow your trumpet too much people in neighbouring authorities ask, "Why are we not having the same standard", but in terms of funding, �21 million worth of additional funding was put into improving response times in the UK and we were told we would get not a penny of it�our share would have been about half a million�because we had already achieved the standard. That is not a political directive: it is a civil service directive. In fact, our local politicians fought on our behalf. The minister at the time rescinded that and made an award of �150,000 which we gave to our staff for pay. So there is that disincentive. Locally all our funding comes from our local purchasers, the health authorities, now the PCTs, and if you examine our funding from 1992 to date it has been the least of any ambulance service in the UK because of our performance. We are expected year on year to improve our efficiency by 10 per cent. There is not a single organisation run by government that has that target or gets anywhere near achieving it. We see it as a challenge but it is getting increasingly difficult to meet. We have done it every year for ten but we are running out of time in being able to do that. So there is a disincentive. My colleagues in the ambulance service say that we are the fools, and therefore without any doubt the emphasis is on just about meeting your targets and saying that to improve anything or to give any improvement you need more money. That culture has to change because it very rarely is money.

Kevin Brennan: Are ambulance drivers planning a strike?

Chairman

182. So if you were doing worse you would get more money?
(Mr Thayne) Yes. Without a doubt.

183. Jeremy, when you hear this and you set this alongside all the local government material about reward for good performance and floating off to new freedom and so on, it does not add up, does it?
(Sir Jeremy Beecham) Freedom is not a reward. Freedoms and flexibilities are tools to achieve a better delivery of service and what we have in the local public service agreement framework is a modest performance reward if you achieve the targets that you and government have agreed are applicable to local circumstances, some of them drawn from national targets and some derived locally, and if you achieve these things then a modest amount of cash is available, but that is not the motivator. The real motivator is getting on and dealing coherently with local issues. But I can echo Roger's experience with the ambulance service with what happened over what is becoming increasingly the vexed area of hospital discharges, because extra money was awarded last year to authorities and areas which had a greater problem with this, whereas adjoining authorities which perhaps had managed to crack the issue did not receive extra resources, and there was a certain amount of resentment, let's say, in Hammersmith & Fulham compared to its neighbouring authority which had not invested its own resources in this area. But it is a dilemma because from the patients' point of view you want to see the service improving and if it takes an extra resource in that context then that has to happen. But if you are benchmarking a level of service across similar types of, in our case, authority, then you are providing the means by which elected representatives can examine and scrutinise the performance of their authority and that public demand can be articulated and the media, if they get round to doing their job, can examine how the authority or the health trust is operating and can also bring pressure to bear, so it is an iterative process in which you have to start with what is capable of being delivered and what ought to be delivered, and if there is a gap then seeing how that can be addressed. It may be a question of resources; it may be a question of the kind of management Mr Thayne has brought to Staffordshire; but good practice has to be disseminated and, in fairness, the government tries to achieve that in beacon council schemes and we in the LGA have tried to do it through the Improvement and Development agency and our own networking and so on, but I do not think that large cash inducements are themselves going to turn matters round.

Mr Hopkins

184. I have much enjoyed listening to all three of you, particularly Roger Thayne, and I would like to hear more. I agree with everything you said. You are critical of some managers and I agree that a good manager with good intelligence is worth their weight in gold. Unfortunately there are not enough of them. Sometimes poor managers are stuck in the wrong jobs for years and the whole service can be ruined as a result. I wanted to address a question to Jeremy. In your submission on the 2002 spending review you said that spending currently assumes efficiency savings of 2 per cent per annum and that �19 billion of additional funding is required. Now, I am a governor of a sixth form college and unlike schools we have had to suffer under so-called compulsory efficiency gains for years. In a labour intensive service like education this means larger classes and it is a nonsense, especially when schools do not have that pressure. Indeed, sixth form colleges are I believe the jewel in our educational crown. They do a better job of educating 16-19 year olds than any other form of education in Britain. I would stand by that and argue that case. Is it not possible to put to government that the blanket application of efficiency gains is a nonsense, especially in public services where sometimes improving a public service might mean increasing labour intensity rather than reducing it? For example, in nursing one can easily make an efficiency gain by for example cutting night nurses from two to one on a ward, but it means that patients get less good care. Improving the service, unlike manufacturing, means applying more people rather than less and one has to look at outcomes and what we are really trying to achieve, not simply apply a percentage cut in funding every year.
(Sir Jeremy Beecham) I entirely endorse that. That is exactly our position, that to regard efficiency savings as cash savings does not do justice to the real issue which is the question of improving services. As I said at the beginning of this session in the point I was trying to make in relation to the Fire Service, there will be some cash savings, no doubt, from some of these measures but there will probably be a greater outcome in terms of an improved service by the changes that we are seeking to put through. To expect year on year a two per cent cut in the cash as a result of savings is entirely misleading. There ought to be a mixture of cash savings in some areas and improved services in others, but some of them entirely fight against each other. If you were to increase class sizes, for example, you could say that that represents an efficiency saving but the poor old teacher has bigger classes and that then fights against another target which is to reduce class sizes. It is absurd to treat this particular target as one which in the real world can be achieved in cash terms. We continue to make that case but it does not seem to influence the spending review outcome.

185. One more point: Roger Thayne referred to performance indicators rather than targets. To me the word "targets" makes me feel uncomfortable because they may be imposed and they may not be sensible, whereas a performance indicator is a measurement and everything has to be measured to see how you are performing and that is perfectly sensible. Could we not get across to government: performance indicators, yes; impose targets, not always a good idea?
(Mr Thayne) I would agree with you. In the NHS we have an NHS net so we are all linked up and it is quite possible, just as I am looking at the performance indicators, for those to be collected centrally so that we are all using the same indicators and it would save everybody an awful lot of bureaucracy and you could drill down very quickly. Just as I can drill down to a particular team and find the problem, a senior civil servant could drill down to a particular ambulance service or hospital or whatever. I agree with you: performance indicators are key. With fixed targets you tend to have to put a level on the target when really you should be trying to produce a maximum wherever you can.

186. A brief question to Mike Stone on a different subject entirely. Is he comfortable with the Government's proposed reforms in patient representation? Is that benefiting patients?
(Mr Stone) One of the things that we were very vociferous about was that patient representation is very important, but in terms of, for example, CHCs being abolished, that is the end of what we consider to be an independent statutory body which could go into hospitals and do things like casualty watch, etc. Whilst we are happy to work with the Government in terms of patient reforms and greater patient participation, it is still important for groups such as the Patients Association to be an independent voice for patients and to be still out there and still looking at, for example, performance indicators.

Sir Sydney Chapman

187. Just on the issue of firemen, there is something in the back of my mind. Sir Jeremy, you talked about cost benefits but, if I am not taking words out of your mouth, cost benefits ultimately, whatever settlement there is�and let us hope that there will be a settlement�are going to initially involve a lot of increased back pay, so presumably the local authorities will need financial help initially from the Government?
(Sir Jeremy Beecham) Yes. We acknowledge that within the pay package, which as we speak is presumably being finalised and proffered to the union, there will be two elements. There will be an element of normal pay increases for this year and next year, and there will be an element strictly tied to modernisation. You are right to say that, at least as far as the latter is concerned, some of that will not be covered by immediate savings or may not be covered by cash savings at all, and in that sense we would hope that the Government would indeed support the fire authorities in meeting that bill. On any view there will be transitional costs which will be met. This may or may not be the right policy conclusion but if one, for example, were to equip every fire engine with new life-saving equipment and train people to use it, there is obviously an initial cost in that and there is no cash return from that. There will be other examples no doubt of that kind. It is the case and we would hope and expect a contribution from government towards meeting that cost.

188. I want to persist on what call the how and why of targets. Mr Thayne, you first of all said that the target was for an ambulance to get to a patient within eight minutes.
(Mr Thayne) It is an ambulance response, so it can be a layman with a defibrillator, a doctor, a fully equipped ambulance, a paramedic in a car.

189. The eight minutes was set because that is the maximum time in which a heart can be restored after it has stopped?
(Mr Thayne) Yes.

190. But if I had my heart stopped I would be rather anxious that somebody got to me within, say, four or six minutes. The point I am making is, why 75 per cent in eight minutes? Why not 50 per cent in six minutes? Who actually sets the target?
(Mr Thayne) That goes back in time. When the current target was set we had a lot to do with it because we were performing way above the national standard, which was 50 per cent in eight minutes for an emergency, and we persuaded the Department of Health to go and look at similar high performance ambulance services, and they are all in America. They came back with a target of 90 per cent in eight minutes and 20 per cent survival for a cardiac arrest. In the American system, just as in our system, we look very closely at how we are going to get there in four minutes because you have got to start something in four minutes. After eight minutes there is very little chance of someone surviving because for that eight minutes it depends when the clock starts. Even if somebody has a cardiac arrest people dialling treble-9 puts another minute's delay in. We would like people to ring the Ambulance Service direct and we are working on that assumption. Getting to the scene is another issue. You could say the clock stops when you are at the scene but if you are on the top story of a 21-storey block of flats and the lift is not working, it can be quite a long time after that; you are perfectly right. What we monitor is minute by minute. What I want to know is not how many do we get to, 80 per cent or 90 per cent or even 100 per cent, in eight minutes, but how many do we get to in one to four minutes. This is the argument about putting defibrillators on other emergency vehicles. In fact, the police are the best vehicles. The majority of cardiac arrests are in the home and you have got to get there in four minutes. Anybody there in eight minutes has very little chance. What you have to get there in eight minutes is advanced life support; it is a paramedic or a fireman or a policeman or a layman with a defibrillator. The centre of our system is that we want to get CPR started, defibrillation within the first four minutes and the paramedic there in eight minutes. We believe that everybody can use a defibrillator. You do not need any training at all. It tells you what to do and there are pictures as well. This has been well tested around the world. You are totally right but of course when the Government sets a target it has got to be achievable.

  191. Mr Stone, you were quoted as saying about 18 months ago in The Independent that we are meant to live in a country with a National Health Service where, whether you live in Truro or Newcastle, you should be receiving the same service. I think we all know what you mean by that but actually, in order to pick an argument, we want the best practice to be given to every local authority, every Health Service, so you do not want a level service because that would create a common denominator, would it not? You want to encourage a Fire Service in Staffordshire to perform very well and then see that that is encouraged in others.
  (Mr Stone) Absolutely. It is about learning from best practice. I would not dare suggest that The Independent misquoted me in any way, but what I can say is that, certainly as I said earlier, we do live in a country with a National Health Service but it is about applying that best practice that is available in some small pockets within the country at a national level. People may say that that is not the reality, that that cannot be done, but patients demand that that can be done. That is what patients want and it is about identifying that best practice and disseminating that best practice across the country.
  (Sir Jeremy Beecham) It is about establishing a minimum entitlement, is it not, beyond which people will hopefully seek to go?

192. Sir Jeremy, if I have read about you correctly, you first were elected a councillor 45 years ago.
(Sir Jeremy Beecham) No, 35. It feels like 45.

193. Have been a councillor ever since?
(Sir Jeremy Beecham) Yes.

194. Oh, gosh. What I really want to ask you is this. As Chairman of the Local Government Association surely with the vast experience you have got you should be able to tell ministers, "Look: that target for that local authority is ridiculous. These are the meaningful targets you, the Government, ought to be insisting upon." Do you have a dialogue with the Government on that matter?
(Sir Jeremy Beecham) We have not really had sufficient dialogue about the targets as such. We certainly did not the first time around. It has improved a bit in the last spending review. Where we have made progress, I think, is in terms of agreeing the national shared priorities about which I spoke. Within that context we need then to continue the dialogue about what sensible targets can be arrived at, not just in local government as a whole, which is where we are at on the national scene, but at local authority level, and have a local process of encouraging individual councils and government. At the moment this is a county level process but it will hopefully be rolled out to districts to identify more precisely in relation to local circumstances what appropriate targets might be set, not just for the local authority�the local authority can play its part�but it might be central government, it might be the health trust, and so on. I think there is room to move in that direction but we have not really been involved sufficiently, I think, in the national targets that are there. With regard to performance indicators, on the other hand, that has been significantly reduced. It is now below 100 nationally and it started off at over 200. Equally, in terms of the plans that counties are supposed to be producing, you will hear next week, because we are going to have an announcement about freedoms and flexibilities, about reductions in that and more reductions for local authorities which have established that they are excellent providers of service. Government is moving slowly in the right direction.

Mr Prentice

195. Just on this point, Jeremy, I have your written evidence in front of me here on the national PSA for local government. You tell us that the LGA is consulted on the targets but it is the ministers themselves who decide the target levels. What actually happens during the consultation process? Do the ministers say, "This is what we are thinking about. Can we have your reaction?", or what?
(Sir Jeremy Beecham) These discussions normally take place at official level rather than between ministers and members except right at the end. To be honest, I do not think I can say that there is much effective dialogue so far on these things.

196. That means no dialogue really.
(Sir Jeremy Beecham) No, I would not go that far either. The decisions are certainly taken as it were unilaterally. They are not agreed. It would perhaps be better if in terms of national targets they were agreed. I do not know quite what happens in the Health Service either but I would have thought it would be sensible for the NHS Confederation to agree targets with the Department.

197. There is a whole list of targets here in your evidence. Can I just pick very quickly on two: by 2004 reduce school truancies by ten per cent compared to 2002. Is ten per cent just plucked out of the air? Is it achievable?
(Sir Jeremy Beecham) That is our impression.

198. That it is plucked out of the air?
(Sir Jeremy Beecham) I think it rather is. Moreover, it overlooks the somewhat limited role of local education authorities these days. Exclusions, for example, which are all part of the same pattern, are largely in the hands of individual schools and government policy is oscillating on this, discouraging exclusion on the one hand and then facilitating it on the other.

199. Could I characterise this as a meaningless target then?
(Sir Jeremy Beecham) It is not meaningless in the sense that it is a figure which might be justified in practice but one does not know how it has been derived.

200. But you are going to be held to this. This is the national PSA for local government.
(Sir Jeremy Beecham) Exactly. The areas are areas which we agree should be looked at. The way in which particular figures are reached is something that is not transparent.

201. What a Delphic smile that was!
(Sir Jeremy Beecham) A word in my ear from Mr Warburton reminds me that it is the Government that will be held to these targets, not local authorities. These are national targets.

202. One other example on this brief of yours. Improving the quality of life and independence of older people: we all agree with that, but the Government has set a target for increasing the number of elderly people who are supported intensively to live at home up by 30 per cent by March 2006 compared with the numbers in residential care. Did the Local Government Association in its discussions with officials that you talked about a few moments ago go along with that because there are huge implications for the number of residential care homes for the elderly that local authorities run?
(Sir Jeremy Beecham) The problem is that we do not run residential care for the elderly very largely.

203. In Lancashire, which is my own county, there are over 40 residential care homes for the elderly, to be reduced to about ten, and the county council is saying that it is the Government that sets it.
(Sir Jeremy Beecham) Precisely. For many years under the preceding administration there was a very distinct push to get local government out of the business of providing residential care and the financial scales were tilted very largely to ensure that that happened because authorities received less money for residents that we cared for directly than the people being paid for in the private sector. Now, of course, the private sector is in considerable difficulties. The local authorities' capacity has been much reduced and there is a very serious problem around residential care. I do not know the detail of the discussions that may have taken place about the particular target but it is certainly the aspiration of local government to support people in their own homes wherever possible to have intermediate care so that they are not in long term residential care unless that is absolutely necessary. I do not know to what extent we were involved in this figure but what we are saying is that if you are looking at care of the elderly this has to be a whole systems approach. It has to involve the health services, the local authority�not just local authority social services but also housing and other services, including things like transport and leisure and so on�if you are going to give people quality of life. Different councils deal with this either on an institutional basis or by looking particularly at acute problems which may arise, for example, in the case of hospital discharges, at that point. What you actually need to do, and this is an area which will emerge as the new bill is debated, is in the first place to prevent people going into any A&E units or into hospital in the first place. For that you need effective collaboration across services both within local government and with other partners. Only in that way could you hope to achieve a measurable reduction in people being either in hospital or in residential care when, given the choice, they would prefer to be at home with support.

204. I understand that. My final point is back to this whole thing about centralism and localism. In the papers you left with us you say that the LGA accepts that central government has the right to set standards and targets for local government in relation to national priorities. Does that mean that a minister can wake up in the morning and say, "There should be a national target for inspection of greasy spoon cafe�s"? Does it mean that the Government can capriciously decide that there should be a national target for any service produced by local government or does the LGA take the view that with the new localism there should be areas ring-fenced and it should be up to local people to decide without interference from central government?
(Sir Jeremy Beecham) Our approach has been to say that we can agree and should agree, and we now have agreed, significant areas of public policy in which central and local government commit themselves to a joint approach to achieve shared goals. These are the shared priorities. We would say that that needs to be followed through by genuine partnership in terms of agreeing what targets you wish to achieve in selected areas rather than across the whole piste, and up to a point how they are to be achieved, but you want to allow for innovation, you want to allow for risk�taking. We have a very risk-averse culture in government in this country and failure is deemed to be something which is impermissible but actually you cannot innovate without taking some risk. We must be able to pilot new ideas and see what works and what does not. In that sense it would be wrong for ministers to act in the way you describe, although technically speaking there is nothing to stop them doing it. If I may make one other point, there is a recognition now that actually there needs to be capacity building within local government and I think the same is recognised within the Health Service, so that the kind of management that Mr Thayne has obviously brought to his service in Staffordshire is something that spreads through local government, both at government level and at official level. The Government has agreed matches funding with the LGA in terms of, significantly, an �18 million programme to build the kind of capacity which hopefully will help us achieve attainable goals and disseminate good practice. It is very interesting to hear that Mr Thayne has come into the Ambulance Service from the Army and has brought his experience and his management skills to bear on an organisation. I have to say, going back again to where we started, that that would not have been possible within the Fire Service because in the Fire Service you start at the basic fireman grade and you cannot get any position beyond that unless you have started at the basic grade. I think that is an extreme example of an ossified structure but I think we need in local government and in central government, and perhaps in the public sector generally, to acknowledge that we need an infusion of skill and experience from outside, not in the form of hiving off the services or privatising the services, but attracting into the services people with a variety of skills and experience. That I think will help generally inform the debate about services and improve them and help everybody reach the priority targets that we ought to be concerned with.

Chairman

205. Could I pick up one point that Gordon raised, which is where these targets come from and who they are for? In your evidence, Roger, you say very strongly, "We consider it is important that the targets set are those which the public set". It is very interesting, is it not? That is a crucial proposition, that the targets in some sense should be set by the public. What we need to know is how on earth do the public set targets. How do you know that the targets you set or any organisation sets are the public's targets? And a supplementary question would be, if you left it to the public they would set targets which would probably discriminate against all kinds of groups that we do not want to discriminate against and give priorities to all kinds of things that we may not think should be prerogatives. What do you mean by it?
(Mr Thayne) When we were closing all the ambulance stations you can imagine that normally that would cause a public furore. What we did was to go along with the ambulance staff ourselves and talk at public meetings and say, "This is what we want to do to ensure that you get an ambulance more quickly". We had no problem at all in Staffordshire in closing all the ambulance stations because they were an anachronism and they were costing a lot of money and they did not improve patient care. You have to have that day to day regular contact. We do that a lot through the media, as you know. We get about ten media inserts a day in Staffordshire on local radio or whatever, because there are 1.2 million people to talk to. If we were not a public service but a business we would certainly have to take notice of what the customer wants and those are the people who have to set the targets and those targets will be completely different from what the Government says. Certainly in the Health Service, and if we take the ambulance service targets, it is to get there as quickly as possible, it is to take people to the appropriate hospital; pretty simple stuff. I think we can make life far too complicated for everybody and divorce management not only from the staff but also from the customers that they are serving and go into this government gobbledygook that nobody understands and then they certainly do not get the service.

206. I can quite see that with you what a manager might think the public needs and what the public thinks it needs are the same, that is, that the ambulance should get there quickly and that they save lives. I think that is fairly straightforward. But if we go a bit broader and say, should the priority of the Health Service be to give money to mental health or to cancer care, then it seems to me you are in difficult territory and it is not at all clear that you necessarily do whatever the public wants.
(Mr Stone) I think that is quite right. The public do not have the general knowledge to set those targets. It is about working in partnership, as Roger has been saying, and having that communication process and there needs to be a basic partnership the whole time. What we have seen is that the patients particularly are very hungry for information. They want to know who the best doctor is in a specific region; they want to know where the best hospital is, but with things like you have seen in The Times this week on things like the Dr Foster issue, we are not getting that information given to us from the Department of Health. We are having to rely on outside agencies coming up with a guide as to who is the best doctor within a specific area or within a generality. It is about partnership and it is about knowledge.

Michael Trend

207. A fundamental problem is if the statistics are not compiled in a straightforward and reliable way. Mr Thayne was asked, we were informed, earlier this year to do a report for the Ambulance Service Association which they later dismissed as only one man's view, in which a number of figures included one which said that 3.5 per cent of calls were reached within zero minutes, which did not give one confidence in the reliability of the figures. Perhaps Mr Thayne might say something about the report first and then I can ask Sir Jeremy what confidence can we have in targets if they are being manipulated?
(Mr Thayne) Those targets set are based on time and it is very difficult to lay down when the clock starts and when the clock finishes. If we get to hospital with a patient and the hospital is not ready to receive that patient for a couple of hours and there is a trolley waiting at the side they take them off the ambulance trolley and they may then be waiting there for six hours. That is one example. When you get to outcomes it is a bit more difficult. You can be pretty sure that wherever you are measuring an outcome you can dictate that reasonably well. Our principal target is our outcome target and what we have to make sure is that there is a relationship there between all the other targets that lead to that outcome. For instance, even though our response performance might be very high, if we are not getting those outcomes we will be very concerned and do something about that, but we need that transferred into the whole. The principal problem is that if you join the NHS and say, "Let me have a look at the patient handbook on how to run an ambulance service, a GP practice, a hospital" and so on, it is very difficult to manage because if you move from one end of the service to another you may have to learn to operate it in a different way. We were talking about bringing people in from outside. It is not necessarily that. If we had systems for better training, and certainly one for leadership, we could stop wasting a lot of money and do things slightly differently.

208. We understand your report concluded that improvements in the ambulance response time were as much to do with bending rules and inaccurate recording as with improved operating practices, what one paramedic called the magic pen. Sir Jeremy, in the light of that this must be surely common throughout the public services. What reliability can we place on targets when the figures appear to be cooked?
(Sir Jeremy Beecham) I do not think that the figures are deliberately cooked. I would be foolish to imagine that that can never happen. Our experience is that sometimes you get mistakes in returns, failure to return (from local authorities in particular), which will complicate matters, but there is a service which is there to validate much of the calculation, and at national level there is the National Statistical Office which should and does keep an eye on things, although even that organisation is capable of making mistakes, as we found out in last year's pay round when they produced earnings figures which seemed to be incorrect and did not give sufficient weight to the modest earnings of bankers in London which rather distorted the national pay figures. On the whole as an organisation they do, as far as national statistics go, make sure they are kept fairly tightly on the straight and narrow. Certainly in my own authority I remember occasions when we simply sent in the wrong information through a clerical error or whatever. Taken across government as a whole I think the figures are pretty robust. What is more interesting in a way is the question the Chairman asked before, how targets are derived in the first place and what is the statistical or other basis for those. More attention at that end would be worth having.

209. I am still worried about the liability. In Mr Thayne's evidence he has explained to us how you can define in different ways the beginning of a request to have an ambulance. This must be widespread throughout the public service, that people who, for a variety of perverse incentives, wish to present one set of figures rather than another can do so by recording them in different ways.
(Sir Jeremy Beecham) It is a question of not comparing like with like; that is certainly true, and it may be that that needs to be dealt with more effectively.

210. I am not certain you have read the Ambulance Service report of Mr Thayne's.
(Sir Jeremy Beecham) No, I have not seen it. It sounds very interesting.

211. Why has Roger Thayne made such a success of this? Why are there not more Thaynes in the public service?
(Sir Jeremy Beecham) I would hesitate to say that there are more Thaynes in the public service because he has an extremely impressive record, but there are very good managers and there are many examples of extremely capable managers in the public service, local authorities, health authorities and elsewhere. I have to say that one of the problems is that they are constantly under public scrutiny and pressure in government and from other sources which makes life very taxing. We had a good chief executive who opted to leave us to go into the private sector, partly for financial reward but partly because it is a less pressured existence and you are not under the microscope to the same extent as you are in the public service and it takes a particular kind of personality to thrive within that context. But there are very able people.

212. I have no doubt of that, but this seems to me to be an outstanding success story.
(Sir Jeremy Beecham) That is right. It is perhaps a little difficult to take a uniformed service like that, or the Fire Service or the Police Service, and compare it with the generality because there is a different tradition, there is a difference of culture within those services, and it may be that if you have experience of another uniformed service with a very good track record, which Mr Thayne clearly has had, it is possibly rather easier for him with his perspective of that than it would be for somebody else.

213. Maybe I should ask Roger Thayne what does he think is the secret of his success, and I am sure he would not overplay it but maybe it is something to do with the fact that in the Army facts have to be right or big trouble occurs.
(Mr Thayne) I certainly found that the Army had far more capability for innovation, far better training and you learned from an early age to lead as well as manage. In the Ambulance Service we do not have any separate disciplinary code. It is very much a normal public service like the rest of the NHS and we are very much part of the NHS. It is difficult at the moment because it is a dispersed workforce. The basic problem that I see is that every single ambulance service has to design its own personnel procedures, its own operational procedures. That has to be absolutely crazy. No wonder we spend so much time on management and then we get visited and told that our procedures are not very good but nobody can tell us what the good ones are. You train consultants, you train nurses but you do not train managers how to run that hospital or that ambulance service. The idea that what we do should be in every ambulance service is totally against the culture that says you do not train people to run anything. That is the fundamental problem. If you do not train people to run systems to allow the people that look after the patients to do that properly, then it will be very poor, very ineffective and you will blame the people who are doing superb work in poor systems.

Chairman

214. Could I just ask Sir Jeremy, do you need to go now or can you give us five minutes?
(Sir Jeremy Beecham) I really need to go now. I have to see the Minister about some targets.

  215. Perhaps Mr Matthew Warburton, who has, to use Gordon's words, the Delphic title of Head of Futures from the LGA, can stay to assist us. Before you go, Sir Jeremy, is there a case for now having an integrated Fire and Ambulance Service?
  (Mr Thayne) No.
  (Sir Jeremy Beecham) I agree with that, but there is a case for closer collaboration between all the emergency services.

Brian White

216. Can I follow up where you were coming from there because it seems to me that there have always been leaders in public sector organisations. There is a whole range of public sector organisations who coast and there are a few laggards. The leaders will always meet the targets. Are not targets a catalyst, not for people like yourselves who meet targets, but for the coasters who are doing all right and the laggards who are falling behind? Could you have the same targets right through?
(Mr Thayne) If there were no national targets you would not get the same concentration on performance, so I think they are necessary. It is certainly necessary for my organisation to see how we are performing. For instance, everybody has a response performance, and indeed our individual appraisals are down to people's performance. You can call them performance indicators or targets; it does not matter what you call them but you have to measure your performance, particularly in public service where you are given public money to provide that service.

217. Somewhere in my dim and distant past memory I recall that one of my colleagues tried to design the computer systems in the Ambulance Service and I think it was in Staffordshire. There were massive arguments about whether that particular system was the right system compared to the ones in London and in other ambulance services. If you had the kind of centralised system you were talking about you would not have got the kind of performance measures that you have got and you would be stuck trying to measure things with inadequate infrastructure. How do you get round that problem?
(Mr Thayne) There are a number of points there. There is certainly not a single ambulance service in the NHS with inadequate resources. I have never found that they like using those resources in the best way.

218. So all computer systems are capable of giving the kind of information that you need?
(Mr Thayne) There is no computer system in the world that is giving all the information. You have to widen that information and you have to know what the key information is. That is part of developing systems. We benchmark with 22 other services around the world, most of them in North America, who operate in a similar way. Most of them are private. In fact, we are the only publicly provided system. The view generally is that the efficient systems like ourselves will be killed by the public service; they will screen them out. They will starve them of funds until they collapse on their own. We are determined to prove that is not the case. The computer system is just one part of the jigsaw. Yesterday for an hour we did not use the computer system because we were reverted to paper just to check things out. We achieved the eight per cent without the computer system, but the computer system has made it easier.

219. I was going to move on to how you monitor targets, and the classic example at the moment is health and the controversy going on there, but when you move away from specific targets and a whole range of targets to trying to give an indication of whether an authority is performing well or not, when you move to those generalised indicators, do you then get into the kinds of problems that cause people to say that there is no evidence here and people have spoken to the wrong people? How do you monitor the targets in a way that is meaningful?
(Mr Warburton) I would like to come back to the issue that was being discussed a little while ago where I think there was a very useful distinction made between the outcomes which were sought and the management information that managers need in order to know whether they are on track. Those two things we need to treat as being in a dynamic relationship, that it is the outcomes that matter. We have got a good idea of what the indicators are that tell us whether we are on the way, but we have always got to be prepared to learn.

220. So this star system that we have got in local government services or in the NHS is a waste of time, is it?
(Mr Warburton) It is a very crude guide to the overall performance of what are large and complex organisations. I think one message that we will be wanting to give out very strongly when the comprehensive performance assessment results are announced in December is that we will be very pleased to see a significant number of councils being judged excellent but nobody should be under any illusion that those councils have got nowhere to go in terms of further improvement. There will still be cracked pavements in those councils.
(Mr Stone) That is certainly the same with hospitals. It is all very well having the three star, the two star and the one star hospitals and, going back to what we were saying earlier about where that money is allocated, in terms of the fact that there are financial penalties for the hospitals that are not achieving that opens up the whole question of whether that should be the case. You have to have some guide and the Department in their wisdom have dictated that it is a star guide in terms of one, two and three stars. It is an inadequate system but it is certainly somewhere where we have got to start to take the best practice and disseminate that best practice across all hospitals.

Annette Brooke

221. I wondered if I could particularly address some questions to Mr Thayne. Could you comment a bit, Mr Thayne, on how you manage your staff in this dynamic management method that you are obviously using? Are they rewarded for meeting targets? What other measures do you use to carry your staff with you?
(Mr Thayne) Certainly what we have done as an ambulance service is manage to cope with about a 60 or 70 per cent increase in activity and reduce staff in terms of numbers. That has allowed us to provide more training, better equipment for the staff and uniforms and certainly they are paid approximately seven per cent above the Whitley national standard. That is a collective. What we do not have is a sort of bonus system. You do not get a bonus for every life you save. It is very difficult to do that and I do not think people are doing it for that reason, but I do feel that as systems become more efficient the staff should benefit. We also do not believe that senior managers on executive pay should be out of kilter with the staff pay. Whatever pay rise the staff get, that is what we get. Therefore, if you are looking at our executive pay it is way out of kilter to the rest of the Ambulance Service.

222. Have there been difficulties with pace of change in working practices? Have staff reacted adversely to the pace of change?
(Mr Thayne) What you would find if you visited us is that you would not find a single member of staff that would say that our system is bad for patients. You would find lots of people that would say that we have to work harder. It is very demanding, but nobody would tell you it is bad for patients.

223. Does the funding of the Ambulance Service, which obviously comes indirectly from the regional health authority to the PCTs, still have a very strong historical base and then just add-ons in terms of extra requirements? Do you negotiate your whole performance plan each year?
(Mr Thayne) We do not have too much trouble with that. We broker our own service level agreement for the purchasers which sets standards fairly high. We have to negotiate that on a contract basis every year. We are still involved with competitive tendering and market testing. I have to say that certainly what we have noticed of late is a massive increase of funding, a lot of it from central sources, so certainly in the last 12 months we have had better funding than we have ever seen. There is no shortage of funding. What there is difficulty in doing is gearing up and training people to meet the extra demands of that funding. We certainly have seen a major improvement and that direction, which has come down from the centre in terms of meeting the ambulance funding, has rubbed off on our local purchasers. There are no problems there at all.

224. Is that central funding directly related to current targets?
(Mr Thayne) Yes.

Chairman

225. I have a couple of final questions. Roger, you do not pull your punches and we like that. You say that as many as 6,000 lives could be saved in England alone if the performance of Staffordshire was extrapolated throughout the country. That is a shocking statement, and then you say that this needs investigation as to why the Department of Health does not think it worthwhile doing this. Just tell us quickly why it does not.
(Mr Thayne) The actual figures are put in there from the Which report by Dr van Dellen who is our part-time medical adviser. I would say 13,000 more people would have arrived at hospital alive of which at least a third should walk out. It is getting close to that sort of figure that you mention there in the UK as a whole. It is quite frightening but it is correct; this can be done. We have no better paramedics in Staffordshire than they have in London or Scotland or Cornwall or anywhere else. They are all capable of doing it. They have got the funding, they have got the equipment. It is just the procedures. This could be done. It does need investigation. It is pretty dramatic stuff.

226. But why would the Department of Health, if it wants a better Health Service, not want to put in place actions that would give outcomes like that?
(Mr Thayne) With respect, you are in the Government; I am not. I do not understand why.

227. Let me ask one final question. This takes us back to where we started. Targets are only a means to an end. The end is to get better public services. We have heard an example from you of how one particular service was turned round. Many public services are not turned round. Many public services are in need of reform. Why can they not do it themselves routinely without some big bang external intervention of the kind that targets represent? How can we have dozy local authorities not performing well for their public year in, year out? Why are there no pressures in the system to turn them round? Why do not the democratic pressures work? Why do not the citizenry say, "This is not acceptable"? Why does not the professional culture kick in and make it better? Why do not all kinds of things happen? If they do not happen why does it take the importation of someone from the Army to come and shape things up to produce radical improvements? What is going wrong with public sector organisations that seemingly requires this kind of central intervention to shake the whole thing up?
(Mr Warburton) It is something we are very clear on in relation to local government, that improvement can only come from within.

228. But it has not done.
(Mr Warburton) That is as may be and we can spend a long time elaborating on the causes of that. It is very clear that there are no easy answers. When we get the results of the first comprehensive performance assessment of local government I think it will be very clear that there are poor and excellent councils which are safe Labour controlled, which are safe Conservative controlled, possibly safe Liberal Democrat controlled, which are hung or balanced, which have a history of instability, all of these things which might in the past have been used as reasons to explain why performance might be better or worse but do not seem to be very useful in explaining why some places are committed to improvement, well managed and forging ahead whereas others are not. It is absolutely right to make the point that there is no room for complacency in this situation. What we have to say is that all our experience suggests that the Government's concern and attempt to deal with the problem from the top cannot substitute for generating local leadership and commitment to deal with the problem from below and that is as much a matter, I would argue, for the political parties and the professions as it is for, if you like, councils as organisations and for government as an organisation.

Sir Sydney Chapman

229. I have a point of clarification and I think you will agree it is an important point of clarification. Mr Thayne said that when there was a pay increase for ambulancemen in Staffordshire the management got the same increase. You are presumably referring to percentage terms rather than actual money terms?
(Mr Thayne) Percentage.

Kelvin Hopkins

230. It seems that Roger started at the grass roots, found out what was wrong and organised it better. I remember some years ago there was some research done on direct labour organisations in the local authorities building sector. They found that one local authority had a DLO which was four times more efficient than another. Why cannot local authorities learn from that experience and say, "Let us find the best method and apply it to everybody"?
(Mr Warburton) It is the same thing. Some clearly can and some cannot. We have some part of the answer. We know that there are some skills which are very short in local government. We know that there are areas where capacity needs to be developed. We are actively discussing with the Government how we bring programme support to local services and capacity, but it would be completely wrong to suggest that anybody actually knows what the full answer to this problem is. We are dealing with what I would argue is a very complex issue and making progress but progress which is slower than we, and clearly you, would expect.

Chairman: Thank you for that. The only clear lesson to emerge is that all sensible people are going to locate in Staffordshire to have a secure future. We are very grateful to all our witnesses. We have had a very good session. Thank you, Mr Warburton, for substituting for Sir Jeremy unwarned, and thank you, Mr Thayne, for coming down from Staffordshire.

[top]

MR JOHN BANGS, MRS JAN BERRY AND MR CLINT ELLIOTT

THURSDAY 28 NOVEMBER 2002

Chairman

231. Can I welcome our witnesses this morning. It is kind of you to come along. I have just heard that Doug McAvoy is not able to be here.

(Mr Bangs) Yes. He sends his apologies. He lives in York and there is a problem with the trains and he was not able to get down in time. I was going to accompany him to give evidence, and my job is to look at the impact of targets, so I have properly researched the subject.

232. We got a good deal then. Thank you very much indeed. Welcome, Mrs Berry. Should I call you Chief Inspector?
(Mrs Berry) No, Chairman of the Police Federation is fine. Can I introduce Clint Elliott, who is the General Secretary of the Police Federation.

  233. You know what we are about. We are pursuing targets, league tables, and all that, as part of the reform of public services. Do any of you want to say a word by way of introduction?
  (Mr Bangs) First of all, I am John Bangs. I am Assistant Secretary, Education and Equal Opportunities at the National Union of Teachers, and my job is to be responsible, as the senior official, for education policy within the building. One of the areas is National Curriculum test targets, for example, and the other is targets set by government, including targets for exclusion and truancy, for example. We have submitted some evidence to you on that. What I want to focus on is: where does government get its targets from? Are they appropriate? Is it appropriate just to concentrate on outcome targets or should we be measuring qualitatively the success and the efficiency of government investment and are there better ways? Finally, I noted Michael Bishard's comments to you when he was talking to you earlier on as part of your investigation, when he said that inappropriate targets affect behaviours, and if they are inappropriate can also lower morale rather than raise morale. As a basis, I think that is a good start.
  (Mrs Berry) We are obviously facing police reform, which is part of the modernisation of public services, and clearly improving professionalism and standards is part of that. Police officers accept that performance indicators and targets have to be set, but I think we also think that they need to be what the words say, targets and indicators, and that there are a number of other factors that come into play with regard to whether you actually need them. Last week we had the first National Policing Plan published by the Home Secretary. This was going to rationalise the in excess of 130 different performance measurements and indicators, and although it looks as if there are about ten within the Plan, I suspect when that has trickled down into local policing areas and the local police station, there will be a lot more than ten indicators that police officers will be judged on. I think police officers accept that they are accountable, they accept that there need to be statistics and recording, but what they expect to see in return is that some qualitative assessments are made, which I think is very much what John has just said, as opposed to the tendency to work with the easy to count things, which do not necessarily take into account the demands of the public in respect of policing and the visibility of professional police officers.

234. Let us start with the NUT. The NUT tends to be against things, does it not? I have your paper here. You are against narrow measures of achievement and unreliable data. Does that mean that you are in favour of wide measures of achievement and reliable data?
(Mr Bangs) We are in favour of evidence-based objective-setting, and we are in favour of evidence informing policy. I would like to very briefly concentrate on the National Curriculum test targets that we have at the moment. You will have noticed in the media and the press yesterday that there was a response to the OFSTED finding that, because the Government had not achieved its targets in literacy and numeracy, somehow the literacy and numeracy strategies had failed. In my view, they are and they have been a major success, but somehow the failure to reach what I believe to be arbitrarily set targets has turned an enormous success into failure. Let me give you a very specific example of success. I used to teach in Tower Hamlets for 18 years, so I am umbilically linked to the authority; I know what goes on and still keep in touch. For English at Key Stage 2, the national percentage for getting young children at level one�that is when they are seven�to level four, at the end of Key Stage 2, when they are 11�level one is below the average at Key Stage 1�is 32 per cent. In Tower Hamlets, with a Bangladeshi population of round about 65-70 per cent, and also a big turnover, demographically shifting all the time, they managed to take the number of pupils progressing from level one to level four to 53 per cent. This is over 20 per cent higher than the national average. This is an enormous success, yet because Tower Hamlets failed to meet its nationally set target, it is considered to be a stuck authority. The point I am making is there are better measures than that for evaluating what is an enormous success for young people and for teachers.

235. That is a very nice example, and we are very grateful to you for it, but it does enable me to ask the question again. If some existing measurements and targets suffer from some of the defects that you describe, is your campaign for better targets?
(Mr Bangs) First of all, I think it is absolutely legitimate for government to measure the efficiency and the effectiveness of investment. No government, when it invests in the public services, would not want to measure the impact. Let us look at OFSTED for example. We can argue about the specifics of that, but actually in general, we have an evaluation agency which is now 10 years old and is becoming more accepted amongst teachers as part of the system, as part of the daily, weekly and yearly lives of teachers. If we had a percentage which said the number of schools coming out of special measures or the number of schools coming out of serious weaknesses, that as a measure of the whole school effectiveness is an effective measure of investment in schools. There is also a trend which I think is not noticed and which I find less objectionable towards what are called floor targets. If you were to say no authority, based on the evidence of the value-added that they give to young people, was to fall below X target, that is a better way than setting arbitrarily high targets, outcome targets, such as the ones we have for National Curriculum tests at the moment.

236. But we are now on the eve of getting our first value-added league tables. Is this not something you have been asking for for many years? Is it not a great advance? Does it not precisely measure the ability of a school to move in the right direction, although it is being measured arbitrarily against other schools in different conditions?
(Mr Bangs) I have a problem with school performance tables because you can get a very good OFSTED report and you can be at the bottom of the league table and be considered the worst school in London or the worst school in a particular area. I have a problem with that. You are saying value-added. Value-added should strip out that effect, because you are starting from a point of what the young person achieves or that cohort of young people achieve when they come into the system, and the measurement of their achievement as they come out at the end of that particular phase of schooling. That is all very well, but it does not take into account the current system of value-added, social deprivation, nor does it take into account very high levels of movement of pupil populations. There are a very large number of schools where young people come in and out of schooling within that particular phase. I am much more comfortable with OFSTED being able to identify through public reports a school that is doing well and a school that is doing badly, and if it is a question of choosing measures�and we have an overlap of measures at the moment. We have performance tables overlapping OFSTED reports. If you want a whole picture, and parents do want a whole picture of their schools, go to the OFSTED report, not the school performance table.

237. So if we had a cluster of measures, rather like the way that it is being done in local government at the moment with the Comprehensive Performance Assessment, which can produce these bandings of councils, you would be very happy with that, would you?
(Mr Bangs) I think there is a strong argument for local education authorities to be as open and as accountable for their performance as schools are through inspection. We have never opposed this. In fact, we advocated it first actually in January 1996 in a pamphlet we produced saying that local education authorities ought to be evaluated for their performance, and there is a useful debate about the kind of general targets that ought to be set for local authorities.

238. Assuming we do all the things that you say we ought to do in relation to this, is there a target regime and a league table regime that the NUT might support, or would it, as I said at the beginning, still be against everything?
(Mr Bangs) First of all, we are not against everything.

239. I am trying to find out what you are in favour of.
(Mr Bangs) We are in favour, as I said, of an inspection agency that would describe the quality of education in local education authorities, education authority by local education authority; an inspection agency that describes the individual performance of schools; and we are in favour of exploring, as opposed to the current headline outcome targets that we have at the moment, floor targets below which a local education authority should not sink.

240. Some of that could convert into some kind of banding or classification or league table or whatever if we get the right measurements.
(Mr Bangs) I have to say that I have a real problem with crude bandings and classifications.

241. It is not crude. We have just been through that. They are now sophisticated bandings.
(Mr Bangs) Perhaps, Chairman, you could describe the bandings that you consider sophisticated.

242. You just described to us what it had to be, and I said would it be like the CPA in local government, and you said yes, which is going to produce these different categories, so I am asking you now, if we got to that point with all the things you want us to do, would those kinds of classifications be all right?
(Mr Bangs) I am absolutely in favour of describing levels of local authorities which actually respond to the evidence which they can produce and the baseline from which they should be proceeding. If you start with an evaluation system which evaluates the performance right the way across the piece, and then demonstrate the value-added that they can give to schools and pupils, I am in favour of that, yes.

243. One similar kind of question for the police. You were talking about the National Policing Plan just now, and you were doubtful that in fact it did look like a reduction in the target regime, even though it looked as though it might be. Is your essential case, as we have heard from some other witnesses, that you would like many fewer targets, with more discretion left to local public bodies and police forces to work out first of all their own additional targets, but also how they are going to deliver the targets that do come down from the centre?
(Mrs Berry) I think you are right. I think it is quite right for the Government to set general standards, to set general targets, but I think it is important, particularly for our style of policing in the UK, for the actual determination of what the target for particular local areas should be, to be set locally and not nationally. That said, we have limited resources�even though we have more police officers we have limited resources�we have increasing demand, so you have to prioritise, you have to decide what, in a particular policing area, are going to be your priorities, and I think that is quite rightly the role of government, but the way in which that then works through in a practical sense at a police station level or at a police force level is that you need to look at the actual needs of that area. They may not have, as we have seen recently, a street crime problem. I do not know of too many areas that do not have a drugs problem, but they may not have problems which are evident in other areas, so it is important that the locality has a huge say in what their priorities will be.

Mr Hopkins

244. I should say first of all that my wife was a teacher before she retired, and she was Divisional President of the NUT in our county, so I have had these conversations at the breakfast table over many years. Sometimes the conversations were very tense, but, I do have strong views on these matters, but it is your views that we are interested in, not mine. You have given us figures for Tower Hamlets which are very impressive. Does that not demonstrate that the regime, even with its frustrations for teachers, actually works?
(Mr Bangs) It demonstrates the importance of data, but the way in which data is used at the moment I think undermines the usefulness of that in terms of describing the success of schools and the success of local education authorities. I have a very deep concern about the future. The Government is described as having failed to meet its English and Mathematics targets. I have said that actually, that particular failure is masking enormous success, and I have given the example of what I think is enormous success, and that is replicated across other authorities as well. But I have an even deeper concern with the targets for 2004. Schools in England are expected to have a 10 per cent rise in English between now, 2002, and 2004, at Key Stage 2. They are expected to have a 12 per cent rise in Mathematics between now and 2004. At Level 5 at Key Stage 2, they are expected to have a 6 per cent rise and a 5 per cent rise. It may or may not be achievable for that higher level, but I have to say that the stress and the distortions that are going to be imposed on the curriculum to try and achieve that over two years�a 10 per cent rise�are going to be enormous. I have not talked about effects on schooling, but we conducted some research with Cambridge University recently, with Maurice Galton and John Macbeath, and what they found was that the impact on the National Curriculum at year six has led to the Humanities being squeezed, to Art not being taught at all, and to an enormous amount of practising going on for tests, and that is because local authorities, feeling the heat on the back of their necks to try and achieve targets, have pressed schools to achieve the targets set for individual schools, and everything has gone by the board to do that. If you are a young person in year six, it can be one of the best years of your life. You are in a sense emerging from all your schooling at primary school, you should be able to tackle all these wonderful things, and suddenly you are into practice testing and you have parents worrying themselves sick about it as well. The Curriculum is being massively squeezed in year six. That is not me saying that; that is Cambridge University. That is the effect of narrow target-setting.

245. I will be devil's advocate to an extent. Is not reaching adulthood with poor literacy or no literacy possibly the most disabling thing that one can experience in life, and is the government not right to focus on literacy above all? The association between poor literacy, unemployment, crime and so on is so important and so fundamental that the Government in a sense has a point.
(Mr Bangs) I absolutely agree with you. Incidentally, you are right, Chairman, to pick out that in the press we are described as being negative. We are not negative. We are absolutely in favour of the literacy and numeracy strategies. I have always argued for them. They were an entitlement for teachers. Professional development was never in place to introduce the National Curriculum in English and in Mathematics. It is there. I had criticism about its delivery at the beginning, but now we have a set of expert teachers and consultants at every local education authority level, therefore it is absolutely vital that those strategies are embedded, that teachers own them. There are rumours going around amongst consultants and local education authorities that unless schools and local education authorities achieve the targets set in 2004, the Government is considering withdrawing the money from literacy and numeracy strategies. I could not think of a dafter action, because I absolutely agree with you: literacy and numeracy is the core of everything else.

246. If I were sitting there and you were sitting here, I might have made some of the same sort of comments. There are other factors in numeracy and literacy failures in schools than teachers and how hard they work. Would you like to comment on those factors, not to give excuses for failure, but there are other factors which I know of in my constituency, which is like Tower Hamlets in many ways.
(Mr Bangs) I do not think the Government is ever going to get its literacy and numeracy strategies perfectly right, because you always develop. I noticed that the Chief Inspector, for instance, criticised teaching phonics, for example in his report, and he is right to pick up weaknesses. The way in which you actually tackle weaknesses is that you engage teachers in discussion, listen to their ideas about improvement in teaching of literacy and numeracy and build on it in that way. I also think that we all underestimate the impact of demographic change as it affects schools at the micro level. We really do underestimate that. People criticise inspectors and criticise teachers for making excuses about achievement. We have hundreds of examples of literally one year coming in at the beginning of key stage 2, for instance, say, at year three, and half the class disappearing by year six. Demographic change is important. We should also listen to school communities when they talk about the changing demography of the population around the school as well. It can change massively over the time that a child is in there, and that has an impact. I do not want to use social deprivation as an excuse, but it does have an identifiable impact.

Mr Trend

247. May I first say that I remain unhappy about the non-appearance of Mr McAvoy. An invitation from a Select Committee is a very serious matter. Many people come from all over the country, and come the night before if there is any question that they might not arrive on time. I have every confidence that he will want to communicate with the Committee in some detail as to why this has happened, because in my experience of the Select Committee it has never happened before. Meanwhile, we are grateful to Mr Bangs, who is here to help us today. I really want to turn to the Police Federation, if I may, and ask one or two questions about the targets as they affect policing. If you imagine parliamentary members from the Thames Valley going to meet senior officers once or twice a year, that is very helpful and we get to see the full scope of police work, but there is a tendency on the part of those working at the managerial level of the police to wish to explain in great detail about all the managerial targets they have set and how they are doing and all the rest of it, and a great reluctance on the part of MPs to listen to this because they want to talk about public perceptions and how it is on their patch. Particularly with these managerial targets, I think there is a danger that the police, in a very managerial phase of their history, have become slightly obsessed with these new PR tools, and in fact, they do not work very well with the public and with us. Do you have anything to say about that?
(Mrs Berry) I think you are highlighting the difference between quantitative assessments and what people's experience of policing actually is. I think in comparison with teaching, although we have had crime statistics for as long as I can remember, we are still in policing in the early days as far as performance measurement is concerned, and there is an argument from the public that it does not really match their experience of policing. The concern I have is that a member of the public can telephone a police station, we will judge ourselves on how quickly we pick that telephone up, we will judge ourselves on how quickly we then respond to the call. There will be no judgement whatsoever on how well we speak to the person, what type of information we get from them when we speak to them in the first instance, whether that person could have been diverted to another agency if that was more appropriate to deal with the incident than ourselves. There is no qualitative assessment on that whatsoever. So I think the experience of a member of the public can be that they are seeking one thing from us, but we are seeking to respond to performance measurements rather than to respond to what they are asking from us.

  248. Again, I can only speak from experience of my own constituency, which is a very large one, that there has been a certain amount of reorganisation, and I am sure a lot of this rationalisation is perfectly sensible. So there are now banks of people to talk to on the telephone, who are filling in email and computer networks, and this is all a big step forward, but in a sense, they are producing statistics to show how quickly they answer the phone, when in fact, if you ring up to say your car has been stolen, this is purely an insurance function as far as the police is concerned now, and the public are not getting perhaps the comfort or support they feel they need, although the figures will probably show vast improvements in time.
  (Mrs Berry) When we started having opinion surveys as to what the public wanted from their police, we started with a very open-ended question. Then we realised that we probably would not be able to meet their demands, and so the questions were honed down into "Here are 10 items. Put them in your order of priority." So we gave them a choice and said, "Of these, what would you like us to do?" never really asking them in the first place what they expected the police to do. I believe from meetings I have had with the public that what they want is a professional police service which is extremely visible, that they can communicate with much more easily than they can at the moment. You make an extremely good point. When you phone a police station now, you are more likely to get an answerphone, or you have to go through a series of different call centres before you can even speak to a human being. I think policing has always benefited from this human interface, which is something that professional police officers are doing less and less of.
  (Mr Elliott) I wonder if I could just add something. If we look at key areas, performance indicators actually drive the style of policing in a way that possibly the public do not want. We have become very good at answering the telephone, because we were told that was a target we had to meet. We are extremely good at getting people to key calls, but what we should be doing is looking behind those statistics. What we have behind those statistics is a volume of work that does not get done in the way the public want. So we have people answering the phone, which is targeted, and we have people dispatching people, and in between we have somebody that filters those things now, because we get so many calls we cannot handle the calls. Nobody looks at those particular issues. What it has done is we have resourced control rooms and resourced some degree of immediate response, to the detriment of community policing in many areas. I think you have picked an aspect that actually drives the style of policing, because we want to meet the targets. What we have not done is looked behind the targets. Targets really should be a management tool rather than an aim in themselves, and that is what it has become nowadays. In a way, we have started to measure things that can be measured rather than measure satisfaction. Jan is absolutely right. We are doing quantitative rather than qualitative measurement. If you had more qualitative measurement, that would be a plus. Funnily enough, telephone answering is a key area that demonstrates that.

249. I am delighted you draw a distinction between targets as a management tool and an aim in themselves, but they also sometimes, if I can move on a little, have real political significance. There is an argument between the political parties over certain key targets set by government, and this was obvious with the Prime Minister's pledge to get street crime under control by a specific date. Why he gave a specific date is his business, but nevertheless, this probably impacts on the public more. We have had targets like this for health and education, and there has been a lot of political jiggery-pokery going on at high level, which you surely must have a view on at least.
(Mrs Berry) I think it is quite right to focus on particular problems, but you also have to appreciate that we are not just in the business of dealing with burglaries and crime in general, or anti-social behaviour. One of the most important roles of the police is to respond to emergencies, and yet if you look at the National Policing Plan there is not one mention of us responding to an emergency. If you take the example of something which occurred during the summer of this year, the awful murders of those two girls in Soham, from a resource point of view, not only were resources in Cambridgeshire used up, but they were using officers�quite rightly, and this is how policing should operate�from other forces to support and complement the work they were undertaking. But if Cambridgeshire had been part of the Street Crime Initiative, they would not have been able to achieve any targets whatsoever, because their resources were dealing with one incident, which in reality would be one crime statistic. I am not saying they should not do that; they should be doing that, but it just shows how one figure can take up an awful lot of resources. If you go straight on to the quantitative figures, you could arrest and bring to justice 100 people for stealing a Mars bar, and the statistics would look very impressive, but the quality of those statistics and whether you needed to arrest them and whether they needed to be dealt with in that way would be extremely questionable from a public perspective as well.

250. I think that is the big question. The Chairman originally asked how targets work, and there are always perverse effects of targets. Is the increased obsession with targets nationally, and force by force, improving policing generally, or is it causing too much paperwork?
(Mrs Berry) It is probably a cop-out to say I think it is too early to say, because I do not think we are as sophisticated in target-setting and analysis of statistical data as maybe teaching is and other organisations are. I think it is very early days for the police. We said for years that you cannot judge policing by statistics, and we pulled away from it. Now we are being dragged into it, and we have a fair amount of catching up to do. It is terribly important to balance quantity with quality, otherwise you will have this imbalance where the statistics really do not mean anything at all.

Chairman

251. When the Committee visited the North-East last year, we met various people, including senior police officers, and I remember one of them saying to the Committee that he now had more PIs than PCs.
(Mrs Berry) That is probably true!

Annette Brooke

252. If I could start with one or two education questions, obviously the NUT position is that they do not want statistics published in tables, but an acceptance that the data is necessary. I suppose it then becomes a question of how you handle that data and how you interpret it. I really wanted to ask a question about time lags in relation to this, because yesterday David Bell said that he needed a critical review of literacy and numeracy, or reading and writing strategy, because the English tests were static in their results for three years, but there are lots of initiatives going on. There is a lot of investment for example in pre-school which will not have even had time to work through. So how, when we are having some evaluation of this, are we actually taking on board that things are happening at different levels, there will be time lags, and when is the point to kick in to say that is not working and go on to something else? How does the NUT react to that?
(Mr Bangs) That is a good question. I am a great fan of David Bell. He used to be the Chief Education Officer for Newcastle, and when we published our report on school self-evaluation by Strathclyde University, he was the first Chief Education Officer to gather all teachers together in Newcastle and say, "How can we find out about ourselves and what we are doing well and what we are doing badly?" It was about assessment of what you do in a school, giving it back to teachers and making them responsible for it. So I am a great fan, but I do disagree with the link that the Chief Inspector has made between the need to review the strategies for educational purposes�and I think there is an argument always to review whether or not your strategies are at their most effective�and hitching it to the "failure" to meet the government targets. I just want to say something about the original setting of the 75 per cent and 80 per cent targets for Mathematics and English. At the time in 1997 I asked the Department where they got the information from to set those targets. I have never been able to find any basis of evidence for the Government fixing on those targets and not, for instance, 80 per cent and 90 per cent, or indeed 35 per cent and 40 per cent. I have never been able to detect a rationale behind the setting of those particular targets, an educational rationale, whereas I have always seen an educational rationale for literacy and numeracy strategies. So the link that the Chief Inspector made I would question. I think it is right, however, to always, as a chief inspector, look at whether or not the government is getting the biggest "bang for the buck" to coin a phrase, bearing in mind my own name, from their own literacy and numeracy strategies. But I do think there is a need for a separation of the two, and I do question the Chief Inspector not actually criticising the basis for target-setting.

253. Perhaps I can pursue that a bit more. What I am really trying to tease out here is that we seem to have taken an awful long time to get round to getting value-added. In a sense, though it will be comparable, the value-added goal is going to change because the baseline assessment of children going into school will be at a much higher level. So I am not too sure how the value-added is going to take us in the whole realm of things. It will help. It might help comparing individual schools. What I am really trying to say is everything is changing all the time, and yet the target is something which is fixed, and I think there is a role for the teaching profession to be very positive about this, and say "This is what it should be," actually taking on board some of the things that are happening out there.
(Mr Bangs) I agree with the legislation, which requires school governing bodies in consultation with staff to set targets for individual schools. That is based on the schools' own evaluation of what they think they can achieve, and it should be tested externally. It should be an accountable system whereby an inspectorate or evaluators, whether it is a local education authority or whether it is a national inspectorate, test whether you set the targets right and what basis you actually set those targets on. I am absolutely in favour of that. What I am not in favour of is hitching value-added to a very crude performance table based on a set of results where success and achievement is relative to the other positions of schools on the particular league table scale. You might have done extraordinarily well and, as I said before, be near or at the bottom of the league table. You might have had a very, very difficult cohort of pupils coming through, and you could have shown some value-added. But some of your achievement�and I used to teach in a school for children with emotional and behavioural difficulties for years�may well be just keeping those young people in school, and the fact that they are at a plateau is a basis for further work, but just keeping them in school and working overtime to secure greater achievement. My problem with targets is that it is linked to school performance tables, hitched to the notion of instant success over a fixed period of time. Schools can be enormously successful but you cannot get predetermined, nationally imposed instant results. That is my problem with that particular approach. What I am in favour of�and I think we are at one with the Police Federation�is qualitative assessment, which involves whole institution inspection, which involves participation and questioning teachers about why they have come to their views about what they think is successful or not, coupled with the idea that local education authorities should have floor targets below which they should not fall. That seems to me reasonable.

  254. Could I ask Jan a brief question? I was on the Committee of the Police Reform Bill. We spent a lot of time talking about standardisation of the tripartite system. What benefit will there be for the public from the National Policing Plan?
  (Mrs Berry) I think the public will see where the Government believe our priorities should be set, and if there are differences of opinion at a local level, then local police chiefs will be able to justify why they are doing one thing as opposed to another. I think it is quite right that the government should set general direction and general strategy, but the benefit of policing in the UK has always been local delivery, and I think that is something that we should dispense with at our peril, to a certain extent. One of the things which John has alluded to is that we have a tendency at this moment in time�and the National Policing Plan does this to an extent�to compartmentalise policing. You can look at it in a very insular and limited way. You can say, "What is happening in burglary? What is happening in street crime? What is happening in drugs?" and ask what is happening in all the different areas, whereas in reality there are ties between all of these areas. So there are ties within policing, and there are also ties between policing and other agencies. Taking drugs as an example, because that is obviously one of the targets with regard to the National Policing Plan, the drug strategy for the UK�another tripartite arrangement�is about education, enforcement and treatment. It is quite right that the police service should be held accountable for levels of crime, but we are not the only people who should be held accountable for levels of crime. If 70 per cent of crime is drug-related, and if 70-80 per cent of offenders who are abusing drugs are leaving the criminal justice system without having received any treatment, we are just re-surfacing the problems for the future, and yet we are then accountable for the crime that they are going to go on to commit. So it is important in setting targets for the police that similar targets are then set for education, with regard to the education element of drugs, and for the Health Service with regard to the treatment side of drugs. Unless you have complementary targets going across the agencies, then real improvements are not going to be made.
  (Mr Elliott) I wonder if I can make a small point about street crime, which I think is worth thinking about, and this point I have made before about looking behind the targets. In the Street Crime Initiative in the majority of forces street crime went down. In some of those forces other crime went down, and in some of those forces other crime went up. The interesting question would be why. If you have a target and you meet the target, that for me is not the end of the question. The question is what happens elsewhere, what is behind the target. Why in some areas did street crime go down and burglary go down and other crime go down, and in some areas other crime stayed the same, and in some areas it went up? Those are interesting questions from behind the targets that we do not answer because we are too busy trying to hit the targets.

Chairman

255. Do you know the answer to that?
(Mr Elliott) No.

Sir Sydney Chapman

256. I get the impression that the NUT is against all targets except, to use your phrase, perhaps floor level targets. But could I put to you that if there were floor level targets, you would probably complain about the level at which they were set. Can I add to that�and I do not want to be destructive�how do you think the targets should be set?
(Mr Bangs) I think they should be set in consultation with local education authorities, and I think local education authorities should be challenged by inspectors. I think local education authorities should be required to consult with schools about what schools think is achievable or not. A good local education authority will test out the claims of schools as the schools will test out the claims of local education authorities. What I do not want to happen�and this has happened with a number of local education authorities, and you will have to ask the Local Government Association, for example, about the nature of this�is when the 2004 targets were set for local education authorities, there was an enormous amount of arm-bending going on by the DfES of individual local education authorities to achieve their particular target to match the new targets set for 2004. It was entirely top down and not bottom up. I understand that one or two authorities have resisted that process, saying, "We are being set arbitrary targets which we do not think we can achieve, but we are completely open to an evaluation of the quality of the education in our schools." That seems to me an entirely legitimate position. We have never come out against public service agreements. We have never been opposed to that, but I do think the government needs to evaluate not only what targets are for, and whether targets are giving government the information it needs about the efficiency of its services compared with the spending; it also needs to ask what effects are targets having on the service itself? I have to agree with Jan, for instance, that when you set a specific narrow target, as Michael Bishard said, it has an effect on behaviours. And I am deeply disturbed about the effect on the curriculum. What Macbeath and Galton found from Cambridge University was that in primary schools not only were certain subjects not being taught in year six, but general creativity in primary schools was going down. Teachers' own sense of creativity was going down, and young people themselves did not feel that they were getting as good a crack at what they thought schooling ought to be about. I can make the report available to the Committee if people would like to see that. It is on our website, but I will get a copy to you. I am in favour of government asking itself what it does need targets for, bearing in mind the need for a thumbnail sketch sometimes for political purposes about how your system is doing, and what effect those targets have on the behaviours of those who are delivering the service.

257. Has the Government ever consulted the NUT before setting targets?
(Mr Bangs) It has consulted with us on the level of the targets. In fact, there is a consultation that happens every year on school performance tables. There are regular consultations and we are part of that consultation loop. What we have never been consulted on is the nature of school performance tables themselves or indeed the particular nature of the targets being set; only on the levels.

  258. This next question is to both of you. Do you report to the Government on what you think are the effects of setting targets? In other words, does the Government have the benefit of your experience after they have set the targets?
  (Mrs Berry) As far as the National Policing Plan is concerned, that was established from a consultative group which included the Police Federation, and certainly at all stages of the draft we were consulted. I would not say that we were always listened to but that is an issue as far as consultation is concerned. But certainly there is a national policing forum which advises the Home Secretary on issues that will go into the National Policing Plan. It is very early days as to what will come out at the other end.
  (Mr Elliott) In terms of targets and performance indicators, I am sitting on a steering group on police reform that is looking at trying to get a wider view of targets. We are trying to get more qualitative factors into that process. So we are being involved in that but, as Jan says, how much note will be taken of it is under question, but we have been consulted and there is a drive to try and get more qualitative analysis into the whole question of performance indicators.
  (Mr Bangs) That is a very good question. We had a conference last summer with the National Campaign for the Arts. It was a conference on getting creativity back into the curriculum. It was an enormously successful conference, and Baroness Blackstone and Estelle Morris, the then Secretary of State, spoke to it. One of Estelle Morris's most frank admissions at that conference, which I think the Times Ed picked up but not many others, was that she could not square the circle of the assessment regime in schools and the need to actually re-invigorate creativity. She could not square the circle. As a frank admission of the problem caused by external evaluation, I could not have had a better picture of it. Just after that conference we published two reports: John Macbeath's and Maurice Galton's view of what is happening in primary schools, particularly in relation to testing and target-setting, and a Warwick University evaluation of the impact of tests in primary and secondary schools. I have not referred to that but the conclusions are more or less the same in terms of skewing what goes on in schools. We have had two very useful meetings with the Department about the impact of both of those reports, both from the School Work Force Unit and also from the Curriculum side. We have delivered the information; now we are interested in finding out what will happen at the other side.

Mr Prentice

259. Can I just follow on this line about the consultation that happens between the government and both organisations? Taking the NUT first, why is it that, when you have civil servants from the Department approach you and you gave your views, your views were just comprehensively ignored?
(Mr Bangs) That is a very good question. I think this is a government that is totally committed to a well-funded public service. This is from our outside reading; you probably get a much better picture than we do being Members of Parliament, but from our reading, it is the Treasury that needs to determine how to operate, and I think it has very clear ideas about how you determine success and failure, and it may be�and I think it is a very good point that one of you made�I cannot remember who it was�that actually we ought to be addressing more than just the DfES; we ought to be addressing government as a whole in terms of its target-setting regime, and not just concentrate on the general strategies adopted by the delivery unit, for example.

260. Are the civil servants not just going through the motions? You are being regarded just as a producer interest: "We have got to consult the NUT, we know what they are going to say, we will discount it," so this consultation really gives you very little chance of influencing the Government.
(Mr Bangs) I think there are two answers to that question. First of all, civil servants do not always go through the motions; they do genuinely want information on those areas where there is not a policy fix, basically. If it is set and predetermined�and target-setting is�they are going through the motions, I agree, but in some areas they are not.

261. Can I focus on the area of truancy? I raised it with Jeremy Beecham from the LGA last week. The Government has told LEAs that they have got to reduce school truancy by 10 per cent by 2004. Where did that 10 per cent figure come from? Was it plucked out of the air? When the departmental officials discussed this whole question of absence from school and truancy with you, what did you say in terms of whether that figure was remotely achievable or not?
(Mr Bangs) First of all, I do not know where the Government gets the evidential base for its crude percentages. I agree with the implication of your question about where it gets it from. I do not know. In fact, there is in interesting discourse going on with government about truancy and exclusion targets. I think the Government is in the middle of a re-evaluation of its own attitude towards the issues of pupil behaviour as expressed by truancy as well. I do not think it is down the end of the route that it has set itself, and I think it is beginning to understand that unless schools actually get the support they need, both in terms of truancy and in terms of pupil behaviour, then their own standards agenda is actually going to be affected. I do not agree with the truancy targets.

262. Should there be a truancy target at all? Yes or no?
(Mr Bangs) I think individual schools should set their own truancy targets. I do not think there should be a national target.

263. Can I move on to the police now, because again on this point about consultation, I was interested in what you had to say about the Federation being consulted over the draft National Policing Plan, and yet you told us just a few moments ago in the chapter on resources and so on there was no recognition of the impact that a major incident could have on the resources of the police force locally. Surely you would have drawn that to the attention of Home Office officials when you were given a copy of the draft plan.
(Mrs Berry) Yes, I did.

264. Yet it did not appear in the final version.
(Mrs Berry) No, it did not.

265. Did you get back to the Department?
(Mrs Berry) Yes.

266. What did they say?
(Mrs Berry) "It is very difficult to count it."

267. So if it is difficult to count, it does not get a mention?
(Mrs Berry) What you say is absolutely right. My fear with the performance culture is what cannot be counted, or what cannot be counted easily, will be discounted. It is very difficult. There are a number of different aspects of policing which will not appear in the statistics anywhere, and these are qualitative assessments. The time you might spend with an elderly person whose house has been broken into will be one statistic, but the quality of that interface is so vital to policing.

268. This is to follow Annette's question: do we need a National Policing Plan?
(Mrs Berry) I think with limited resources and increasing demand, it is right that a general strategic direction should be set, but it is still down to this balance, this tripartite balance that Annette was talking about earlier, that you have actually got to keep in balance. It has got to be flexible to take account of local needs and local differences. I agree with the point that John made earlier on: if you do not have a National Policing Plan that is flexible, then you stifle creativity, you actually stifle different ways of doing things, different initiatives to crime reduction, to divert young people away from drugs or crime or whatever. So if you have a National Policing Plan that is so rigid that you do not allow local problems to be taken into account, or you discourage creativity, then you have a very stagnant policing procedure.

269. Do police authorities do a good job in driving up the standards of their own police forces?
(Mrs Berry) I suspect that that is probably patchy. I do not think I am well sighted on the abilities of all police authorities around the country.

270. Is it not the job of the police authorities, just like it is the job of the fire authorities�and I do not want to be drawn into that�to keep an eye on what the Chief Constable is doing and to drive up standards and catch the robbers and the muggers, and make sure that the police force is firing on all cylinders?
(Mrs Berry) Absolutely right. I think the police authorities' job is very much an auditing and monitoring job and to a certain extent the National Policing Plan�and they obviously have got to produce a business plan for their own force area and that will need to take account of what the needs locally are. The police authority will need to audit and monitor that. There is a subtle difference between them being involved in operational policing, which is where the chief officer is responsible, but as far as accountability for performance is concerned, and auditing and monitoring what the Police Service is doing in a local area, that is definitely the job of the police authorities.

271. I ask this question because I have been reading the National Policing Plan and without quoting great chunks, looking at Annex B on the actions that the chief officers of police authorities should take account of in drawing up the local policing plan, I read this and thought that this is just commonsense stuff and this should be happening anyway�monitoring performance targets, working closely with local partners to ensure that alcohol-related crimes are tackled. This is stuff that should be happening anyway, is it not?
(Mrs Berry) If you take the National Policing Plan to a certain extent what you have is every government announcement for the last 12 to 18 months brought into one document. It is not surprising that a lot of things that are down there as a checklist of what police authorities should be doing are contained in Annex B.

272. Just one final question. If a police force fails to deliver on targets, who should carry the can? Are there ever circumstances when the chief constable should resign?
(Mrs Berry) That depends on why they have not met the targets. As I said right at the very beginning, a target is a target and inevitably a lot of targets will not be met and you have to look at why they are not being met. If they are not being met because the service is not being run professionally or there is unsatisfactory performance in that by a chief officer or whoever, then they should be held to account for that.

Mr Liddell-Grainger

273. Just a couple of short questions, Mr Bangs. Clearly the evidence today is that teachers are under tremendous pressure with league tables, targets, all of that, but should that lead to teachers cheating in terms of test results?
(Mr Bangs) I think that is a very good question. I cannot put my finger on what the bases are of claims about cheating. I think�and all the evidence I receive is�that the amount of illegal test paper opening, for instance, is very small indeed. But as you have settled into the current National Curriculum testing arrangements, it is not necessary to open papers if you want to affect the behaviours. What you have to do, and that is the findings and evidence of our research, is to actually involve children in practising for the tests. What I can say there is that all teachers, this is our evidence from our research, at year six, for example, will look back at previous test papers and there will be a lot of practising for the tests that take place in May. So my view is that there is very little cheating going on but the impact of the tests, linked as they are to the targets, means that teachers will concentrate on teaching to the tests in year six.

274. We might have discussions about the level of cheating that is going on, but if someone is found to be cheating, would it be right to just dismiss them from the service?
(Mr Bangs) That is a very interesting question. The General Teaching Council has been examining the individual cases of that tiny number of headteachers who have been found to be cheating in terms of opening papers. I support the GTC on this, I think the GTC has necessarily taken a pragmatic view of the individual cases. For instance, if the headteacher was under enormous pressure, on the edge of a nervous breakdown, and he or she�and it is normally a she�has put in an enormous number of years' service, I think the GTC has taken that into account as well. What I prefer to do is leave it to the General Teaching Council to evaluate the individual circumstances of people involved in that.

Chairman

275. I do not think John was here when we had David Hart in front of us a few weeks ago�
(Mr Bangs) No, I was not, I would have liked to have been.

276. He was far more robust in his commentary on this than you are being. He accepted the evidence that The Guardian had unearthed about the scale of cheating going on in relation to testing. He was denouncing it as wholly unprofessional behaviour that needed to be sorted. You said it is not going on, it is just at the margins and these people are very stressed.
(Mr Bangs) I do not condone and I denounce cheating in the tests. I hoped I had said that and I am sorry if it was not clear. I think cheating in the tests does not do anyone any good at all and it certainly means that for that teacher concerned if they are caught it is the end of their professional career, and should be. I hope that is clear. What I was trying to describe, because I was trying to answer a question about should we have a common position about dismissal right the way across the piece, was that the General Teaching Council and those involved in the investigating and examination committees have had an enormous amount of training and they are now setting up themselves a set of criteria about how to evaluate individual cases and I would prefer to rely on their judgment rather than have a snap judgment about everyone being dismissed. That is all I was saying.

Chairman: Thank you for that clarification.

Mr Liddell-Grainger

277. Classroom assistants are an enormous help and would be a great benefit I am sure to them, so why do we have this reluctance on the question of classroom assistants?
(Mr Bangs) Chair, have we got another hour?

Chairman

278. No, if you could give just a very brief snapshot answer.
(Mr Bangs) There is absolutely no reluctance in terms of support for teachers. In fact, we have probably done more research than anyone else into teachers' views about support. Teachers believe that they do need support in the classroom. 40 per cent of teachers have support for literacy and numeracy and value it; 60 per cent do not. We believe that 100 per cent of primary teachers should have support for literacy and numeracy in the classroom from teaching assistants or teacher assistants, as we like to describe it, and also they need support for administration and clerical work as well. Where the pinch point comes is the Government's model for future teaching staff. It says that if you are going to get guaranteed marking and preparation time for primary schools, we have not got enough teachers to allow that to take place, therefore we need high-level teaching assistants or cover assistants to allow that marking and preparation time. Our response to that is there have been so many teachers driven out of the profession by excessive workloads in the last few years that the whole purpose of remodelling and reform must be to attract those teachers back into the classroom and, additionally, to enable the workload pressures to be placed on teachers. We do not believe there is a need neither do we believe that there should be a blurring between the roles of teachers and high-level teaching assistants. It is a small part of the government's reform agenda. It is one where we are engaged in a very, very fierce debate with government but there is a lot of consensus on the rest.

  279. Can I turn to a parallel question on the police force. Are there any areas where we think we can bring civilian staff in to free up officers to get on with the work and problems you have described this morning?
  (Mrs Berry) I think there are. I think the Police Service has moved a fair way in that direction with the police civilianisation programme. It has downsized in other areas, I have to say, but there are a lot of administrative positions behind the scenes in the police stations, in custody areas which support staff are coming into and are being very effective in. There are police forces where officers who are retiring from the service are retained or re-employed as statement takers using the skills that they have gained whilst they have been police officers. So there are a number of areas where support staff are extremely useful. The one area where we do not believe that support staff should be used is in the area of community support officers. We believe that the job of the professional police officer in patrol is for a fully trained police officer. We believe that the most difficult part of policing is patrol. You can train people, you can equip them in a number of different ways to do the specialist areas of policing but when it comes to dealing with reactive policing�emergency situations�we tend to have our least experienced officers doing the most risky part of our job, and that is something which I think over a period of time we have to address. But we have now got a situation where the least trained people are going to be dealing and interfacing with the public in what we argue to be the most difficult part of policing. I think that is for us a step too far.
  (Mr Elliott) Can I mention one area where I think civilianisation works against targets and that is in terms of reducing ill-health retirements. We would like to see more police officers retained rather than go out in ill-health retirements. What we would like to see happen is that those people who have got skills and abilities which could be used within service but who are not fit for a full range of police duties are redeployed. Many of those jobs are currently done by civilians. As you have more civilians you reduce the potential for that to take place. The government target is to reduce ill-health retirements. Increasing civilianisation works against that in some cases. There are some areas where police officers who are not fit for a full range of police duties would have skills and abilities and experience to offer to the job. Many areas have been civilianised and there is a balance there to be struck between increased civilianisation

280. You mean with continuation of service so they would not be receiving a pension and still filling a civilian job?
(Mr Elliott) No, what I am saying is we would like to see people who are not fit for a full range of duties given a chance, with skills and abilities to give to the service, and redeployed within the service. It is a government aim and our aim and civilianisation works against that if you are not careful. There is a fine balance to be struck here because to retire somebody on ill health costs a lot of money and you lose that experience and ability.

  281. A current question; how do you see this question of non-payment of fines? Do you have a view on that, people just refusing to pay?
  (Mr Elliott) If people are fined they should pay their money. That is the object of the exercise, it is pretty fundamental, and there is no point having a punishment if it is not exacted.
  (Mrs Berry) It is a huge problem with the amount of warrants and very little attention is given to them. Particularly if you are going to have the new fixed penalty notices, if people are not going to pay them then you close down the court system if you start bringing them into court for payment. You have got to have methods of disposal for all these people (in terms of the policing plan) who are brought to justice. There is a variety of different ways people can be brought to justice. Certainly non-payment of fines, which links into the execution of warrants, is a problem in its own right.

282. Because you are tied up in physically having to deal with the execution of warrants and officers to go and deal with that?
(Mrs Berry) The number of warrants that we execute in terms of non-payment of fines is not a key priority for policing, therefore it does not tend to attract attention. The difficulty is�and it is pretty short-term thinking�if you have effective justice and you actually have different means of disposing of offenders, then in the long term you should be reducing crime and reducing anti-social behaviour, reducing road traffic, etcetera, but if you have no means of enforcing the penalties then the long-term benefits will never be gained.

Mr Prentice

283. On this business about ill-health retirements, I was absolutely astonished to learn over the past few days that 70 per cent of firefighters retire early for reasons of ill health. I just wonder what the figure is currently with the police force. I am looking at the National Policing Plan here to get at this point just so it gets on the record. The Government want the retirement target by 2005-06 to be 6.5 ill-health retirements per 1,000 officers. What is it at the moment?
(Mr Elliott) We measure ill-health retirements on the basis of a percentage number of retirements against total retirements. There is a question whether that is a meaningful measure or not. It is currently down to 30 per cent of all retirements whereas five years ago it was 50 per cent of all retirements. Why I say there is a question over whether it is a meaningful measure is because if you attract and retain people in the service and do not retire people per se the figures can be skewed by the total number of retirements against ill-health retirements. We have reduced considerably ill-health retirements and ill-health sickness figures over the last five years.

284. This may be a bit tangential but it is interesting, is it not. If the retirement pay-off, for want of a better word, were changed at all, would that encourage police officers to go back into the service or not? Would it have to be changed at all?
(Mr Elliott) I am not quite sure of your question. We are with government exploring ways to get people to stay in the job when they are not fit for a full range of duties and, secondly, we are exploring with government the opportunity to get people to work beyond 30 years. A lot of people go out on the 30 years retirement and we are keen to attract people to stay beyond 30 years and stay to the upper age limit, which is 55 or 60 depending on your rank. We are very keen to see people retained in service longer. Our view is that the pension scheme was designed to operate over a long period of time and is fair and that including the payment of a commuted lump sum which forms part of the pension entitlement is a quid pro quo. We are exploring the possibility of retaining people not fit for a full range of duties and retaining people beyond 30 year retirement with the government now.

285. My question was not very coherent but you answered what I meant to ask you. One final point, I do not know if it is possible for you to give me the percentage figures but you said just a few moments ago that 50 per cent of retirements were due to reasons of ill health and then it came down to 30 per cent. Is it possible to project that forward to 2005-06 because I do not really understand the 6.5 per 1,000?
(Mr Elliott) Can I be frank, Mr Prentice, and say I am not sure whether I do either.

Chairman

286. Shall we just leave it that it is an interesting question and we are not too sure about the answer.
(Mr Elliott) The point I am making is that ill-health retirements are reducing. We would want them to reduce further if that is possible but always bear in mind that people who are not fit at all for any duty and have nothing to offer and are too ill to go on should be retired on ill-health.

Chairman: It is a good area to ask questions in relation to targets, not least because it gave you the chance to show the conflict between that target and the civilianisation target too. That is a very interesting point to open up for us.

Mr Heyes

  287. I am conscious of the time and although I have got what I think might be a fairly lengthy question it warrants only a very brief answer. I want to test my theory that centrally imposed targets are to some extent a substitute for failure or loss of local democracy and local determination. You have both made a case for more locally set targets, either by the police authority, which was mentioned as having an important role to play, and maybe the LEAs similarly. My perception is that the cynical view is that the police authorities have little or no authority, they are fairly toothless organisations nowadays, and a similar comment could be made about LEAs, that they are relatively disempowered and their legitimacy is watered down. You almost described them as tools of the DfES in one of your earlier answers. The question out of that is if you believe in more locally set targets as a counter-balance to centrally imposed targets, who is going to set those targets? In the case of the police it seems to me that that power resides with the all powerful chief constables and in the case of education it is the headteachers who are now all powerful. Are you not going to give the local target setting power back to the people who are responsible for delivery?
  (Mr Bangs) Very very briefly, I think local education authorities should be restored and have their functions defined. Essentially their functions should be supporting and challenging schools and they should be part of the partnership between themselves and schools. I think that the setting of targets should be conducted by authorities who have got good performance assessment, people working for them, working closely with the schools and working closely with the Government's National Inspection Agency. It is connected with a loss of democracy and a lack of capacity in authority; both democracy and capacity have to be restored.
  (Mrs Berry) I am not sure I share your view of police authorities. I think they are probably more accountable today than they have ever been and also they have more responsibility. The Government have recently announced that they are now going to have responsibility for health and safety. We might not agree with that but that is another issue altogether. I do not necessarily share your view that police authorities are a toothless tiger. The target setting, where target setting is necessary, needs to be undertaken as close to where it is going to be delivered and from people who have a responsibility for delivering the efficiency and effectiveness of policing. That certainly goes down to police authorities. So the importance of policing and the importance of the tripartite arrangement is this balance between the government, the chief officer and the police authority and you need to keep those three angles very much in balance.

Mr Heyes: I will settle for one out of two agreeing with my theory.

Brian White

288. Just one quick question, the import of what you were saying is that targets need to be set at a national level, that there is a management at a different level, ie the LEA and police authority, and then there is a third operational level, and that really what you are saying is that targets are a substitute for good management, and that is a danger of what is happening at the moment?
(Mrs Berry) I think you are right in one respect. Where I would probably differ is that where you have limited resources and you have increasing demand somebody at some stage in the equation, I think probably at three levels, has got to prioritise where you are going to put your effort, where it is more important, and inevitably there will be a difference of opinion as to where that might be.

  289. If meeting your target means that somebody else does not meet their target in another agency, how do you avoid that?
  (Mrs Berry) That again is a position of justification and also accountability both at national and local level. The Police Service cannot operate in isolation from all our other agencies and partners. To be effective we have to work together with these people, we cannot work on our own.
  (Mr Elliott) I think there needs to be some overview so that the agencies that affect policing and social function need to have similar and not conflicting targets in some areas. In some areas in the past there have been conflicting targets which have not worked well for the police and other agencies.

Chairman

  290. In a nutshell the answer to Brian White's question is if you did have a good management system and if you did have effective mechanisms and accountability, preferably at a very local level, you would not need centrally imposed targets, would you?
  (Mrs Berry) We also have national responsibilities and we have local responsibilities and sometimes you have to balance them. Our policing system is arranged on a local basis. We have talked earlier about how Soham were able to get assistance from other police forces to assist them. What we would have if you were solely going on statistical returns is to draw police officers from the rural areas into urban areas and you would diminish your police officers out of those other areas. That is something which I personally would not want to see. You have to balance those two together.
  (Mr Bangs) The government used to have a unit called the Assessment Performance Unit for education. It provided information to government about the effectiveness of the system and whether or not its money was being spent well. I think there is a very strong argument for an independent assessment of performance unit again. I think it would provide much better, fine-grained, detailed information about the performance of the system than a very crude national target setting system based on outcomes linked to very crude performance tables.

Mr Liddell-Grainger

291. Is there a target on special constables?
(Mrs Berry) There has just been one introduced and I am not well-sighted on what that target is. There has been an awful lot of money put into trying to encourage more special constables. The end result of that, and a few million pounds down the line, is we have got less special constables today than we had when we started. It has not been a very successful campaign.

292. Parish wardens?
(Mrs Berry) Parish wardens are local initiatives. They are given different titles and some of those parish wardens�

293. You know what I mean, we will bundle them up as whatever.
(Mrs Berry) Neighbourhood wardens are employed by local authorities as well but they are normally employed. The problem we have is that anything in the voluntary sector seems to be reducing at the moment and we have changed our stance on the special constabulary. It would be true to say that the Police Federation has not been terribly complimentary about them over the years. Our stance has changed and it has changed because an awful lot of effort has been put into professionalising the special constabulary and giving them the skills to do front-line policing.

294. I am interested in what you say about special constables. Is it not a stop-gap for chief constables to put more coppers into areas where he is trying to hit targets? For instance, you made a point about rural areas. The chief constable has got a definite problem, he has got to reduce crime in Bristol so what has he got to do�move officers, which the chief constable is looking at seriously, out of there? What do you replace them with? Are you happy to see more special constables running around rural areas?
(Mrs Berry) I do not think that we are being very successful in employing special constables or getting them to volunteer. What is important is that whoever is being asked to do a particular job in a particular area has the skills to do that job.

295. One of the situations is that street crime has gone down in some places but burglary has gone up so therefore you have got rural crime as the fastest growing of all and to try to get a target in town means you are having to take resources from somewhere else. Do you think the whole thing is about face?
(Mrs Berry) I think policing and crime occurs in different places and it is a point that Clint made earlier on. It certainly happened with the Street Crime Initiative. You can be very, very successful when you are looking at a very small number of targets. If you put all your resources into one target it could be very effective, but there is a whole host of social targets and performance indicators that we need to hit. You need the resources to do that. The Special Constabulary will be a vital part of that which is why we have changed our stance and why we are saying that there should be some form of reward for these people to encourage them to come into the Special Constabulary.

296. How many targets have you got?
(Mrs Berry) At the moment?

297. Yes.
(Mrs Berry) Through the National Policing Plan?

298. I saw you counting them out.
(Mrs Berry) There are 10 indicators.

299. Below that?
(Mrs Berry) Below that there is no figure at this moment because some of them will be set at a force level and some of them will be set at a local level and some of them are so vaguely written in the National Policing Plan�and this is one week old at the moment�so how they will be going into the business plans for forces from April of next year is a matter of discussion at the moment.

300. That leaves the Chief Constable of Avon and Somerset a pretty concerned man because he does not know where he is going to end up in a year's time. As the Police Federation are you going to take a pretty proactive line on what you should and should not be trying to achieve?
(Mrs Berry) We are sympathetic to chief officers who are concerned about their ability to meet the targets. We are sympathetic to that. It goes back to the government's job in setting what the strategic direction of the Police Service should be. There may be some things which we have done in the past which we will not be able to do in the future and somebody has got to take responsibility for making that decision. We are and my colleagues are the people who have to meet the public face-to-face. We are the ones who have to deal with their displeasure, back to an earlier question, when they are not getting the service that they want.

301. Okay, you do not like something and you take a very, very robust line as the Federation. What are you going to do about it?
(Mrs Berry) By way of an example.

Chairman: I think he wants you to go and arrest somebody!

Mr Liddell-Grainger

302. Just one last thing on education. You are saying that it is very clear that teachers do not like SATs test, etcetera. How far are you prepared to go in order to make sure teachers do not have to do them? Are you prepared to pull members out?
(Mr Bangs) The survey we conducted through Warwick University showed that 40 per cent1 of our members wanted to boycott the tests but the vast majority of those thought it should only be with other teacher organisations. I think that is an expression of the feeling that what they do is constantly skewed by the test targets and performance tables. We are writing to the other teacher organisations to get their views about those tests. Principally it has been a campaign and a reasoned argument with government as well to try

1 Witness Correction: Over 80 per cent.

and skew us away from the over-assessment that we have at themoment in the current regime. I note, incidentally, that the chair of the Education Select Committee, Barry Sheerman, has also come out and said (since I shared a radio station with him) that he does not see the argument, for example, for key stage one tests. He said that and so did Margaret Morrissey who is also the Secretary of the National Federation of Parent Teachers' Associations. That is shared by the Welsh Assembly where the Welsh Education Secretary Jane Davidson has abolished both school performance tables and key stage one tests. When I hear the government say that is just another country I think what the Government ought to do is evaluate the impact of that. All our information is that it has had no impact at all, no impact on standards. In fact, there is a general feeling that there is a bit of trust going on in the system.

Chairman

303. You do not think proposed actions of this kind confirm the popular impression that the NUT are against things?
(Mr Bangs) No, I do not. We have consistently argued for a national evaluation system of teachers and institutions, which is about, as Jan said, getting qualitative information that you can use and about making people accountable. We have always argued that people should be fairly accountable but not on the basis of very crude tables.

304. Thank you very much. That brings us round to where we started. It is very useful. I am sorry we kept you a bit longer than perhaps we promised. It is extremely useful for us to get different public services together talking about the same kind of thing. It may be unusual to you but it is extremely valuable for us. We are grateful to you for coming along.
(Mr Bangs) Thank you for inviting us.

[top]

LORD BROWNE OF MADINGLEY

THURSDAY 28 NOVEMBER 2002

In the absence of the Chairman, Sir Sydney Chapman was called to the Chair.

Sir Sydney Chapman

305. Lord Browne, welcome to this Committee. Thank you for coming. Can I explain at the outset that I am not unfortunately, for myself, Dr Tony Wright, but Sydney Chapman. I think Dr Wright may have told you that he has fortuitously got an early question to the Secretary of State for Education and Skills and he has put me in his place but as soon as he returns I will hand over to him. First of all, to warm you up, if I may. You were raised to the peerage last year and, if I remember rightly, you made your maiden speech on Kyoto in February.

(Lord Browne of Madingley) Correct.

306. To my knowledge you spoke again in the House of Lords in April. How often are you able to attend the Other Place, as we call it, and how frequently do you think you will be making contributions to it?
(Lord Browne of Madingley) I regret that I do not attend enough times. I think it is a very valuable forum, it is a very valuable place to be, but I do not attend as frequently as either I would wish or as I should. I think normally I would say events, since I have a full-time job, seem to get in the way, especially as the world is changing rather quickly at this moment. That does not mean to say that it is always like that and it is one thing that is always on the top of my agenda to do.

307. Thank you, I am very grateful for that. Again, apologies for my voice. In your memorandum, for which many thanks, you begin by saying "It is difficult to judge whether BP's experience of Performance Targets has any direct relevance or application to the public sector. Probably there is some overlap, but only to a limited extent". I think you are probably being rather modest in saying that. What I would very much like to ask you is what do you think the government can learn from the way BP is run?
(Lord Browne of Madingley) I have one huge deficit in this area in that I have never worked in the public sector, so I have no direct experience, of course, of what targets really mean to the public sector. I simply observe it as any ordinary person would. I think our experience has been very long in performance targets and performance measurement. There are some things that we have learned, I think, as an organisation that may, with someone who has experience in the public sector, be of relevance to the public sector when interpreted. I simply leave it at that since our direct experience as a company is not in the public sector.

Sir Sydney Chapman: Thank you.

Brian White

308. BP is one of what I would call pretty good managed companies. You have a long history of that. One of the things you say in your report is that targets are not a substitute for good management and should be assessed in the context of a company's own ethos. Do you feel that in the public sector we tend to use targets as a substitute for good management?
(Lord Browne of Madingley) I cannot tell. Sometimes they appear to be portrayed as the very essence of the particular public sector activity that is going on. For us I think targets are but one part of the whole tapestry of things you have to do to get people motivated, to aspire to do things, as well as to comply to certain standards. Targets are two things really. They set standards for compliance but they do much more important things as well as they motivate people to aspire to do better. I think what we meant by this was that targets simply taken on their own do not substitute for management. Management is about setting context, about what is the wider frame in which targets exist and then providing the means whereby targets can be fulfilled. It is very difficult�I think it is impossible actually�to ask a manager, she or he, to do something without the resources appropriate to hit the targets which were agreed. The process of setting targets is to discuss with a manager what is the resource requirement as well as the outcome. That is a very important process to give the targets credibility.

309. My background is as a systems analyst and looking at one of the things that many companies went through, they have gone through various fashions in management speak over the years. Is not one of the problems the government has got that they are looking at a management culture which was prevalent five to 10 years ago and not a private sector management culture which is prevalent now?
(Lord Browne of Madingley) I think management cultures, if you will, are about learning from past mistakes and also reinforcing things which work well. Given the competitive nature of industry it is necessary to learn very quickly so, you are absolutely right, things keep changing. People do not sit with one way of doing something for a very long time because if you did the chances are you would be competed out of business and, besides, you learn because nobody can get it right first time, you learn about what is right and wrong about a management system. It is about adapting reasonably quickly. There are some enduring things. You can set targets, you can express ways forward, but you must have some enduring principles. In companies these are called values, standards, if you will, which are things which guide the whole firm and they do not change very quickly. The mechanism by which a strategy and plan is implemented does change because it is based on the learning of experience.

310. One of the things which there seems to be with targets is that there seems to be this assumption that if you can reach a target you can reach some sunny upland, you need to go through one more step change to reach it whereas the reality in the business world is one of constant change.
(Lord Browne of Madingley) Correct.

311. Is that not one of the problems the government has got, that they do think they can get somewhere by the use of targets?
(Lord Browne of Madingley) I will distance myself, Mr White, if I may, and just talk about my own experience and not the government. I think that targets are not an end in themselves. They are used in business as a compass, so which direction you are going in, as the adjunct to motivation, as an expression of the context but they are not the end in themselves. If they are the end in themselves you can get very strange behaviour. You can set a target on one thing and have adverse consequences. It is like the old stories you read in business text books and the newspapers about factories which produce shoes. If you ask a factory to produce a lot of shoes, if you do not say they have to be matched pairs it is quite conceivable you get only left-hand ones. You have to be very careful how you set targets to make them work, very careful.

312. You set targets for production rather than the bottom line of profitability in your company, if I understand rightly. The media decided that was not a good target. Is there not a problem with setting targets even in a business context, and it is even more true in the public sector, that if the media decide that they have got a story they use the targets as a way of beating the company round the head with it?
(Lord Browne of Madingley) I will make no comments on the media. I think it is a very good example of how one has to control targets. We actually set a suite of targets but through inadvertent or advertent ways, and it is very difficult to tell, one of them became more important than any other and so was focused on as being, if you will, a litmus test of whether everything else was working. In fact it was one of the minor targets because of the nature of the implications of the financial targets. We set financial targets also at the same time. The lesson learned, I think, was if you want to set targets, they always have to be balanced across activity to make sure they do not get separated. This is very difficult indeed. It is very difficult. I am not sure we have the solution yet.

313. My final question is how do you make sure the people at the operational end of the business are involved in setting the target?
(Lord Browne of Madingley) You cannot set targets unless you involve those people intimately who are going to operate on those targets. You have to go to a level of inquiry of what is possible and you have to go through that inquiry again and again by saying "If I give these resources what would happen? If I reduce resources what would happen?" Then you set targets based on this level of inquiry which are actually owned and felt by the managers who operate on them. If you do not do that then they do not have much credibility, they do not do anything for anybody, they say simply they are targets detached from the reality of what they can do actually.

314. Do your external auditors get involved in the target setting in any way? Are you externally monitored?
(Lord Browne of Madingley) They do not. We have our own internal, as it were, external monitoring systems through both the control function, which has to test the capability of the organisation as to its ability to get at the target, and also audit which is, if you will, the check on internal control processes. These things happen inside the firm and, therefore, we get warning very early that some targets may not be achievable in detail and you have to monitor against them, not only just in a compliance way but you need to understand why people cannot do what they said previously they could do. Something happens in the world, the world is not a predictable place, all sorts of things happen, therefore you have to understand what it is that is really going on against the target and modify your position as time goes on.

Mr Liddell-Grainger

315. Can I follow up the last point, if I may. You are an international company. When you are setting a target overseas do you take in the frailties of the local population? If you have got to face constraints over Mexico, say, obviously you go out and look to deal with a slightly sort of different ethos from what you are used to. How do you incorporate that? Do you just say in the group sector "Right, that is what we are going to do"? Do you discuss it with them and go through the whole thing and then come up with it? Do you try and weather it to the local area that you are working in?
(Lord Browne of Madingley) Needless to say, some areas may be better than others, it may be that Mexico is far better than Aberdeen, let us say. One never knows which way round these things are. When you set targets you have to look at three things. Firstly you have to look at the capacity of the organisation you are setting the target for. How well honed is the team? What sort of capability does it have? Does it have all the professional expertise? Secondly, the track record of the team. It is very important to refer back always before you go forward otherwise there is an interruption. There has to be a progress from the past to the future. The third thing is what do the relevant people doing similar things either inside the company or outside the company actually do? This is called bench marking when it goes outside or peer review when it goes inside. That gives you a suite of things which say somewhere in here I can find the right target.

316. In your simplified organisation graph you have the peer review and the bench marking within that, not at all places. Is that because some of these came over a three or four year period? Would you try to go from one financial year to another financial year or over a longer period?
(Lord Browne of Madingley) Over a much longer period. Our business is such that what you do in year one you may not see until year seven, so we are very long term. Some of our business is very short term: what happens in a petrol station? But in many cases it is very, very long term decision making.

317. That gives you the chance on review as you go along to boost the team. Let us say you are exploring the Antarctica, you boost the team to go and do that or you boost the team in Mexico because you have a long period. Do you find you can be much more flexible in putting more people and more resources into that to hit that target given you are going over a much longer period?
(Lord Browne of Madingley) You can adjust a lot. Any long term target must have certain intermediate targets. It is very risky to wait to the very end to see what has happened, to put billions of pounds in and say "Well, I will wait and see what happens in seven years". You must have intermediate stages, so that as you look at these intermediate stages you can adjust the capability of the team or, indeed, the expected outcome. It may be quite simply that as you do a project you learn a lot and what you first thought could happen simply cannot so you have to reflect that piece of reality.

318. How does the city view targets? Do they view them as a necessity of business nowadays or do they see it as an add on, an enhancement of value?
(Lord Browne of Madingley) Yes.

319. How do they view targets?
(Lord Browne of Madingley) I think at the moment the city, if I can make it a bit more international�

320. I am sorry, I am talking about international business, yes.
(Lord Browne of Madingley) Financial markets have mixed views about targets. Some investors would say "We do not want targets, what we want to understand is the way in which you portray your strategy, how you execute it and how you control it". That is one camp of people. Another camp of people say "No, we want expectations, we want guidance on what you can earn every quarter". Very, very short term indeed. They are mixed in-between. My own view is that one has to be responsive, obviously, to the owners of the firm, the investors, and I think the body of them at least want some compass. They want to know what are you doing, how is what you are doing different from a similar investment they could make elsewhere. That seems to be the essence of what they want to do. The degree of detail varies according to what sort of investor they are, from the very short term or very close detail, to the longer term, buy and hold investor, if you will, who might be quite happy to look at more general guidance on strategy and execution.

321. When you do the presentations�it does not matter which city it is�to fund managers etc, and you are talking over a long term period, do you try and incorporate in your targets that minutiae level into your presentations? Do you find it that important?
(Lord Browne of Madingley) It depends. We do not have very, very short term targets, we cannot do that and, indeed, it is probably wrong for us, but we do talk about the overall trend of things. When we have a target we talk about it and give a report on how well it is going and what are we doing to get there. If you set a target of some sort then you are obligated to update against that target.

Mr Liddell-Grainger: Interesting.

Mr Hopkins

322. I have got some modest experience of industry and of the public services, education. My experience suggests that in mechanical processes, technology, one can raise productivity by investment, by new techniques but people are very different from processes. One big company I know introduced performance related pay to try to get their staff to work harder. They found productivity fell rather than rose and they abandoned performance related pay. Have you had similar experiences in BP?

(Lord Browne of Madingley) We have performance related pay, we call it variable performance pay. Indeed, it does vary according to performance. A lot of our performance pay is based on how the whole team of BP works. Everyone feels they have a joint stake in the totality of the enterprise, not just what they are doing, because if targets are too closely specified person to person and pay is related to those things it is more likely than not that you begin to pull the company apart rather than bring it together. The challenge always, I think, with a large enterprise is to make sure it is all joined up the whole time. It is always a challenge that people who are very well meaning and who really do want to do a fine job only focus on their job and then forget that they are part of the greater team. Our experience with performance pay is that it is good, it does make people focus on the whole enterprise, it does allow them to see the level of achievement reached with their personal objectives but, again, objective setting and targeting has to be done very, very carefully otherwise the wrong answer comes out for them and for the company. It must be done very, very carefully indeed.

323. I had a three year placement with the Industry and Parliament Trust with a large company and I saw this team approach in action, it does work. Technology imported from Japan in particular where everybody is taken seriously, whatever level they are in the team. That is quite different from putting pressure on individual teachers to get particular results and paying an individual teacher or an individual company. So you are saying provided the team competes rather than the individual then performance related pay is all right.
(Lord Browne of Madingley) Our experience is that a team approach is good and everything is connected. If you regard me as the first of employees then everything is related from my pay. Everybody in the company can see with quite a degree of clarity how everybody is�I want to put this loosely�sharing the gain and sharing the pain as a team. I think that is very helpful. What is not helpful in an industrial enterprise is when you set up competition on a very personal basis internally when actually the enterprise has one purpose and people do not invest in parts of the enterprise, they invest in the whole enterprise. You need to speak into that, I think.

324. You are saying simple top down pressure on individuals does not help.
(Lord Browne of Madingley) No.

325. Would you say that has a depressing effect on morale and does not advantage the enterprise?
(Lord Browne of Madingley) I think simple pressure would not achieve much. It might well achieve behaviour which is not ethical and that would be very, very damaging indeed. You have to have a discussion with an individual, let us say in charge of the big team, about what it would take to make the targets achievable, which is resources, time or simply resetting the targets. In reality if they cannot be achieved then you have to have a realistic conversation with that person and say "Well, we have to be realistic, it will not work". I think pressure, as you put it, does not work, it just does not work.

326. You think possibly the public services might have something to learn from your experience?
(Lord Browne of Madingley) Again, it depends on the relevance of the learning but in our experience pressure does not work and I do not believe we could bring ourselves to do that.

Mr Trend

327. May I say, firstly, Lord Browne, how much I enjoyed the brief you sent to the Committee. Commendably short, very, very clear and clearly you understand the matter of setting the targets in industry as well as anyone can and the difference between that and the government. What I hope to do is try and get you to say something about how government uses targets and might use them better. We do not often have a busy city industrialist sitting in front of us but we had Martin Taylor from WH Smith and he was gloriously broad brush in what he felt the government could and should do. Could I try and tempt you to say how you think the government as a whole approaches the question of targets and in what way it could be improved?
(Lord Browne of Madingley) I think I would go as far as this. It seems to me that everybody wants to know something about what is going on around them. How things being provided to them are being improved or not improved and what to expect next year or maybe for 20 years depending on the nature of the activity. So some form of guidance which is fair and balanced�which says to people "Look, this is how things are going"�has to be a very good thing. It is in tune, I think, with modern times. Much as investors perhaps a very long time ago would have been quite happy to say "Carry on, that is fine and do not tell us anything", really I do not think that is the modern approach, people want to know what is going on, what to expect and not to be disappointed, when they are disappointed they do react. I think things which explain what the strategy is, what is going on, which are in tune equally with the organisation that is performing the task is very good because I think it can create reality and it can create confidence, also.

328. Take a specific case, has it been right to publish league tables of schools? We have had a representative of the NUT who doubts that but I should think most parents as part of a package of assessing a school for their children find league tables helpful. Do you have a view?
(Lord Browne of Madingley) Again, I had better not comment on government policy but I will talk a bit about league tables. Our experience with league tables has been mixed inside BP. At one stage we did decide to rank order performance of very small units within one of our divisions, the retail division I think. This was interesting to start with. It said to people "I can see where we need to go". Continuous attention on the league table, however, made the league table itself the purpose, not the learning. It is very important, I think, that league tables, or whatever measurement, should be used to improve and to learn rather than be the end in itself. That is what I think we have done. We have converted this into something which is much more akin to learning, which is getting peers to review themselves, and peers I think review themselves better than superiors reviewing subordinates. That creates a sense that everyone is sharing best practice and going forward and learning.

329. I am beginning to feel I am not going to be able to draw you on this. Let me try once more. Do you think there is any way in which governments or perhaps the senior administration of a country could be made to join a sharing of pain/sharing the gain culture so that if certain targets were not met by government a level of public administration might have their pay enhanced or decreased in an appropriate way? Is that something you can do in public service?
(Lord Browne of Madingley) To my knowledge I have never seen it done so, therefore, there must be reasons why it has not been done in the past. It is, of course, a tradition and something which provides incentive in the business and industrial sectors. It is something about aligning promises, commitments, if you will, targets to outcomes much as investors would align themselves to the company. It has a sense that works. Also, I think it is the condition upon which people join business. Whether it is the condition upon which they join public administration or government has to be a question.

330. I will try once more. Do you think there is anything that the government, anyone, could learn further from the way in which you organise your own business, say, and the model of the way you have separated your business? The four main businesses are now fairly coherent bodies and responsible to themselves for most of their business. Is that a good model for government?
(Lord Browne of Madingley) I think there may be applications. I do think that some government departments, the DTI, have had discussions on efficiency and organisation which have accessed some of these processes and practices for various studies and, indeed, we have contributed to these departmental inquiries. I think there are some things which can be used. I am reluctant to say because it works in business, by definition it works in government. I do not believe that because everything is dependent upon the circumstances in which it is set. Our targets and our mechanism of managing and governing the firm are very dependent upon what our purpose is and what we do, so a broad extrapolation I think is wrong.

Tony Wright returned to the Chair

Chairman: Could I apologise for my absence. No discourtesy intended. I had to go and harass the government for a few minutes.

Mr Lyons

331. Still on the question of targets. BP talk about targets being challenging but achievable, which I think is very sensible. Will there ever be an occasion when you think someone is not being challenged enough in terms of their prediction and forecast?
(Lord Browne of Madingley) Obviously there will be times like that so we have to look at targets�I talk very internally in the company, not necessarily targets we expect externally�to say can we do some things. Firstly, it is very important to set up a code of behaviour which says "Tell the truth. Be ethical about what you do. Whatever you say must have integrity". While you may be making judgments they have to be your best judgments, they are not designed to sandbag, they are not designed to make you feel a hero by always over-achieving or surely over time anyway that will be found out, as it were. The first thing is, I think, the sense that if somebody says something really it is the best they can do. In turn, therefore, the response from you has to be that you understand that, that you are not saying to them "I do not believe you", you say "I believe you". The second thing is to compare it with what they have done in the past. It is only if targets go down, less achievable over time, there surely must be a real explanation for this. Normally one would expect things to be the same or get better in a technologically driven enterprise like ours. Thirdly, go and compare with what other people do internally inside the company, get peers to talk to each other and say "Look, surely have you not thought about something better to do? Is this not the way to do it? Can you not achieve more" and then look at the competitors too, all very big companies and you can get data and compare yourselves with that company. Then you can see whether the target has the two levels. The first is what must be done, so that is the question of how the team itself, the resources of the team, its capability is working, as it were, under normal circumstances and, secondly, the level to which you can aspire, realistic but challenging. If it is to go to the moon then everyone will say "Well, that is fine" but that will not be practical.

332. Is that informally or is there a mechanism for that to happen within these groups?
(Lord Browne of Madingley) A lot of data is collected, highly rigorous data sets are made but data is data. Behaviour, judgment, people and leadership are something else. We rely on very rigorous data analysis but we do not run the company on autopilot, it is not as if you can do the analysis, plug in the numbers and then go away. It does not work like that because it is all about people, it is all about motivation, it is all about getting them to be creative, to look around corners. We start with the rigorous and then we combine it with how best should a business unit leader lead his or her team to something which is extraordinary, always making sure�always making sure�that however a target is specified there is enough room for people to create their own way of getting there. In our experience the more you prescribe in finer and finer detail the less the quality is because people, as human beings, need to have a way of seeing that there is a great way of doing something but it is theirs, it is not someone giving them orders to do it that way. That is where we depart from the rigorous and the detailed data driven through to what can be done actually.

333. You are looking for targets of some achievement, some achievable figure. You must be very suspicious of people who come and say to you "We can guarantee 15, 20, 25 per cent improvement in targets from your previous performance". What parameter would you like to see: 3, 5, 7 per cent improvement?
(Lord Browne of Madingley) Really it depends entirely. There are rules of thumb which are situation dependent where you can begin to say "Well, is this credible? Is this really credible?" Sometimes you can get great improvements because there will be a technology leap forward or you are putting so many resources into something the output very much depends on the inputs. Normally you would expect people to consider very carefully in their presentation to you what is the general trend of expected productivity improvement and what are the negatives which go against that. In financial terms you can get great productivity improvements by paying people nothing at all but then they will not do anything and they will not be very happy. You need to balance then productivity growth with wage growth. Managers have to be in a position to give you their consideration of why they are improving or why in a business, as is sometimes the case, they are actually degrading and there have to be very good reasons why, and you may be happy with that.

Mr Prentice

334. How do you keep on top of such a vast organisation? You tell us you have a rigorous reporting system, how do you have a sense of what is happening out there?
(Lord Browne of Madingley) Organisations are not one person. The most important thing is to have a team that is aware, understands, has delegated authorities and then can pick and choose the important things, the good balance which has to be looked at either by me or the team as a whole. We operate under a highly delegated mechanism. In BP the process is very simple. There are very rigorous rules, if you will, our internal law which is the way the board of directors delegates to me all and everything needed under certain limitations, very proscribed limitations, to enact the strategy and the plan of the firm. I am obligated as a member of the board to report to them very frequently on what is going on and if something is really exceptional immediately, so I do that. Then I take that general delegation and break it up into specific delegation right across the world and that gives you then the capability of expanding the reach of the firm well. If you do not have delegation in the end it is truly impossible to do.

335. You make it sound very easy.
(Lord Browne of Madingley) It is not.

336. No, I am sure it is not.
(Lord Browne of Madingley) Every delegation is not only a set of rules and regulations but is also a matter of discussion, behaviour, understanding and continuous attention.

337. Okay.
(Lord Browne of Madingley) Other than for violation of things which must be complied with, so there are the laws of the land wherever we are, there are certain inviolate standards that we have. Our breaches of delegation normally are accompanied not by dismissal and sanction but by learning and understanding because it is almost never wilful, reckless or deeply negligent, it is inadvertent. This is a continuous process of saying to people "Well, actually that one you need to attend to" and a lot of it is self-regulating.

338. I get the impression, you see, you are a colossally well paid business person running a very, very effective company, and I should imagine the people employed by BP are flexible, willing to change and it is not the work environment where there are lots of rigidities. I am just supposing. If something comes down from the top, a small number of targets, then most of the people in the company would do their best to deliver, I assume that is right. I am interested, also, in the management of change because you joined BP 30 years ago.
(Lord Browne of Madingley) Correct.

339. You have been in your present position since 1995.
(Lord Browne of Madingley) Correct.

340. There were eight layers of management previously and now there are two layers.

(Lord Browne of Madingley) A few more than that.

341. Two or three. Who am I to contradict you? How easy was it for you to strip out these layers of management down to the lean BP we have at the moment?
(Lord Browne of Madingley) The first thing I had were some great predecessors who started the slow journey to begin to change BP. The start is very, very important indeed. I think it was all about how to make the company more flexible, more responsive and more learning. You learned to take the best of whatever anyone had that we could see and then incorporate it and do things better. The world�it is a statement of the obvious, you have heard it again and again�moves very quickly so yesterday's way of doing things may be the wrong way and may simply strand you in an uncompetitive or irrelevant position. It was about understanding the world around us and being flexible and responsive enough to operate in that world without violating some key rigid things called the values of the firm, what we stand for actually. These do not change and they guide the judgment of flexible actions. You cannot be so pragmatic as to completely change everything every day because you are dealing with people and people need something. I know it is only a business but actually people in business want to believe and own something which at least they regard as more important than just making money. They have to have these values which limit whatever you can do, therefore. There are certain things you cannot abide.

342. I am interested in the extent to which you let go and allow the people on the ground to decide important policies. Let me take an example as someone who drives a car. The new BP logo, for example, which we see in petrol forecourts. I should imagine that would have been quite a big decision which you would have been involved in?
(Lord Browne of Madingley) That was a very big decision and it took two years to make.

343. That was your decision, was it?
(Lord Browne of Madingley) In the end, yes. I was involved with a lot of discussions. We had a large number of discussions inside the company, getting the best practice, best ideas from people locally. We wanted to make sure it made sense as much to our manager in Malaysia as it did to our manager in Illinois. We had to find something which made sense that they would be enthusiastic to do something with. As it went on we had eventually two choices, I will not tell you what the other one was because it has been consigned into the wastepaper basket, and eventually we had a big meeting where I concluded that on balance this was the one we were going to go for and then we worked up a plan. It was not something which was done in isolation, it is not an isolated decision. These things, again, are about building a team that is behind everything because it is all very well saying "Go to point A", that sounds like a very easy thing to do but we do actually have to have 100,000 people minimum plus all the contractors we employ. We estimate in the end we have to move half a million people, half a million people to a purpose. That cannot be done just by shouting orders or by making decisions which are free of context, free of explanation or free of deep meaning for people, human meaning. We have a style inside BP, it is the house style, which is quite rational to start with. What is the reason? Why are we doing this? What is the analysis? What are the numbers? Have we really done it? Then we go further and say what does it really mean to us.

344. One final question, I find that absolutely fascinating. Kelvin touched on this perhaps but to what extent would it make a difference in the public sector�whatever organisation we have been looking at�if we brought in people from the private sector and paid them a lot of money and if they did not deliver on the set targets then we would just get rid of them?
(Lord Browne of Madingley) It is a possibility. I think there are several practical things to consider, obviously, because people I do not think, especially if I may say so in the United Kingdom, sign up for jobs just for money. They do not do that, I do not think. I think they have to have a sense that what they are doing is relevant, purposeful, meaningful, respected by others and then, of course, they will make the judgment in the end about do they get rewarded for it but I think there are conditions precedent. The other thing which is important is when people take on jobs�and I see this inside BP�they do want a sense that they control their resources. It is quite important that they have degrees of freedom because in the end if there are no degrees of freedom then you have not employed a real decision maker, you have employed an administrator and they administrate, simply, what is a pre-defined outcome. That is a very different sort of person from a person who says "Give me resources. Give me an objective. Certainly give me lots of rules, very important. Give me the freedom to show you I can get there in a way which makes sense with my team". That is not administration, that is leadership and management.

Annette Brooke

345. If you were asked to advise on improving the delivery of public service, and perhaps you have been, what key areas would you choose to look at, do you think?
(Lord Browne of Madingley) Again, I am not qualified to comment on this. I believe that there are so many people involved in this that my voice would make very little difference.

346. I was trying to make that a very general question so you did not have a difficulty.
(Lord Browne of Madingley) In a very general sense I would say it is very important to lead people as well as to measure targets. It is very important to get them really believing that what they are doing is good, that people respect it, that they are given dignity, that they understand in reality the constraints. I do not think most people go around in a world which is detached from reality, I think most people have a real grasp of reality and understand what can and cannot be done and to have everyone in the team focused in this way so that they have a purpose and that they think about the team as one where everyone is contributing to the end product. I think that is important, to think of targets, whatever they are, set within a context of why are these things happening, how do they fit with everything, the purpose of whatever service is being delivered.

347. Targets are definitely there?
(Lord Browne of Madingley) Targets only within context. I can explain it more. They are part of something, they are not by themselves. I come back to our own experience. The danger of having a target taken out of context is to create an immediate misunderstanding and failure potentially of what you are trying to do. In our case we had one of our particular targets probably taken out of context. I always say we could have done better to make sure it was not but maybe we could, maybe we could not, I do not know. I can say that we have learnt, and that we will not let it happen again. Context is important, how everything fits together, where the purpose is and why these are important. Treat them as a compass because they will not all be met and do not emphasise one against the other when clearly it creates an adverse outcome or puts the people�worst of all perhaps�who are achieving these targets in a position of moral hazard where they know very well that they could achieve the target but equally they know very well by achieving it they have done the wrong thing. Targets can be achieved but in the wrong way. Do not do that, so therefore make the targets fair and reasonable, make them fair and reasonably balanced and make sure they are owned, most of all, deeply owned by the people who are asked to discharge them. This is very important. You cannot impose targets by fiat.

348. Very quickly taking you up on that, if government sets the target then obviously it has to be negotiated one way or another all the way down, so the ownership is lost in a sense with a centralised target. In BP are there centralised targets which go right down to the individual work force and units?
(Lord Browne of Madingley) They actually come round the other way. For the purposes of ease of understanding some component targets are assembled upwards, not the other way round. We look to see what is possible by an analysis team by team, how capable the team is, what their historical track record has been, how well competitors do, how well similar teams in BP are doing, what they can do with the resources which are given to them and then build a target and then add them up and that gives you then the overall shorthand target for the firm as a whole. That target is immediately owned by the one underneath it. What is very dangerous is if the target at the top is not owned by those who have to do it and, further, they cannot identify their own contribution to the bigger target. Everybody has to own and understand a piece of the greater whole otherwise it is very unclear to them what on earth has happened.

Mr Heyes

349. We have heard in the press recently about the allegations of fairly widespread cheating to produce the right test results in schools, the suggestion being perhaps that education is motivated by fear and a wish to achieve the targets which have been set for them through these tests. The financial press, whilst they have said some really nice things about you, calling you universally admired and talking about consummate skill, were extremely cruel in the things they said about your recent failure to achieve your targets. Speculation included that the pressure on your managers was too intense, that they were afraid to give you numbers which you might not find congenial. I think perhaps you will see that in the parallel of those two cases we might be able to learn something for our Public Services Inquiry. How did you test whether those cruel allegations were true or not? Did you just dismiss them?
(Lord Browne of Madingley) No.

350. How did you test them out?
(Lord Browne of Madingley) Firstly I would say I do not believe them to be right and I think the analogies were drawn in the wrong way between different circumstances. But whenever there is at least the slightest concern this is happening, from me or any one of my senior team, then we have to go and test it out. I will tell you why. Because what is very important is people have to understand that to behave with integrity and ethics and fail to meet a target is better than meeting a target and not behaving with integrity and ethics. That has to be the way, absolutely, it is okay to fail, it is good to fail if you have done it in the right way and the only way you can succeed is to do it in the wrong way. The moment you open up that door, you open up the door of moral hazard. Where people have to take a decision which is adverse and wrong compared with their standards of integrity or ethics or the corporate standards for that, their personal standards or professional standards, then you have opened the floodgates for making things impossible. We have gone down to the lowest units in each part of the company and asked them to re-establish their base line and target and we have tested it, we have peer reviewed it, checked it, I have participated personally in a tremendous amount of it, to make sure the information is absolutely pure and is not distorted in any way by trying to put a favourable light on something.

351. Let me press you on it. How did you do that? I accept your assurance that you have done it to your satisfaction. What things did you do to satisfy yourself that people reporting back to you were not the same people being accused of withholding uncongenial information?
(Lord Browne of Madingley) With their agreement. With their agreement, right down to the bottom of the organisation in one go. We went from effectively the top to the bottom with the agreement of the middle to say "Step to one side for the moment, we are going to look to see what is happening". That takes a bit of time to get it set in the right way, I think, otherwise you have some very disenfranchised people but it is an important thing to do once in a while anyway so you can see what the lowest level executive manager is thinking and is doing. You cannot just ask an open ended question, you have to ask a specific question. You have to say "Please tell me what you think you can do based on no improvement from where you are at the moment. Please explain how it fits with your track record. Please explain how it fitted with your last forecast. Please explain whether there was a change in the resources given to your unit. What further resources might you need?" Then after you have gone through all these questions you ask "Are there any other things you would like to say as well?" Then you ask them to sign a piece of paper because it is important they stand there and say "This is my opinion, not anybody else's. I have not been messed around with or pressured, this is what I think". Then you can see with clarity what the issues are, if any, you can assemble again the basis to go forward. You have to do this, I believe, with every organisation anyway once in a while because people are people. There are always slight changes in behaviour and it is always best to go back and reproof, if you will, what it is you are relying upon.

352. The teaching profession say that this kind of external criticism, negative press comments about cheating to get the right results and so on is extremely demotivating. You have been on the receiving end of it recently, how did it affect your motivation?
(Lord Browne of Madingley) Not at all. Not at all. I am very clear that in my role as the head of the company I have the responsibility to my team. I have taken the view always that part of the territory I cover is to take the criticism and not to let it affect anyone inside the company. I have a responsibility to do that and I do that and then we carry on and get going and go to where we have to go with a lot of spirit and a lot of energy. That is part of the job, I think. Part of the job is to take the rough and the smooth.

Chairman

353. I could see the financial press and the share price wobbling when you answered that question: "BP boss says he demotivates".
(Lord Browne of Madingley) That is why I answered it twice, just to make sure.

Mr Heyes: I have no BP shares yet.

Chairman

354. Can I just ask you this. It is well known that New Labour folk go weak at the knees when they get in the presence of a successful business person, they think instinctively that somehow these people can tell them how to run things. Have you been asked to advise on how to run government?
(Lord Browne of Madingley) No, I have not.

355. Not at all.
(Lord Browne of Madingley) No. I have not been involved in these task forces. Chairman, I have a full time job. To come back to the answer I gave to Sir Sydney a moment ago, my prime responsibility is as an employee of BP doing all and everything under the board's guidance to get BP to be a great company and to stay that. My time is highly limited and I believe, also, as I have made the point again and again in this Committee, that I am a specialist not a generalist. I am a specialist. I know a lot about BP, I think that is a pretty reasonable thing to say. I am a specialist in business and the issue is for me always saying "But what I know may be completely irrelevant to what anybody else wants to know" and I think that is where I stand saying "I am a specialist and this is what I do for a job".

356. When I see your description of how BP works and this model of having performance contracts that are made in these business units and then the division of those into a number of performance units, all headed by a performance leader, do you not sometimes think "if only I can get my hands on the machinery of government I could soon sort that out"?
(Lord Browne of Madingley) No. Had I wanted to do this I am sure I would have made a career choice some time ago.

357. You have joined the legislature, have you not?
(Lord Browne of Madingley) I have indeed. I have just answered this question to Sir Sydney saying that I do not spend enough time there, not because I do not want to but simply events overtake it. I hope, one day, to do that. I think it is a rather different position than the question you have asked.

358. I am almost done but I am interested in your paper to us where you talk about the need to employ targets in what you say is a spirit of humility and then you talk about what the difference may be with the political world where these targets have a different significance and so on. When I had to leave I was in the Chamber and I was hearing calls from the Opposition, or invitations, to an Education Minister to resign if certain targets that had been announced are not met, and we have just had an Education Minister who resigned, at least in part, because targets were not met. Bearing in mind what you said in your paper, does this strike you as daft?
(Lord Browne of Madingley) Again, I think generality is probably not helpful. It seems to me that it is all about circumstances and the specifics of circumstances. I think that as the head of any organisation, enterprise, unit, by definition you have a responsibility about that unit or enterprise because you are delegated authorities, from the board in my case, to make things work appropriately. You obviously discuss and agree with your supervisory board, as I do in great detail what it is we do, but the real question, I suppose, is whether you have been reckless and negligent or whether you have been well meaning and overtaken by events.

359. But you said just a moment ago that sometimes it is good to fail. Can you imagine politicians getting up in the House of Commons and saying to the House, "Well, yes, we did not do it but it is good to fail"?
(Lord Browne of Madingley) I am sure, Chairman, in modern times it is a very difficult thing to say in what you might call an open debate. As a matter of thinking about what one should do, I do actually think that learning from failure is much more powerful than learning from success, much more vivid. I think if we can almost keep it private and say "that is what we really think privately" rather than take it to a public debate, I do think it is more genuine than learning from success.

360. That is a very nice note to end on. Is there anything that we have not asked you that you feel you could usefully say to us?
(Lord Browne of Madingley) Indeed not.

361. In that case, that is precisely the moment to end. We are extremely glad you have come. We wanted to test some of the discussions we have been having with people from the public services against someone from business who knew what they were talking about and you have performed that role for us admirably. We are very grateful to you for giving your time.
(Lord Browne of Madingley) I am delighted to have been of some help. Thank you very much.

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PROFESSOR TIM BRIGHOUSE, MR DAVID BUTLER, DR GILL MORGAN AND MR MIKE NEWELL

THURSDAY 5 DECEMBER 2002

Chairman

362. May I call the Committee to order and welcome our witnesses this morning? It is very kind of you to come along. It may seem mysterious. What unites people concerned with the health service with schools and with prisons? From our point of view what unites you is that you are all grappling one way and another with a regime of targets and league tables and so on and that is the subject of our inquiry. We are particularly delighted to welcome Professor Tim Brighouse, David Butler, Dr Gill Morgan and Mike Newell to help us with this inquiry and to do it in this cross departmental way. I do not know quite how we are going to do this, but Tim you have a few words to start with and if other people have too, perhaps reasonably briefly, you could get us going.

(Professor Brighouse) Thank you very much. I shall own up to being, I think, the person who introduced the notion of target setting into education. It originated in 1992 when Birmingham City Council decided to have an external inquiry into the state of their education and Professor Ted Wragg from Exeter did the inquiry during 1993 when I was also simultaneously being appointed as Education Officer. The outcome of that report called Aiming Higher, which it might be worth getting a copy of, referred to the fact that if we were going to get some momentum into changing the atmosphere in a heavily industrialised city from "What more can you expect from children with backgrounds like this?" on the one hand in the school and "Just keep your nose clean and there is a job", or by then there was not a job, and "Education never did me any good" in the home, what we needed to do was get some impetus. We believed that the best sort of teachers actually deploy formative assessment. Therefore when a teacher is with a youngster, the youngster has to own their map of learning and would know with the best teacher, what they have to do in order to acquire the next bit of information, develop the next stage of their skill, get closer to conceptual understanding and that a really good teacher shares that map of learning with the youngster. In a sense a youngster in their learning would have targets of where they needed to go to. We thought that if you put those together from the bottom up, you could set targets of expectation and if there was wide ownership of that you might change the climate into believing that education was an important thing. Do not forget I am right back now in 1992-93 when that was not quite regarded as so important as it is now. What we did was to create, to give you a simple illustration, something called a primary guarantee and it had targets of input, targets of experience and targets of output. Targets of input were the City Council committing itself to give real terms increase in money for five years. Secondly we as servicers of the schools would target to improve our own performance in terms of their satisfaction with it. Thirdly, we would have targets to bring in external advisers which were national and international. Then there were targets of experience. Everybody would try to provide some experience. I shall not go through what they were. Then there were targets of outcome and we thought that as a platform around literacy and numeracy, if you do not get that right by the time children go into adolescence then you are in trouble. Therefore there were targets of improvements in terms of literacy, particularly reading at that stage, and numeracy, because you could test them, that was prior to the publication of the results. That is how we created it. The school was set the targets collectively, it took some persuading. We published them bottom up as millennium targets and there are various published articles about that. By 1996 I was receiving visits from the then Permanent Secretary, Sir Michael Bichard, who perhaps was sensing that something might change and that it was possible that I was having some influence over the educational policies which might start to obtain should there be any change of direction. His view was that you would never be able to set targets from the top down, which is an interesting proposition because within one and a half years we were setting targets from the top down. Targets coming from the bottom up have quite a good momentum and they need people to decide what they need to do in order to enable them to meet those targets. If, however, the targets come from the top down, it is very hard to see where you get the information which would make those targets seem real to the people who are deploying them. That is what we have moved to, coupled with accountability. People do not feel an ownership of targets which are too many and are top down. The way we approached targets, people felt an ownership of them.

363. Could we pause there and bring others in? I do not want to lose that starting point if we can for a moment. Tell me in precise terms what a bottom-up target is.
(Professor Brighouse) A bottom-up target in education is when the pupils are working with the teachers and the teachers themselves are saying they achieved this last year with a group of youngsters so they will set themselves a target of achieving rather more with the next group of youngsters coming through. If you collect them up, you would get a target for the whole authority, indeed you could get one for the whole country.

364. This is interesting so I just want to be clear I understand what you are saying. Each individual school sets its own target.
(Professor Brighouse) Yes.

365. Who validates that target in terms of a strategy for the school.
(Professor Brighouse) Dead easy for me: I simply said to the schools that we must improve on our previous best and that was the challenge at that time because people thought that it always had to be like this. That is one of the things you have to tackle in education. When you meet somebody and they say "You know how it is", I say, "No, I don't know how it is. Explain to me why it should be like that, because surely we can achieve more". I invited the schools to set modest targets and ambitious targets. I told them I did not mind where they got to. I told them simply to go for the modest ones and then go for ambitious ones where, if they had a fair wind or brought in extra resources and targeting, they might get there and out of that would come a momentum for improvement and that is the vital thing in education.

366. So if a school does this and it comes up with a target which you think is first of all too modest or insufficiently ambitious . . .
(Professor Brighouse) I would go along and talk to them.

367. Whose target would prevail?
(Professor Brighouse) Frankly, if I imposed a target which they did not own, I would be wasting my time, totally wasting my time. If I could persuade them . . .. I was in some schools yesterday actually doing just that, spending a lot of time trying to persuade people that it did not have to be like that, had they actually looked at so and so, had they seen so and so? You are trying to energise but not simply energise from hoorah, hoorah, but energise by helping them to see other people's practice and when they see other people's practice there is no stopping them. They then want to move forward.

368. Sir Michael Bichard came to give evidence to us a couple of weeks ago and he was really saying that there are too many targets and they need to be wholly outcome targets and not process targets. He also said that he thought the exception to that rule was in relation to literacy and numeracy. Indeed when David Hart came here a few weeks ago to give evidence on the same inquiry, he said that he thought the Big Bang approach to literacy and numeracy was dead right because things were in such a state that unless the centre had moved in in a big way and set these targets for every school in the land, it would not have jacked up the system in a fundamental way. Does that not rather tell against the bottom-up approach?
(Professor Brighouse) All I can simply say is that we pushed our approach and were improving at a rate faster than the national average. I absolutely accept that in the approach I took, there probably would have been 20 to 30 per cent of schools who ignored what we were doing. By the top-down approach, you galvanise those people into doing it. The disadvantage with everything which is top down is that you burn out the energy of the inventive and creative at the top of the range because they simply resent and know very well that those targets are inappropriate for those circumstances and at best you hope that they will be lovingly disobedient, that they will simply go through the motions and carry on doing what they believe to be right.

369. Maybe it is getting the mixture of top down and bottom up which is tricky.
(Professor Brighouse) It could be.

370. Would the others like to come in or indeed say something independently?

(Dr Morgan) I am Gill Morgan. I represent the NHS Confederation which represents about 90 per cent of NHS organisations in England, Scotland, Wales and Northern Ireland. What I talk about comes from every branch of the profession. Our views would be very similar to Professor Brighouse's in that the best targets are the targets which are used by managers at a local level, agreed with staff, to ratchet up and improve their own performance. The reason for that is that in any professional organisation�and the NHS has a large number of professionals�professionals really want to do better. They do not go to work in the morning thinking they are going to do a bad job, they actually go wanting to improve. If you can harness that energy and creativity, you can drive improvement far more rapidly than anything else. Our view is very clear. You have to have some top-down targets; there are political imperatives, particularly for a service like ours where we use a very large amount of public resources. That is perfectly appropriate but that is not where you are going to get the next generation of changes, it is not where you are going to deliver across the myriad of services. That is where you have to harness the local energy. The most effective targets which produce change are because a local community identifies that they are not doing as well as they might. That can be very different. In some places you are not doing very well because it is very hard to do very well. In other places it is very easy to hit any national target because it is just easy to hit any national target because you have an affluent, healthy population. My view is that you do not want those communities and those hospitals to set up a national target and just aim for that because that is fairly easy to achieve and it does not continue to ratchet up and improve the service on a continuous basis. Our view is that you need a small number of top targets; the closer they are to outcome targets the better, the more discretion they leave then for local people to set the measures which are really important for them to measure as they go along to achieve the outcomes they need to achieve for their population. That is then sensitive to the local characteristics of the population they serve. If you look across the country, every place is different. That is not an excuse, but every place is different. Inner city London compared with Devon, where I used to work: they are phenomenally different. You can still aim to achieve improvement, but you might go about it in completely different ways and you might actually engage staff in completely different ways. Top-down targets tend to get into the process and assume that how you do things looks the same in two places, which it does not.

371. Thank you for that. We shall want to come back to some of that shortly. Mike Newell, do you want to come in?
(Mr Newell) Mike Newell, President of the Prison Governors' Association. I represent 1,100 senior managers including the governing governors of all our prisons in England and Wales, except those in the private sector. I would share the views in relation to the mixture between political imperative and the things which have to be pressed upon the service to happen because that is what is required. In some cases there may well have been previous resistance and that is a very good argument that you have to have top-down targets on that basis. We are slightly different in our concerns which are around targets and how they are used. Our concern would be that whilst there is a prison service which is seen at the centre as homogeneous, actually we have 140 establishments ranging from high security prisons to open prisons and everything in between and a funding history which means that all those establishments started from different bases. The way that targets are often put together is an assumption that everybody needs to improve on the same thing at the same time rather than really targeted approach to delivery of performance. In the prison service there is a general feeling that we do not target very well to the actual circumstances surrounding any particular prison at a time.

372. That is very useful. Thank you for that. Mr Butler?
(Mr Butler) Yes, Chairman, and thank you for your welcome. My name is David Butler, I am the Director of the National Confederation of Parent Teacher Associations. We are an umbrella charity for parent teacher associations throughout the country. In our present state we have some 12,500 member associations. We are very pleased to have the opportunity to support the work of the Committee today. We all accept that targets exist and targets are here to stay. They are one way of demonstrating accountability and such accountability is valid, however they are not the whole and therefore their use does need to be addressed cautiously. In terms of a parental perspective on those targets, then we want to see a situation which is useful and assists parents and their children overall with the development of their education. Our concern would be that a plethora of testing and the development of a mountain of national statistics is not necessarily helpful. In the context we are discussing at the moment, our view is that it would be useful and very valid to have centrally set strategic targets but to leave the development of operational targets to a local or regional level.

373. May I just see whether I can get an argument going between you and Professor Brighouse? If you speak for parents, do parents not have a right to see published information about schools, even if teachers do not want to provide it?
(Mr Butler) Yes, absolutely, but let us hope that published information is useful and is accurate. There is concern that sometimes there is a concentration on certain aspects; there is currently a concentration on numeracy and literacy and academic targets generally. What about some of the other issues, some of the humanities, the arts, the drama, the music, which do not always feature in those targets and which may be important to some parents?

374. Let me just see whether I can get the argument going. My reading of Professor Brighouse is, looking at these words you have used about league tables, frustrating, soul destroying, is that not a teacher-centred view of these things, rather different from a parent-centred view of these things?
(Professor Brighouse) The interplay which affects all our lives increasingly is the impact which the media has on the publication of that information. The publication of that information both for parents to know the performance of the school and for schools to know where best to look in terms of finding the practice which used in a very discriminating way would help them improve their practice, obviously the data is crucially important for both those things. Unfortunately where it goes slightly astray and has a counter impact is when the hype�sorry to use such a word�the insistence of the media, actually creates simple, bland headlines�bland is probably not the right word either�very strong headlines which affect the discourse and affect the discourse unhelpfully. I do not know what you do about that. I really do not. In Oxfordshire, where I worked in the late 1970s, we did publish the information but not in league table form and the local papers did not publish it in the league table and everybody found it extremely useful and it was a spur to improvement. Unfortunately by the time we got to the very late 1980s and they were published, they had become a very simplistic thing leading to all sorts of neglect of other aspects of schooling, which you were implying and even cheating. It does lead to abuse.

375. Yes, we explored the cheating issue with some of the other witnesses. You seem to be saying that you are not against publishing things, albeit in league table form, if only the media would behave properly in relation to it and if the data were good data. Is that the line?
(Professor Brighouse) Yes. I do think that anybody who wants to improve needs to know where the leading edge of practice is and that is finding information about schools in comparable circumstances from the schools' point of view, but actually knowing that and going and visiting and improving. Unless that information is readily available, you cannot do it, so the information does need to be available. What we have is a dilemma that there is a competing good here and that good leads through the media to something which is not quite so good.

376. Does value added help to solve this problem?
(Professor Brighouse) Yes, value added could be extremely helpful. Unfortunately the way it is going to be published this year is counter-productive. To give you an illustration, they are going to publish the results of improvements from Key Stage 3 to Key Stage 4. Already schools have depressed their results of Key Stage 3 in order to make sure their improvement at Key Stage 4 is better. Had we waited a couple of years, or in authorities which bother to get their data together, we could have done it from Key Stage 2 so the school could not affect the performance at Key Stage 2. If you shove in socio-economic factors you can know exactly where you are. We knew in Birmingham those schools in four quadrants with the top axis, the vertical axis, being a rate of improvement and the horizontal axis being points per pupil. The group on the low points per pupil and low rate of improvement we called "Not waving but drowning". The ones who were low points per pupil but high rate of improvement we called "Heads above the water". The ones who were in the quadrant with high rates of improvement and high points per pupil were "Walking on water". The ones in the other quadrant were "Treading water". You may laugh about that but it is a very, very, very powerful management tool, because those schools which over a four-year period were perpetually in that quadrant at the bottom, helped us focus attention and them to focus attention on schools in socio-economically similar circumstances who were making the rate of improvement. Without that data you cannot improve.

377. That sounds to me very similar to the terms which are being used in the local government assessment at the moment for local authorities and the star system. No? Tell us why not.
(Dr Morgan) The problem with something like a star system is, if you look at a hospital, a hospital is not an entity, it has a whole range of different departments. What patients and what users want to know is what department they are going to use, whether that is a good department. If you are a pregnant woman you want to know about the quality of maternity services in that particular hospital. What you have when you move to a star system is some very high level indicators which are usually about the measurable. You count them because you can measure them, not for any other reason, then you amalgamate it to a single hospital. It may tell you that hospital is well run, but it does not tell you about which bits of that hospital you would have trust in as a user and which bits you should have concern about. I think the issue is about how you give meaningful information to people so they can make true choices. There is an alternative way of looking at the health service which is being done by a company called Dr Foster, which was at first greatly disliked by the NHS. They started off trying to do exactly the same, trying to come up with an alternative star version, a real star as opposed to any other star. They were about giving information to the public in a commercial way. What they found was that it was too gross a measure to tell people. What they have moved to is beginning to look on the service by service basis about hospitals not trying to give an amalgamation of scores but to give some very meaningful information to patients and about value added. What they try to look at is what you would expect in this hospital if it were performing averagely and whether it does better or worse than that and there are statistical measures in that. If you have a hospital in their scores which comes out well, you know you are getting a better service than you could expect from an average hospital and the hospital is doing something in that service which is over and above what you would get from other places. That seems to me the kernel of what I would want if I were using that service for myself and my family. The problem with star systems when they are released is that you then have communities who believe it means their hospital is bad. They are not bad, they have excellence going on in them, it is just the star system is too diffuse to pick up the clinical excellence which is actually what the health service is about.

378. That is very helpful. So that is an argument for better data and better league tables.
(Dr Morgan) It is an argument for trying to understand what would be useful to the people who use the service. We do not often start at that end of the process.

Mr Liddell-Grainger

379. Dr Bogle said that there were 400 targets in the NHS alone. Are there too many targets and can you give me an example of some bad targets?
(Dr Morgan) Yes, there are too many targets because they divert local attention from what is important locally. I can give you a target which is both good and bad because that is actually the reality. One of the targets we have to collect at the moment is the number of cancer patients who are seen within two weeks. That is a good target because it is very clear, it is very simple to measure, it is from the point the patient sees the GP to the point they are seen in a hospital. The problem is that it takes part of a complex system, because what the patient is actually interested in is not being seen by a consultant, it is the point they have the definitive treatment which is either going to cure them, take the pain away or whatever. By focusing on the two-week wait, which is what the service does, because it responds appropriately to the target, what is actually happening is that you have patients who are going to see a consultant, are told they have a cancer, but then have to wait for the rest of the system to get into gear in terms of the radiotherapy, the oncology. A much more appropriate target would then be something like from the time you see the GP to the time you are treated because that would help managers focus on the whole of the patient process and not a tiny little bit. That is both a good target, because it is measurable, it is clear, it has a time limit to it, and a very bad target because it distorts the way the service works. The people who come out worst are the patients who have a diagnosis but have to wait longer for treatment.

380. Do you think that people are fiddling their targets in the NHS?
(Dr Morgan) You will know that a survey suggested one in 12 managers had fiddled the targets.

381. Do you think?
(Dr Morgan) I think it happens very occasionally. The biggest problem with targets is that we know that if you are collecting information you personally are going to use, information gets to be good. If you are collecting information to go into a black box somewhere else which you never actually, as the person collecting it, see any benefit for, we know that information becomes inaccurate.

382. Do you think it will damage the credibility of the NHS if the people are fiddling targets up to 12 per cent?
(Dr Morgan) I do not believe it is that high.

383. What do you think it is?
(Dr Morgan) Occasional, sporadic.

384. What does that mean, one per trust?
(Dr Morgan) No, no, no. Maybe three or four cases a year nationally, that sort of level. It will happen and it will happen if people are afraid for themselves, for their jobs and organisations like that. It is human behaviour.

Chairman

385. It was the Audit Commission, was it not? Does that mean you do not accept what the Audit Commission found?
(Dr Morgan) No, it was not the Audit Commission. The report which had a numerical figure of managers was done by the BBC and the Institute of Health Care Management. It was a very small survey which had a very small response rate. It would be biased towards people who report that they had a problem, rather than being representative.

Mr Liddell-Grainger

386. There is more money going into the NHS and that is fine.
(Dr Morgan) Yes.

387. Do you think that because targeting is going to become the all-encompassing ideal of government�and that is fine that is a government decision�people are going to be so pressurised, they are going to have to do something about cancer, that if they start slipping they will fiddle the figures? Do you think it is going to become endemic?
(Dr Morgan) I think fiddling is completely unacceptable.

388. That is not the question.
(Dr Morgan) I do not think it happens systematically. It is a very rare event that people systematically fiddle. What they do and what happens is that people game the system, which is subtly different. The reason they do that is if you have a target which is woolly, because a good target has to be really specific and very tight. Take a target like waiting time in A&E on a trolley. When do you start the clock? You have to have a very clear definition from place to place of the point at which you start the clock. What people will do is start at different times, depending on how the organisation works and the systems in place. That is not fiddling the target, it is just playing the target. It is gaming. That is one problem, but the biggest problem is whether the information collected is as accurate as it should be.

389. The reason I am asking you is that if the targets are fiddled people could die. It is unlikely that they are going to in the other three services. The concern is if pressure is brought more and more from central government on this. What I am trying to tease out of you is whether it is going to make it almost too impossible not to. You are right in what you say: when do you start the clock, when do you stop the clock?
(Dr Morgan) You are making an assumption there that the targets are related to whether people have a good outcome in the health service or not.

390. I think I am.
(Dr Morgan) Certainly most clinicians and most managers would argue that most targets do not impact on the quality of patient care and that patients do not die. They may have a worse experience for part of the time but you are not actually fiddling things which damage people. It is not that sort of problem.

391. I am not sure the Ombudsman would agree, but fair enough.
(Professor Brighouse) It seems to me that there are two important factors here. One is: does it bring out people who lack probity. It seems to me that in any walk of life there appear to be people where what they say and what they do and who they are do not match properly. We have seen lots of that in the private sector and we have seen some of it in the public sector. In the sense that if you link target setting to people's personal reward, take Enron as an example, then you have problems and it could well be that by linking pay too closely to targets or the welfare and future of an institution, you have problems. That is number one. The second issue, which we must not lose sight of, is that some of the targets have a perverse impact and that is much more important than the first element, that is you can aim for a particular target and by everybody focusing on that target�the obvious thing is the cut-off point at grades A-C in GCSE for us�that leads people to say they will go at the people on the borderline because we need to get it up, because this is high stakes for us. That leads to them ignoring the needs of other youngsters. Or you set a target such as reducing the number of excluded children and lo and behold suddenly three years later people are suddenly saying they should have revised that to increase the number. Are you with me? There are all sorts of perversities in some of the targets.

Chairman

392. Any more examples of that kind which any of you can furnish, we should be grateful to have.
(Mr Butler) I would extend that point. I understand that the Committee is genuinely concerned about the issue of cheating, and rightly so, but there is also the issue of what I would describe as over-emphasis. In an educational context, are we having a situation which is teaching to test or teaching to learn? I should like to hope that we are teaching to learn.

393. This is distortion not cheating.
(Mr Butler) Absolutely. We have a situation where schools have to go through their Key Stage tests and the SATS tests and there is huge emphasis and huge concentration at that point. Are other things being lost? That is the danger. Related to this is the issue of whether we are creating an excitement which is inappropriate? By this, let me refer to the contest of admissions processes for secondary schools. We have performance tables, we have league tables which parents can look at quite rightly to make an informed choice for their children, but does that choice really exist? Yes, they are allowed to express a parental preference, but the reality of many, many situations is that it is actually Hobson's choice. It is not just in education. If we move over to the health service, we see league tables with examples of what the media would tell us are places we would want to be and places to go if we want to die. Yet how can many, many people actually influence that choice?

  394. Gill, were you going to give us another perverse consequence?
  (Dr Morgan) Give me two seconds and I shall think of another one for you.
  (Mr Newell) I shall give you some problems with targets. When you talk about cheating, some of them are just about inaction. We have a target in relation to safer prisons, which would be about assaults in prisons and would be based on the number of proven adjudications for assaults on prisoners. If you do nothing actively to solve and investigate assaults which take place, then you reduce the level of assaults because we do not actually measure the number of assaults, including violent incidents, within establishments. We have a number of targets like that. What we design the target to do does not in any way match that at the operational level, therefore an operational manager, if they wanted to pursue it properly, as they should do, is actually going to damage himself. The more assaults you solve in your establishment, the more you will be punished by having a higher assault rate. Those sorts of targets just do not make sense and we have a few of those around.

Mr Lyons

395. On the subject of performance indicators, I was looking through a list of our prisons. Is suicide included in the list of performance indicators?
(Mr Newell) No, it is not.

396. Why not?
(Mr Newell) It would be wholly inappropriate to have targets. I would find something immoral�and I think all my colleagues would�about having targets in relation to suicide.

  397. So it is okay if everybody commits suicide because the performance indicators are okay. Is that what you are saying?
  (Mr Newell) Where people commit suicide and the establishments and circumstances in which people commit suicide are all thoroughly investigated to a very high level of consciousness about that as a problem within the service which we are tackling. Targets would not help. In fact targets would be soul-destroying for people.
  (Dr Morgan) It is more complicated than that because the health service has a target to reduce suicides which includes everybody living in a geographical area and it would include prisons in that geographical area. The health service is measured against a target of reducing suicides, particularly in young men.

398. So my local trust should be well down the league with Cornton Vale prison where women commit suicide on a regular basis unfortunately.
(Dr Morgan) Yes.

399. But it is not something for the prison to take up.
(Mr Newell) We would not gain anything from it. It is a high profile area where everybody is aware. The director general of the prison service has made it quite clear that it is his number one priority. A very large number of resources are devoted locally in establishments to delivering that, but despite those efforts suicide takes place and the numbers have gone up this year but equally the prison population and overcrowding issues have contributed to that.

400. What do prison governors have to say about women who are in prison for failing to pay fines?
(Mr Newell) We have a quite clear position: they should not be in prison.

401. They should not be in at all.
(Mr Newell) No.

402. How do you develop that with the government, with the authorities?
(Mr Newell) It is about the purpose of imprisonment, what we are out to achieve in prison, why we are sending people to prison. In many minor, low level crime areas we are likely to cause more damage by sending those people to prison, particularly in relation to women and the family. We need to find better and more appropriate ways of dealing with people who commit the level of crime which is attracting a fine and then resulting in a non-payment process.

403. May I go back to the question of fiddling the figures? A consultant who fiddles something will end up at the BMA. A nurse who fiddles will end up with the UKCC, but nothing happens to managers who fiddle.
(Dr Morgan) If you look at the National Audit Office inquiry about what happens to managers, most of them get sacked. That is the reality because it is quite unacceptable to cheat systematically on the figures. That is not acceptable behaviour. I can let you have the summary which came out from the National Audit Office, where they looked at 10 places since 1996, some significant time. In only two places did the individual stay in post and in both those cases they were very junior people who were not able to manage the system at all. The routine is that people are dismissed. There is now a code of conduct for managers which makes it quite clear that systematically cheating on anything is summary dismissal and I should expect nothing else.

404. How do you give support to the managers in these very poor performing trusts who have their management put out to bid or however it is done?
(Dr Morgan) The NHS is very managed, every tier reports to another tier and there is a fair degree of performance management. I have a view that if the performance management system, which is really based on targets, is not picking up problems before they happen, then it is not doing its business. To spot the people who have their heads below water ought to be the purpose of performance management and to intervene. We have not yet reached that stage in the NHS, where we are able to spot things early and intervene early, so we do tend to have a really knee-jerk reaction when organisations are seen to fail. There are several ways organisations can be supported and there is a very large programme going on through the Modernisation Agency, which is helping organisations do what is really important, which is diagnose their own problems, because that is the strongest thing. It is when you know you are not doing it well and somebody works alongside you to help identify what you are not doing as well and then has access to people in other places who tackle those problems. These are not simple problems. If they were simple they would have been solved. They are often quite complex to solve. The Modernisation Agency helps organisations both diagnose and then puts people into an individual organisation to work on specific programmes. For example, the Modernisation Agency has a very active programme around booked admissions. How do you get away from keeping people waiting on a list where they do not know what is happening to them, to knowing at the point you leave your outpatient appointment when you are coming in to have your treatment. The Modernisation Agency will put people into organisations to work alongside and transfer their skills to the managers who will be doing it in future.

405. Is the present culture and climate conducive to self-criticism in terms of a trust?
(Dr Morgan) There are two answers to that. The present climate is always conducive to self-criticism. What is not conducive is always sharing that self-criticism with others which is different. My hypothesis, and there is lots of research evidence around it, is that the most important thing you ever do to improve is to compare yourself with someone, to use data and to want to improve. Perversely, the anxiety about that information being in the public domain, may stimulate people to improve and do the diagnosis within their own organisations. Organisations themselves are generally very self-critical and look for ways to improve. You have to remember as well that often things which are worst in organisations, where managers and clinicians would want to spend their time, may not be the areas which are actually targeted by national priorities because your own local circumstances will be different from place to place. Sometimes having to deliver the national priorities may detract attention from the things which would make the biggest difference to patients at a local level.

Chairman

406. Just to pick up on the suicide point and complete the circle here, you would think that a prison which had very high suicide rates, on the Brighouse model of bottom-up targets, would want to set a target for itself to reduce its suicide rate, would you not?
(Mr Newell) It does set that target but not in the sense of a KPI and KPT. We are all setting that target. The service has a target. If you looked at my own business plan, the number one priority in that business plan is to reduce suicides and acts of self harm. That is not a target where I am going to have three, I must not have more than three. To me that is quite frightening. That is putting a price on it. I can say I have done well if I have two.

407. Yes, but you would want to be moving in the right direction.
(Mr Newell) Absolutely. Everything which is written in the service does that.

Mr Heyes

408. I have been looking at the common themes between the things you have been saying. Professor Brighouse was saying that frontline people need to feel ownership of a target and Dr Morgan said local level targets agreed with local staff and professionals were what we needed. David Butler talked about a few centrally set strategic targets but that locally set targets was where the emphasis should be. I wonder whether in this common theme maybe what you are saying is really that you should trust us more with professionals at the front end. Professor Brighouse started by talking about the situation in Birmingham 10 years ago characterised by a lack of aspiration and ambition for local children. I would suggest that might have been, at least in part, due to a failing of professionalism over the years. It is a long-winded approach, but the question is: are you not really all just arguing for a return to the discredited approach of the past and saying "Trust us. It'll be okay this time"?
(Professor Brighouse) I do not think the logic of that quite holds up. I am not arguing that there should not be inspection and accountability at all. I am just arguing that bottom-up will bring more energy. If it is all top-down, you will shrivel up people's energy and the stakes are so high that you will increase the likelihood of people behaving improperly and increase the likelihood of the perverse outcomes coming from the targets. I am not saying trust the professionals. That world went a long time ago. I am not arguing that professionals should not be accountable: I believe they should be accountable and I am all for them being accountable. I do not see why you are polarising those two things.

409. Dr Morgan you actually said local targets agreed with local staff and professionals.
(Dr Morgan) Absolutely, because they are the people who have to deliver it. That does not mean they are woolly, weak, lily-livered targets. What you want to capture is aspiration. You have to know where you start, what the best in your class is doing. I have an aphorism: if you think you are doing well you are comparing yourself with the wrong people. That is what the target has to be about. How do I get to be the best I can possibly be compared with comparable organisations? That is relatively easy to do with the type of data we have available and relatively easy to track at a local level. If you capture the hearts and enthusiasm of local doctors, nurses and other professionals to achieve that, you will achieve it, it will be delivered, because it becomes something they want to do because they always want to do better every day. It is not about getting rid of targets altogether, because targets are really useful management tools in ratcheting that up. It is giving people something to aspire to which is genuinely challenging for them. Where I was chief executive of a health authority we could achieve anything you asked us to achieve nationally because we had a relatively affluent, well-off population. Any national target we would achieve without doing anything. That is not good enough because we could do better than that. One of the issues for us was a rate of dental decay in children which was in the worst third when for us it should have been in the top five and it was unacceptable to be in the bottom third. For us our local target was to get the state of the mouths of the children in our area up to the level you would expect for the rest of the population. It meant systematically thinking about how we provided dental care in a different way and we achieved that. That was a very powerful target. We were hitting any national targets you would want us to hit but, because it was local and specific and aspirational, it produced real improvement in people's health outcome.

410. What does Mike Newell say about this?
(Mr Newell) Firstly, if you do not trust your professionals, you are not going to go very far. I hope that the system is not based on having targets and performance data because we do not trust our professionals. There is almost an assumption that before someone else externally thought of some targets managers did not have targets and they just drifted around within an organisation delivering something by accident. We have always had targets and the interesting thing is that we still have our own targets and our own performance data set locally to achieve and deliver. The key is the relationship between those professional managers and the target-setting process and this is balance about making sure that the agenda of what needs to happen for performance improvement in an organisation is driven by professional involvement. If you have it at ministerial and senior civil service and our level end and you do not have a full connection with the professionals then you may end up measuring the wrong things and you may end up with very poor performing prisons, despite all the targets. I can give as an example the issue of Wormwood Scrubs which ended with a number of investigations and convictions for violence. They had KPIs and KPTs. They were focusing on those, but they were not focusing on the right things and there would have been more appropriate targets for that establishment. The relationship which exists between the very top of the organisation and the professionals needs to be the one which drives it.

411. I guess David Butler might have a different take on this because your role really is about the consumer interest rather than the producer interest. My question is that we are seeing the argument for the pre-eminence of the producer interest. Do you agree with your professional colleagues?
(Mr Butler) I am not sure there is quite such the polarity you suggest between the consumer interest and the professional interest. If I can take us back to something which the Chairman implied earlier on, it was that potentially you could have a situation where the parents sit on one side of the classroom and the teachers sit on the other side of the classroom. That is not true. Both have a genuine desire to see that the pupils in their care, whether it be in school or home, achieve their fullest potential. That is what we are aiming for and that is what we should be aiming for. Therefore you have a situation where there are some things which you have to respect and the professional drive to improve things, but what I would like to hope is that we could have a set of targets which energises, because surely the job of management is to energise and to provide the infrastructure which makes people want to do the best they can for the children in their care. It is not quite as polarised as you suggest.

412. I think Mike Newell is on record as saying that one of the failings of the prison service is the failure to recognise the difference between management information and targets.
(Mr Newell) Yes.

413. It sounds an attractive proposition. Do you want to say something more about that?
(Mr Newell) We collect many things which tell us parts of pictures and any manager in any organisation is daily collecting a lot of data to inform decisions and make best decisions. Some of the things we regard as targets are only part of that picture. For example, we have five drug targets as an organisation. In reality those are only pieces of information about planks in the strategy for delivering a reduction in drug use. None of them means anything in itself. Detoxification. I deliver a detoxification programme to a prisoner in custody. What have I actually delivered in the final outcome. It is a piece of management information about that. We have targets where we are only dealing with a very small amount of the picture. There have to be some hard targets which are crucial to the delivery of the organisation, running alongside that, to make any organisation work, is a vast amount of management information which is analysed daily by managers at different levels in the organisation to deliver that business. We certainly have not reached 400 targets and I do not really know how anybody copes with 400 targets. We are running about 50 with about 100 in juvenile establishments. We are going up all the time. Many of the ones which get tagged on are not what I would call real targets. Hard targets such as no category A escapes, those are hard targets, those are clearly core business for an organisation and they are a target. A lot of the other is not.

414. There seems to be some empathy from your colleagues. Is there any more to say on this?
(Dr Morgan) There is massive research evidence that the best information to set targets comes from the management process. As soon as you get away to information which is not being used to manage the business, the less accurate it becomes, the less useful it becomes. Part of the problem with targets is that they are often set centrally by people with no practical experience. A classical target in the NHS would be the percentage of beds which do or do not have a television. It is a meaningless target. You would never manage your business by doing that. What you want to know is whether you have any wards left and you have done it. You would measure to those two things, not to what the percentage is, 61 or 65 per cent. What does that matter? It is a meaningless piece of information although it is statistical and hard. What you want to know is that you have done the task. It is how you get that management information built up and it is your bottom-up sort of approach where the information is absolutely critical.

Chairman

415. One more thing from you. You gave a very attractive description of this best-in-class model which we would all warm to. What I want to know is if we wanted to get from where we are now to there, how would we do it and what would the role of the centre be in bringing that about?
(Dr Morgan) In the NHS, although we are bedevilled with a large number of targets which do distort some of the thinking and if it is a target people do it and if it is not a target it does not happen, we actually have some very good processes being developed to take us there. One of the problems is that you cannot take a whole organisation to best in class because if you take a hospital it may have 7,500 staff, run 30 or 40 different departments and if you took the number of conditions they treat over a year they may treat 5,000 different conditions over the year. It is very difficult to run it in a batch process way and take the whole system and the organisation. The sorts of tools we have sometimes look at the processes. A whole series of tools is being developed by the Modernisation Agency which has looked at how you manage outpatients more effectively than we do at the moment. Actually the people who run most outpatient departments are consultants and we never train consultants how to run outpatient departments, they just pick it up from their predecessor. There is a whole redesign function going in to redesign processes. My favourite example of that was Leicester Royal Infirmary where they looked at how many processes happened to a patient from the time they entered with an ear, nose and throat problem to the time they were treated and there were 84 different interventions with the patient or their notes. They sat down to redesign it and made it five interventions. That sort of thing is happening and is happening in every hospital in the country and we shall have some of this redesign going on today as we speak. That is redesigning the process, which is very managerial. The second issue is how then to get best standards and quality for clinical care. I suppose the leader in that field would be the National Institute for Clinical Excellence and the national service frameworks, both of which are defining not targets but defining standards of what you would expect. Some of those standards are baseline standards and every service should provide it, but many of the standards are aspirational. They are about, if we were providing the best service we could possibly provide in the UK today, what would it look like. They are giving a menu of things which local clinicians can then redesign to assess their services to say either this is a good service or it is a bad service. The National Institute and the national service frameworks are for getting into how clinicians know whether the standards they give locally are good. They are not targets, they are standards. It is that sort of approach. If you were going to do anything in the NHS, it is more power to the Modernisation Agency, making sure resources are targeted to the Modernisation Agency and the work they do at a local level, with one important thing: making sure that when you try to modernise or change, and modernisation is the word that we use in the service, we actually invest resources in the people who are asking to change to be the best. We do not ask them to change on top of doing a very busy job but give them some protected time. If you give some protected time to people to think about what they really want to achieve for their patients, that is what inspires them, that is what excites them, because they all want to do a good job for the patient. Rather than for themselves it is about the patient. I think "Steady as she goes" is the right approach.

Mr Prentice

416. Does the government have a target for the prison population? I was reading in my brief that in 1994 there were 41,500 prisoners and now you have to cope with 72,000 six years later. Does the government have a target either for increasing the prison population or decreasing it?
(Mr Newell) It would have helped if it did have a target and therefore there may well have been more accountability on the way in relation to those numbers. The real difficulty with the prison population is that it cannot be capped, accommodation can never match the population so there is always a huge lag. All the decisions which are taken in various parts of the criminal justice system and particularly those at the moment are likely to push up the prison population still further.

417. My real question is: how are the targets negotiated? This is for all the services. To what extent do you say to the man or woman from the Ministry, get real, we just cannot deliver all this target, there are too many imponderables, too many things outside our control? It is that process of negotiation between the centre and what you have to deliver which is interesting, is it not?
(Mr Newell) Yes, it is. The deal is made well in advance in the Public Service Agreement in relation to the spending rounds. Then the situation moves over a period of time, so it does not necessarily match the thinking at the time that was set. That is perhaps me being generous on how it is put together.

418. Yes, you are.
(Mr Newell) I do think that a lot of aspirational targets are set up there and by the time they get down to prisons and particularly in the current climate, they become unworkable. Take for example at the moment issues in relation to drugs, voluntary testing compacts for prisoners. I run a large local prison and in that local prison people turn over so fast with this terrible word "churn" that no sooner do I sign them up to a compact than they have moved somewhere else. You decide whether I am meeting my target for compacts on a particular day. So on a particular day I have 190 and I should have 200. The reality is that in the month I had 320 of them, but they disappeared. A lot of our targets become quite silly in the circumstances which are created.

419. I am interested in hearing more about the silly targets. It seems to me in evidence we have had already in this inquiry that there are some targets which are just plucked out of the air. Professor Brighouse, you will know about the truancy targets for example, this 10 per cent reduction between now and 2004.
(Mr Newell) A five per cent reduction in re-offending shared between ourselves and the probation service would be an example of a silly target. I cannot find on what worldwide evidence that is based. Nobody has achieved that thus far anywhere in the world in the timescale of three years and it does not appear to be backed by any research evidence.

Chairman: John Cleese had the Ministry of Silly Walks. We could have the Ministry of Silly Targets, could we not?

Mr Prentice

420. On the question of truancy targets, that is a classic example, is it not, of a target being plucked out of the air?
(Professor Brighouse) It is a process of negotiation but the fact that we want to try to make sure kids attend school and that somehow or other we might devote more of our energies and more of our ingenuity to make that happen because they are likely to benefit in their life chances seems to me to be something we have to return to day after day after day in the school. Continuing to highlight it and bring the community on board is worth doing. In London the issue of truancy is a really, really big issue and is in any urban area. Take the 10 per cent, we are all assuming that you are going to get worried if you fail to hit every one of these targets and we never approached it that way. We said we would go for aspirational targets to remind ourselves of what we want to do. If we do not hit them, well we had a good go and we worked out whatever way we honourably could get there. If somebody is not going to punish you, that seems to me a whole estimable way of behaving. If you are going to be punished subsequently for missing that target, you are going to say you will not set it.

421. Yes, but a lot of people would say that there is a cultural denigration, that if people do not meet targets, then they have failed in some way. I am looking at today's copy of The Times where it has published primary school league tables. The Minister is condemning weak leadership in too many schools�listen to the words�dragging down the results. Is there just too much denigration of people who are trying to do a half-decent job?
(Professor Brighouse) I believe that is the product of the media and the government, having a huge set of units who dance a complicated pavane with the press which inhabits this city. I believe that is profoundly damaging. I do not believe for one moment that the Minister actually said all that is in there.

422. It is not all in direct quotes.
(Professor Brighouse) You know what I mean. What I am really saying is that of course the name, blame and shame is profoundly damaging to the energy and drive of those who are trying to make a difference in whatever sector they are performing but particularly in the public sector.

423. May I pick up on that and ask Dr Morgan a question? I was looking at the briefing material which the Confederation sent us and it seems to me just reading it that managers in the NHS have had a pretty rough time. If we are talking about a group of people who are systematically denigrated, it is NHS managers.
(Dr Morgan) Thank you.

424. This briefing material quotes the present Secretary of State for Health�all in direct quotes this time�"The problem lies not with doctors, nurses, cleaners or other staff, but the management and organisation of the hospitals". How do you motivate a group like NHS managers if they are constantly reading this stuff from very prominent politicians, that they are useless?
(Dr Morgan) How do you motivate people? You motivate them by saying you trust them�it is part of the trust issue�to work at a local level with your clinicians to achieve things which are right for your community. You give them your trust. You may make them earn it first. It is quite appropriate that there are things you have to demonstrate to earn trust: you have to demonstrate you can be trusted. If you earn it then you will get the space to do things at a local level and achieve things and we will recognise it. You are right, managers are the butt of an awful lot of negative comments, not just from ministers or from the press but also from doctors and people like that. It is really important to try to develop nationally and locally a much better understanding of what the management process is. What management is about�and sometimes this is in conflict with what doctors think�is making sure that every penny spent is spent wisely because a penny wasted is a penny which cannot be spent on another patient. It is not a penny to go into some wonderful slush fund which managers have, it is about treating more patients. It is a utilitarian perspective: the greater good for the greater whole. Clinicians on the other hand often think about the individual patient in front of them and sometimes there is conflict between what is right for one individual and what is right for the greater good and society. That is the area where managers work. What is interesting and I think really important is that we call ourselves the voice of NHS management. It is not about managers. To be effective management has to be something which really engages people who are professional managers, but has to engage clinicians, has to link in with the greater society as well and has to be more than just managers doing it to other people. It is about how an organisation does it to itself and sets its own aspirational goals. As soon as managers work in that sort of environment they are very enthused, they work in the NHS because they are as passionately committed to patient care as any other professional. It is capturing that which seems to me to be the issue. It is not just managers who feel put upon; at the moment it is the whole of the NHS. You will have read the things about clinicians and doctors. Everybody feels under the same sort of set of constraints.

425. You are in favour of foundation hospitals, are you not?
(Dr Morgan) Our stance on foundation hospitals is that we are in favour of foundation hospitals, but our press release said not far enough, not fast enough. The bigger gain here is by having a deregulation, being very clear what you have to achieve in the area but deregulating the many not the few. Our view about foundations is not far enough and not fast enough.

Annette Brooke

426. Could we return to the re-offending statistic? I hope you are going to be able to help me with some Parliamentary Questions actually. Whenever I try to get questions in trying to find out which prisons, what programmes, are actually effective, I always get the answer back that the data is not collected centrally. When you have a target over the whole country or over England and Wales of 5 per cent re-offending, how do you feed into that figure?
(Mr Newell) The way it is broken down is that the prison service will then deliver a whole series of things which it is believed will contribute to that. So we deliver so many thousand carrots, which is the term in relation to the drug interventions. We will deliver so many thousand candidates through offending behaviour programmes, those may be sex offender treatment programmes, cognitive skills programmes and management.

427. Are they evaluated?
(Mr Newell) Yes, they are evaluated. There is a mixture of research about those because most of our programmes have been imported from Canada and adapted for here. The follow-up work on sex offender treatment programmes is very good and does show pretty good results. The work on cognitive skills and the reduction in offending was less than convincing in the last Home Office research I saw. It is open to more interpretation. At local level in each establishment we shall have a target to deliver 60, 100 people through programmes, whatever it might be and some carrots. Those are evaluated for standards. There is a quality rating put on delivery of those programmes to make sure they have been delivered to the standard which should deliver the effectiveness and the effective reduction in offending. The probation service have a similar range of things for which it has to make progress. The difficulty is that this is really pure aspiration. We just hope in a few years' time that when we add all this together, it produces a reduction in re-offending. Indications would say that getting people into employment, getting people into accommodation, getting stability in the community on release for offenders is more likely to affect re-offending than the programmes we put them through. We have that target and it is not wrong. The comment was made about aspirational targets being ambitious. We just want to reduce re-offending. We must be very careful to make sure that we do not believe our own publicity, that if we do all these things we may deliver all those things, we may meet all those local targets and we may not affect re-offending one jot.

428. I do not understand how at a more localised level you can get some ownership of the big target. The big target which everybody wants, to reduce re-offending, particularly on the short-term prisoners who are going in and out and all over the place.
(Mr Newell) You do not have ownership of that large target. I honestly do not think that at a local level my staff are interested in that target. What they are interested in is reducing offending and working with prisoners in solving problems. They will get people into accommodation, they will get people jobs, they will put them through programmes, they will improve and perhaps help them onto a path to put drugs behind them and then see those as delivering all very important things. The fact that the contribution to re-offending may be that we do reduce re-offending is something beyond them and should be beyond them. This is the problem of marrying up the central and local targets.

Chairman

  429. Do you want to come in Dr Morgan?
  (Dr Morgan) Probably not on this issue directly, but it is related.
  (Professor Brighouse) The more you think about it, the more that is the trick. Within the sphere I work in, you know that if you can get teachers really engaged in formative assessment, which is that they are really sharing the targets of where the kid goes next and their practice as teachers is perpetually improving, in the end the targets will take care of themselves. It is the balance of how much you provoke teachers, spur them, inspire them into looking at each other's practice, learning from the latest research, pushing things forward. If I do too much top-down on them, they are bothered. The pressure is actually on the managers. The manager needs to be able to hold this issue and really have the courage to encourage aspirational targets, go public on them and withstand the flack when people are saying they are not delivering. In the end it will be the bottom-up energy which enables you to deliver the targets.
  (Dr Morgan) People will go along with the best targets. With some of the most effective things which have happened in the NHS, for example the introduction of a new class of drug called statins, which you give to patients, it reduces their blood fat and also significantly reduces death rates, setting a target is going with the spirit of what people want to do and to achieve and using a target you may be able to speed it up, make it measurable and explicit at local level. That is a very powerful target because everyone wants to do it. We are now seeing a decline across the country in death rates from heart attacks very rapidly.

Annette Brooke

  430. I am really interested in this. Having followed through there, and perhaps I did want to ask whether you were setting the targets yourself rather than having them imposed for your prison, do you think you could learn from the other disciplines in terms of how you would set your targets?
  (Mr Newell) I think we all learn from each other in this world. When you look at how we are allowed to set our targets, I suppose you would say that at most local establishments what you have is a group which is imposed and then you have the ones which are key to the establishment, which the establishment believes in, which are set locally. Sometimes there will be overlap between the two, sometimes there will not. I am likely to get performance from those who work for me if they have this level of ownership of the target and that is important. They can understand where it comes from and why we are doing it and that it has some match into the establishment's role and ethos. There are targets in relation to resettlement which have been set this last year which are proving very difficult for the service to deliver, not least because some of it takes place one month after the person has been released into the community before you get the credit. We are moving people around at such a rate of knots we do not know where that prisoner was discharged from and who should get the credit and who is going to do the follow-up. We could set a better target locally in relation to resettlement, breaking down some of those components which would mean something and still deliver the same thing, but it would not have been imposed in any practical way from the top, it would have been delivered from the bottom by saying yes, we recognise these are the elements of resettlement, we shall deliver these and we shall agree some reasonable targets. You can do things in different ways.
  (Dr Morgan) Quite a lot of learning goes on through vehicles like the Audit Commission who are looking at the whole of public service and how targets are set. Their documents around an individual service, say health service documents, will often refer to best practice which comes from education and places like that. There is a genuine attempt to look across the whole of the public sector through some of that type of information.
  (Professor Brighouse) One point which we have not covered so far, which I think is important and we were beginning to move towards it when I was leaving Birmingham, is that the most vulnerable people in our society actually require joined-up or inter-disciplinary or multi-agency working. I was beginning to work with the health people and the police and beginning to believe that in my contract should be some of the objectives of the police and health service and in theirs there should be some of mine. That would force us to be interested as people, not letting it slip down the agenda because we have a lot to do, in actually working with each other to deliver, because they are interdependent. You can think of primary care particularly and education having a lot in common where we want to work together.

Chairman

  431. That is a very interesting point and you are right to say we have not touched on it this morning. Is not the conclusion that that is where some central targeting can have a role? If the centre does knock some heads together by giving different organisations targets which require them to work with other organisations, it may produce forms of action which would not have happened otherwise.
  (Professor Brighouse) Yes. Unfortunately the example given by central government in this respect is not the best.
  (Mr Newell) There is a very good example in relation to the prison service and the health service. Giving the responsibilities to the health service for the provision of health care in prisons, increasing the responsibility and the budget from April 2003, has shown a dramatic change in the approach and access to community services for prisoners in custody from that. There is absolutely no doubt. I am hoping the same principle will apply now that DfES have taken over in principle the responsibility for delivery of education within prisons. Those sorts of moves, coupled with things such as the local criminal justice boards now which are coming into operation, which will tie people more into the local area rather than national strategic issues works a lot better and a lot of that is about targeting and responsibilities.
  (Dr Morgan) The more targets you have the less anything is a target. One of the problems is that if you have a lot of targets, you have a hierarchy of targets. It may be explicit, it may be implicit but you end up having a hierarchy. You know some are really important because you will get sacked for those and you know others are targets which it does not really matter if you miss. The problem you have in terms of joint departmental targets is firstly getting agreement at the top, at government level, about what those joint targets should be and then making sure that every department regards those as the top priority. Otherwise you get a target which says it is really important for the health service to develop prison health but you know if you are in a trust that the top target and the target which really matters is waiting lists. That is where all your resources go. It is not that you do not want to deliver that target, but delivering the mainstream target takes priority. There is something about being very selective about what the targets are, trimming them down and perhaps using cross-organisational targets as more important than some of the individual organisational targets.

Chairman: That is all very, very helpful.

Mr Prentice

432. On this particular point, you circulated some additional briefing which we received this morning and my eye was drawn to "Competing targets". We know that there are 400 targets for PCTs, 250 for acute trusts, but you say in your evidence to us that the Department of Health ". . . encourages competitive behaviour between programmes which includes target setting". Then you go on to say, and this is astonishing, "In some cases there has been informal briefing by one part of the Department of Health against others about which are the `real' targets and which can be ignored". That is incredible, is it not, that you have the Department of Health saying these are real targets and the others can be ignored?
(Dr Morgan) You are back to the targets you have with constrained resources. Fewer can be delivered because resources and targets are not matched together. There is no systematic process from bottom up to say how much it costs to achieve this target. What you have at a local level is a vast number of targets, some of which are more important than others. The other issue we have is that when policy has been set, it is often set by civil servants who work in different branches of the department. Quite rightly, if all you do in your work is prison health, it is the most important thing in the world to you to get prison health improved. It is a great success to you as a civil servant to get a target for which the service collects data. I do not know whether you get any performance money, you probably do not, but you get a warm glow that you have done something really good for prison health. The fact is that when it gets out to the service it is very hard to handle, because in the hierarchy it may be a very low. It was Mr Dobson who said that everything is a priority and nothing is a priority. That is the reality.

433. I am sure someone said that before Frank.
(Dr Morgan) He certainly said it in some planning guidance which went out from government to the service about five years ago.

434. I should really be interested in getting the details of which targets can be ignored. It is in your evidence so you must have the details.
(Dr Morgan) It is the other way round. We can tell you which are the really important ones you must deliver and must be sacked on and then you can assume that anything which is not in that category would be less important. It is that way round. That is the way it happens. We have 130 targets. Which ones am I going to be sacked for? I can be sacked for these five. Those therefore immediately take priority quite naturally over the other 100 and whatever.

Chairman

435. Which are the sackable ones?
(Dr Morgan) The ones which are really important are the ones to do with access, they are to do with waiting times. It is quite unacceptable for patients to wait over 18[1] months. That would probably be the most important target. They are to do with the development of some parts of mental health services, to do with crisis intervention teams. Trolley waits, making sure you do not keep people in accident and emergency departments too long and get them onto a ward. They are all admirable targets and produce real, rapid, demonstrable benefits for patients, but they do mean the things which are not in that category receive slightly less attention.

436. You can screw up on all sorts of other things as long as you come through on these.
(Dr Morgan) Indeed and what people do not count in resources�they only count the money which goes in�the most valuable resource you have as a manager, is your time, your leadership and the time and leadership from other people to facilitate change and change takes time. If you are spending all your time on the headlines, you will not be spending on things which might be absolutely critical in your organisation. There is a document which is well worth looking at and it is An Organisation with a Memory written by Sir Liam Donaldson, looking at some of the areas which have failed in the health service where we have had inquiries such as cervical cytology, and on each of those occasions, when you look at it, whilst you can blame individuals, they are systems failures where people have known that things are not quite working but because their time and energy has been on the really important headline targets, there has been no ability to focus and change and improve. This is why we think you have to have real local diagnosis about what matters to you, where you are not meeting the best standards�not targets, standards�to drive the improvement.

437. Very illuminating. Thank you very much.
(Dr Morgan) May I make one point which I do not think has come out yet and that is the difference between targets, which are the things you are set and you have to achieve and they are numerical and data collection. Ian Bogle talks about 400 targets. I do not think there are 400 targets. I think there are closer to 130 targets, but without doubt there are 400 or 500 different data things which are collected routinely. Often people do not distinguish between the targets where you get something measurable and the data collection.

Sir Sydney Chapman

438. Mr Newell, you are President of the Prison Governors' Association as well as governor of Durham prison. You said earlier that the prison service had 50 targets and you were talking about assaults. Can you just outline what targets there are in relation to assaults? You were talking about assault solving. If you could go a little deeper into that I should be grateful.
(Mr Newell) There is one target on assaults which would be a figure, the number of assaults for each particular prison. There would be a reducing figure for the following year. What it is based on is the number of proven adjudications so that you find who the assailant is, you then have sufficient evidence to put them in front of the governor as it was on adjudications, now independent adjudicators, and find the person guilty. If you find the person guilty, then that becomes a proven assault. When you consider that the rate of finding the assailant and going through that process may be, if we are doing well, 40 or 50 per cent, then obviously one of the ways anyone can have a much better target all the time is simply paying no attention to reducing violence within the prison, yet the target is meant to be about reducing violence within prisons.

439. To me there is a difference between assaults and reducing violence. The point I am making is: what is the definition of an assault? Let me tell you where I am coming from. It would be more convenient perhaps for your staff to consider that a prisoner has accidentally brushed into another prisoner rather than thumped him in his ribs. Do you have a definition?
(Mr Newell) We have legal definitions of assault obviously. The problem is that it is a crude measure which was put in at the very start of KPIs and KPTs in the service as some attempt to say something about the safety improvements. It has not moved on since then. It is still extremely crude and we have just lost sight of it. It has lost some meaning in prisons as a measure of safety and that is what happens with a lot of these targets. They start off with great enthusiasm about this meaning something and then people realise that it does not mean what it says, that that target is not contributing and that is when there is a second set of targets. My targets internally are about the research work I do on assaults, where people find dangerous points in the regime, how I then begin to tackle aspects of the regime, whether it be with CCTV, whether it be a different approach to supervision, a different approach to selection, those all become my targets to do with the issue of violence in prison and the assault bit becomes something I have to fill in in relation to forms.

440. May I just put this question to Professor Brighouse and Mr Butler? You will know that school league tables have been abandoned in Northern Ireland and Wales. Is it your personal opinion that this will lead to a decline in standards or a less sharp rise in standards�I always want to be constructive rather than destructive? Or do you think it will not make a blind bit of difference?
(Mr Butler) I would be tempted to say that I suspect it probably will not make a difference. Personally I would prefer that we did not see the total disappearance of league tables. They are informative but the question we have to ask is whether they are properly prepared and whether they give us real information. I am very sorry to hear from Mr Prentice what the Minister said in The Times this morning because we have this issue of success versus vilification. What is going to happen to those people who are now at the base of the league table, those people who have been deemed to fail? What is the effect of demoralisation on those people? When we prepare league tables, what account is taken of the point from which people start? I can remember a conversation a year ago with a headteacher who came out at the bottom of the league tables in a local contest yet, given the children she had in her primary school, the achievements of her staff had been exemplary. No account was taken of the starting point or the fact that she had a very high "churn" rate of the children who attended her school. If we ever saw a situation where they disappeared in England, we now have a level of energy where people want to succeed, teachers genuinely want to do the best for their children, parents want to see the best for their children, so probably it would not make a difference.
(Professor Brighouse) I think it probably would make a difference and if they were totally abandoned and the information were not available to the schools, then I do not believe we would have movement upwards. Where I would want to go, having given myself time to think about it, although of course it has been asked before, is to push, at the secondary level at any rate, collegiate approaches. I would want groups of schools to produce their results for public consumption and be inspected for public consumption and the internal results within the school to be used in order to improve the performance of those schools which are at the moment most at risk. That brings me to a whole other issue which is around secondary education which we have not time to go into and which I believe a parallel Select Committee is looking at. It is my belief that the unfortunate thing in schools is that the level of competition between independent autonomous schools, and they are largely that, is producing a greater distance between those who do well and those who do not do well and sadly it is those who are in the worst position to differentiate, probably poorer, who end up getting the worst deal.

  441. I suppose we have gone through a decade now where schools have become more accountable to parents. I want to look through the other end of the telescope: what about parents being more accountable to teachers? Do you think it would be a good thing�I am only asking for a personal view�if it were a requirement upon parents with a child at a primary school to meet the teacher responsible for their child at least once a term, 15 minutes at least, to discuss the child and how the parents could co-operate in promoting the learning and teaching of the child?
  (Professor Brighouse) First of all it is desirable that should happen and much more than that should happen. You could make it a requirement but probably those parents who at present do not naturally want to do that may be in a position where they would not do that anyway. We use the word "consumer" about parents and I let it pass, but I do not believe parents are consumers, I believe they are partners in education with teachers in the interests of the children. The more that can be encouraged rather than required, the more likely it will be a willing partnership. I have absolutely no doubt that we need to do a lot more in terms of parental involvement, particularly in urban areas. I am not sure a requirement on the parent is the way to go about achieving that.
  (Mr Butler) I would echo that. The key important word here is "partnership". The more we can do to foster the partnership between parents and teachers, between the home and the school, the greater success we will achieve. You also have to take account of the fact that if you were to require parents to meet with teachers, you have to face the fact that we have a very high percentage of working single-parent families and when would you actually achieve the opportunity for that requirement to take place?

442. Dr Morgan, in your opinion should additional funds go to high performing trusts or failing trusts?
(Dr Morgan) It is nice to have an incentive for people to improve, but the issue is the nature of the incentive. You can give incentives to high performing trusts which are not just about cash; there are all sorts of things you can do. It is good to have incentives in your system because that pulls people to change rather than punishes people for not changing and that is tied in with the aspirational view. Without doubt there should also be something around what you do with hospitals which are failing. It may not be money, it may be additional management help and support and time to get off the treadmill and the failure. That may be more appropriate than money sometimes. It has to hinge on a diagnosis of what is wrong in that particular environment rather than a blanket one-size-fits-all. If you looked at the zero star trusts they were quite different in their characteristics. Money would have helped some of them but for others money would not have made a blind bit of difference because the issues were much more cultural and systemic. You have to understand what you are doing rather than a blanket solution.

Mr Hopkins

443. I am interested in this suggestion that measuring and testing in schools should be subjective or bottom-up rather than objective and external. I am making the case rather more extreme than you put it, Professor Brighouse, but I am concerned that if this were taken too far we might get back to the William Tyndale situation in the early 1980s where the headteacher said if half the children who left his school at 11 could read he would be very pleased with that. A subjective judgement of his own good performance. He was sacked and clearly alarm bells started to ring. Do you not think we have to have some external objective testing?
(Professor Brighouse) I thought I said that and explained that you have to start bottom-up because that is where the energy comes from. The more you look at it, the more you need the published data, but I was complaining about the way the media distorted the behaviour and the punishing regime, not that you do not need the data and you do not need it externally. Indeed my answer was about going for collective league tables rather than individual school ones to overcome what clearly has been a perverse outcome and not an intended outcome. What do you do next? Targets should shift according to context, circumstances and the age we are in. We are a long way from returning, thank goodness, to William Tyndale because it reflected a view that teaching made no difference and that was clearly prevalent at the time, encouraged by social research at the time that schools did not make a difference. We have lived through a period in which, thank goodness, we realised that schools do make a profound difference and that teachers make a difference and people are not born with general, inherited and fixed intelligence, but it is a malleable proposition and the job of the teacher is to cut and chip themselves to open the mind and the heart and take kids on.

Chairman

444. What is a collective league table?
(Professor Brighouse) A collective league table would be that I do not mind being punished as Birmingham�well I would not now, would I�in other words an accumulation of performance and publishing that for the public domain. On the whole, what we have in secondary education at any rate, the published league table outcomes have meant that those at the top of the league table, coupled with parental choice, are taking the children of aspirational and supportive parents and those at the bottom are receiving the ones those further up the league table are kicking out. It becomes a vicious circle. What I am arguing for is that if you really want people to understand each other you must not have a secondary schooling system which produces such a range of different sorts of schools with different sorts of populations that those young people during their teenage years do not succeed.

  445. I still do not see what a collective league table would tell parents though. Is it not like saying, let us not produce the premiership of football teams showing where they are, let us say collectively how many goals they scored together during the season. So you would not know how many Westham scored or how many Manchester United scored. It does not help anybody, does it?
  (Mr Butler) May I just answer that question from a parental perspective. Suppose you are in a situation where you decide to move into an area. What would be quite useful would be to know that the education in that area is excellent. That is what we mean by a collective league table. It is back to the point I made earlier. In some situations, some parents do not have the power of choice.
  (Professor Brighouse) This is such a long issue that your other Select Committee have examined and there is a paper you can look at around proposing different forms of secondary education. My belief is that at the age of 11 it is unhelpful to believe that secondary education equals simply belonging to a secondary school. We are much further on than that. It can mean belonging to a secondary school and something else and the best form of something else would be groups of schools which act collegiately and provide the extra, the weekends, the before and after school activities, the supplementary education beyond the school term. The publication of that result as a whole would force schools to support each other rather than compete with each other. At the moment what is happening is that those at the top of the league table are phoning at the weekends in order to pay more money to the best teachers in those lower down to go to those schools at the top of the league table. This is a perverse and unintended outcome, but I am afraid we are getting into a detail which I do not think is �

446. Just so we do not lose it. You would require there to be a genuine local network that people could plug into.
(Professor Brighouse) Yes, I would.

  447. Otherwise there would be no point having a collective league table unless there was a genuine network; similarly with hospitals.
  (Professor Brighouse) No, no.
  (Dr Morgan) We would argue exactly analogously to that. If you look at a hospital, patients do not materialise from thin air in a hospital and then dematerialise. They have a story, they have contact with primary care, GPs, they have contact with the primary care trust, they may need social services. What is more appropriate is what happens to the patient through their entire history and how all of that links together. That tells you whether you get good care. You might have a wonderful hospital but absolutely lousy primary care and social services. So your outcome may be very bad even though the hospital has done well and vice-versa.

Mr Hopkins

448. That leads me onto another question about international comparisons. By international comparisons, according to the OECD league table, of some 32 nations, we do not do too badly in literacy and numeracy. There are some better but many worse. Where we do fall down very badly indeed is in the gulf between the best and the worst. The bottom third and especially the bottom 10 per cent are appalling in their educational standards. Is the government not right to have targets to make sure we improve that bottom third and that bottom 10 per cent?
(Professor Brighouse) Yes. May I put this proposition to you very simply? If you want equity, equality, excellence of provision and success for everyone and you want diversity, do you want to add to diversity to achieve those outcomes independent competing schools or do you want interdependent collaborative schools where the scarce resource is shared, not in a way which would lead to the splitting of schools, because we are way beyond that era, but with the advantages of the learning technology there is a chance to have that. I am arguing first of all that we really need to address the issue you have required and we shall only do it by working collegiately both within schools and between schools. I think there is a different model which we could pursue and it will lead to a beneficial outcome. I am all for international comparisons. This city wants to take its education seriously and some of you may know that I have been asked to look at the totality of schooling for London. How are we going to compare London? What should my targets be? How am I going to be able to make sure that those targets are reached.? The goal for this city should be as an international capital city and it ought to be comparing itself with other international capital cities. At the moment, it is an inward-looking city rather than an outward-looking city. It may suffer from exactly the same problems we described for an insular school. What we really have to do is to find information from other comparable capital cities and try to move ourselves forward by learning from that experience and harnessing the efforts of everybody within the city.

449. I have much sympathy with what you are saying. I am just being provocative and trying to bring out some answers. In comparisons between schools with the same socio-economic background, some pupils do very well, some do very poorly. Is it not the case that testing has done or could bring out the fact that teaching methods, what actually happens in the classroom, are absolutely crucial? Are we not still suffering from a hangover from the child-centred theories of the past which have, in my view, evidently failed?
(Professor Brighouse) There is so much in every question. I would never dare say child centred. Let us call it learner centred. Are we really suggesting that a footballer should not be a football centred soccer player? In all these terms there is terrific ambiguity. We want teachers who notice the difference in every individual learner and adjust their styles with the individual attention needed in order that they achieve. I am for that and I am sure you are for that, but child centred elided suddenly into "We don't bother really. We let the kids do whatever they want", which is absolutely hopeless and nobody would support it. On the whole, the tests are excellent in terms of a summative and informative assessment of where the kids have got to. From the point of view of me as the learner, what I want you to do as a teacher is to understand where I am and enable me to move on and that is formative assessment. If you have too much of summative and informative assessment it gets in the way of formative assessment. It is how you get the balance of that right, because you clearly do need summative and informative assessment, but you must not do it at the price, in other words if the testing regime became the case that we were testing every year and we are in danger of moving in that direction, the teacher might be simply perpetually testing. Testing tells you where your learning has got to, but it does not do anything other than tell you that.

Chairman

  450. One final question. A few answers ago you raised the question of managers, which we have not really explored. I am struck by the fact that when we have had the discussion about targetry and measurement and all the rest of it, we come back to the fact that somebody produces improvements. If you had not arrived in Birmingham, and I speak as somebody who was a parent in Birmingham at the time and knew what a dreadful state the schools were in and you came and re-energised the whole system, re-energised teachers, re-energised parents, everyone, turned it round, if you had not arrived, that would not have happened. There was an intervention of a wholly managerial kind using data, doing the kinds of things you were doing. This is top down, is it not? Now you have been called into London to do the same. Is not the key to much of this, to make sure that we get the kind of managers in the public service who do not need to be browbeaten by this panoply of targets set from the centre, but are doing the kind of improvement strategies that you did and are describing, but which do not exist in sufficient numbers across the board, otherwise we would not have some of the difficulties we do have.
  (Professor Brighouse) I think more exist than people are prepared to concede. I do not start until January in London, but I have already spent quite a lot of time in London. I have already come across some pretty outstanding leadership in schools and I have certainly come across three people who I would say are outstanding education officers and if I spent some time with them, I would be learning from them. What they have not done is be quite as public about what they have done. You know about what I do because I speak a lot, I write a lot and people therefore get to know about it. That element of what I do has been important to Birmingham because it has meant that people have wanted to go to Birmingham, because they have liked what they have heard about or read about. That is one of the functions of management and leadership which people forget and they forget it less in education than elsewhere. The key factor for a teacher in an infant class, for example, is how well that kid is listening, speaking, reading, writing and while they are doing it thinking and learning. Exactly the same thing is required, in addition to other things, by successful managers. How well do they listen, how well do they speak, do they read in order to extend their knowledge of what is happening and, vitally, how well do they write in order to spread the message of what they are up to?
  (Dr Morgan) There is a deeper problem though. If you have a centralist target setting with all the targets coming from the top, the way you then manage that at a local level is by being centralist yourself. What Professor Brighouse described in Birmingham was not about that. It was about a leader who worked at individual school level and energised individual schools to come up with how they would deliver the greater vision. That is quite a different management style from delivering a top-down target. It is about working deep in organisations, energising people, exciting people and sometimes targets take you against the leadership model which would be the most effective in producing continuous improvement.

  451. It was just trying to make sure we did not forget that the actual leadership role in organisations is fundamental. If we were to get that right, then we would not have to worry so much about all the supporting apparatus.
  (Dr Morgan) It is fundamental.
  (Professor Brighouse) Which is why the national college for school leadership in education is a very, very important development. If that comes off, it will grow leadership from the bottom and in the middle and throughout the system. We will have a much better system as a result there, if it comes off. There is every chance that it will come off because people have recognised the issue and are addressing it.

Chairman: Thank you very much indeed. We have had a fascinating discussion across the range and we have certainly learned a lot from it. It may be unusual for you to come together in this way, but it has been extremely beneficial for us. Thank you very much for your time.

1 Witness Correction: 15 months. Back

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MR JAN FILOCHOWSKI, COUNCILLOR JOHN BEES, MR CAREW REYNELL AND MR JONATHAN HARRIS

TUESDAY 10 DECEMBER 2002

Chairman

452. Could I call the Committee to order as we are now meeting formally and welcome our witnesses. If I have got this right, we have got Jan Filochowski from the Royal United Hospital, Bath; Councillor John Bees from the City Council, thank you very much; and instead of having Helena Thompson we have got Carew Reynell, who I am told is Head of Paid Services, as opposed to being Head of Unpaid Services. We hope we are going to be joined a bit after 3.00 pm by Jonathan Harris, who is Director of Education for Cornwall. He is driving up from Truro to see us so it is not surprising that he is not here at the moment. You will see who we are and there are names showing who we are so we do not need to go round and do all that. We are the Select Committee on Public Administration and we are doing an inquiry into public service targets and associated matters. We have had two extremely interesting days here in Bristol talking to people in public services about this. This is a round-up session at the end. Do any of you want to say anything by way of introduction?

(Councillor Bees) Nothing. Just welcome to Bristol for a start from a politician. Do not buy too many flats here!

  453. We have got through to this point without a flat reference. Let us start then and let me just ask a general question. We are getting the message from many people that the targets regime being set from the centre is somehow oppressive to public services, it is oppressive to people who work in them, we are told it is demoralising, we are told it distorts priorities, and the word "bullying" was even used this morning to describe some of the pressure people inside some of the local health services feel. Do you think this is an accurate or fair characterisation of the way target setting is working?
  (Councillor Bees) Perhaps if I have a go at it first. It seems to me that there would be more of a buy into the targets and the indicators if there were more of a discussion about what they covered and what they should be before they were landed on whatever the organisation is, in my case local authorities. It would help if they did not get changed on an almost annual basis because you are not comparing the same things. If the way that the indicators are calculated is different each year then it is not very helpful for the organisations. It seems to me if we had more discussion about those things, a longer time-scale for the discussion and a more comprehensive suite of indicators so that they did cover, for instance, in local authorities all of the main services rather than being pushed to some of the services, then that would be helpful, but we have got no objection whatsoever to there being indicators. We do get worried about the trend where you get indicators being broken down into nine or ten different subsets. It seems to me that is one of the reasons why people consider them to be oppressive, collecting more and more information and we wonder sometimes whether that is information for information's sake or whether it is aimed at improving public services. But we have got no problem whatsoever about having a regime of targets which can clearly be demonstrated to measure local services and therefore which is good management information for us to change those local services and improve them.
  (Mr Reynell) I want to expand on that slightly. The City Council has had a commitment to performance management for at least a decade and has been setting its own targets for its own services since the early 1990s. The part that targets play within a performance management regime, of capturing in a way that can be communicated across the organisation what the organisation is actually seeking to achieve and then assessing whether that has actually been achieved or not, in view of our history, we have to agree that this is the appropriate way to do things. From our perspective, we do see marked differences between government departments about the way in which targets are set, around the amount of dialogue with the local government community generally, and with individual authorities about the targets that are being set for them, and it takes time and it takes discussion to come up with performance indicators and targets that are useful and the right ones and where there is a degree of buy in locally as well as nationally. One of the differences we would see between government departments is that for those who have been doing it for quite a long time the benefits of that experience become apparent. For some government departments it is a newer form of engagement, certainly with local authorities, and at times that shows.

  454. Before I hand over to colleagues, we are on the eve of publication of the Comprehensive Performance Assessments for local authorities. Which day is it going to happen on?
  (Councillor Bees) Thursday.
  (Mr Reynell) Thursday.

  455. So we really are on the eve. We have been looking at different models of reporting information in different services. Is it believed that the methodology and things that are being measured and reported on under the CPA regime gets it about right or not?
  (Councillor Bees) I do not think it is any surprise, perhaps I should not say where we are going to be, that we are not one of the highest-performing authorities. I think we found it rather difficult to understand why certain services ended up with time factors. Education was four times and social services was four times as well and that brings into the overall score. There did not appear to be too much of a rationale behind that that we could understand. It will be interesting for us. We are obviously in the lower 25 per cent and we are not quite sure that it is a true reflection of the way services are in Bristol but it will certainly be an engine for change in Bristol.
  (Mr Reynell) I think we found different elements of the process helpful to differing degrees. I do not know how much you know about the Comprehensive Performance Assessment process that the Audit Commission has been undertaking for all 150 or so principal local authorities in the country, but it includes a detailed corporate assessment undertaken by a team from the Audit Commission who visit the authority, spend a fortnight there, talk to a lot of people, look at a lot of detailed information and arrive at an assessment. That assessment is then fed into the machine alongside performance indicator information about the services for which the authority is responsible, together with summary outcomes of previous inspections which have been carried out by organisations such as OFSTED and the Best Value Inspection Service and so on. Our experience was that the part of the process that involved detailed engagement between the inspectors and the authority was very helpful because new sets of pairs of eyes were brought to bear on activities. There was a genuine dialogue in our case. I am not sure that has been the case in every authority in the country. A fairly detailed report was prepared and the process was constructive. The further we get towards something that boils down the outcomes of a range of visits by inspectorates, by the Audit Commission, by OFSTED, by the SSA to try to boil it all down to a single one word descriptor of the authority for the full range and diversity of services that an authority like Bristol City Council delivers, the less helpful it becomes and the more detached from specific things that we can do to improve specific services.

Chairman: Thank you very much. I am going to ask Michael Trend to continue.

Mr Trend

456. Can I go to a more specific case, that of the Health Service and ask Mr Filochowski who has some outstanding qualifications here. We saw this morning some local clinicians informally here, then we went to the Infirmary and met some of the senior managers and consultants there and we asked them about their trust, their situation. They were clearly extremely depressed that they are a no-star organisation. They felt very strongly that their CHI figures were good, they felt they gave good care, morale was surprisingly high for a hospital which the popular local press regarded as failing, the word that the Department used, and did not have a proper chief executive at the moment, all sorts of problems with which I am sure you will be familiar. However, you have a record of turning a no-star trust into a two-star Trust. What clues would you give your colleagues in Bristol?
(Mr Filochowski) I do understand a lot of their feelings, indeed I am sure I know the people you were talking to. I think it is a highly imperfect system but one which I have come to believe has a lot of advantages. I think there is little doubt that a poor rating does concentrate the minds, in fact Councillor Bees to my left has just said as much, and I think it is fair to say that our getting a no-star rating at Medway had a completely galvanising effect upon us, I think partly because it was unfair, but I still say it had a galvanising effect upon us. I think therefore one needs to separate issues about how do you measure, how well do you measure�and you must measure the right things and get it right�from the issue of does it have an impact and effect, and my view would be that across the public sector we have got some of the measures right and some wrong but the impact of that sort of assessment is, I am in no doubt, very important, and I can assure you not only does it depress people but when they get it right it elates them and certainly in Medway�and by the way it was also wrong in giving us a two-rating, we should have had three stars but that was okay�

457. Was it unfair originally because they had measured inaccurately or because they had measured the wrong things?
(Mr Filochowski) It was unfair because it was a snapshot of something that was true 18 months previously but was no longer true at the time at which it was measured. I think that is an issue about getting current measurements. I would have to say the measurement on Bath was true at the time it was measured so it is not a universally wrong thing, but again that is a very important issue. The Secretary of State can speak for himself but he did say on the Today programme in July that we got up in Medway determined to prove him wrong. He said, "You proved me wrong, that is fine." It is the first time I have heard a politician admit he was wrong and it was a delight that he was prepared to say that. I found again in Bath that morale was absolutely through the floor, but I have to say that morale was not through the floor because of the performance rating�people knew it was bad�the performance rating just made them feel even worse. They knew it was bad and now we have turned it round they feel great because they know that it is their effort that is turning it round and there is some objective measure of their turning it round which again I think is important. A purported objective measure that shows you are bad is really depressing but when it shows you are good, my God, you feel good about it. If you had got a couple of three-star trusts they would say, "Oh yes, it accurately measures where we are."

458. I understand that. As I say, the people we have talked to did have quite high morale, which did surprise me, they did feel the service they provided was pretty good and the concentration on the star system reduced the tension between headline grabbing figures and clinical judgment.
(Mr Filochowski) Would you like me to comment?

459. Yes?
(Mr Filochowski) It could do. Again we come down to the issue of what the right measures are and whether the star rating measures everything, and it manifestly does not. Bath came out easily the worst in the country at the same time as its clinical measures put it amongst the top ten hospitals in the country. There is absolutely no doubt that clinical care at the Royal United Hospital has always been amongst the best in the country and there are good objective measures of that. I would advise you if you are ill that is about as good a place as any for you to go. The problem is you have to be able to get into the place. It is no good getting good care if you cannot get into the place, so the star rating was measuring something very important in my view.

460. Alright, what did the star rating tell you? What was the star rating telling you was needing to be done?
(Mr Filochowski) I am a great believer in simplicity. I think if you have 50 targets, it is impossible, you will diffuse your energy so much that you will not do anything. I think you should have one target actually but if we cannot have one it should be three or four or five. If you get up to ten it is getting to be rather too many. What the targets told us was that we were at the RUH simply providing very poor access to people with emergencies so they could not get into the hospital. People who were very ill and needing immediate treatment were having to wait a long time to get it and people who needed an out-patients' appointment or an elective operation were waiting inordinate lengths of time. Of course, what it also told us, though we did not know that before, was that the hospital had not been telling it accurately how it was and again that was one of the things that came out which catapulted Bath into the news. The figures were inaccurate. Inaccurate is perhaps an euphemism as to what they were, they were deeply incorrect. All those things being allowed to carry on I personally think was fundamentally a disservice to patients, and bringing them out was a very good thing. If I could just comment on what you have picked up, I think one can have a view on other measures as well. The CHI reports, yes, are perhaps a broader measure but they are not done against agreed yardsticks and they do not have permanent teams so the CHI reports are very dependent on who comes in and how they approach it, so they are not a panacea either in my view.

Chairman

461. What you have been saying is very interesting because it flies against a good deal of what we have heard.
(Mr Filochowski) Sorry about that, it is what I believe.

462. That is its value and I think the fact that you can point to Bath which you say was clinically excellent yet everybody knew that it was poor is quite a challenging thing to say and a vindication of some of the targets.
(Mr Filochowski) May I just comment on this point about what clinicians think. It varies from place to place. Certainly what you describe I recognise as a reaction which I think is in part reasonable and in part defensive. Clinicians are very proud of their skills and the quality of their work and feel, broadly speaking rightly, that that is what is important. What I have also noticed is that they are just as affected as the average Joe in the hospital when we get a bad performance rating. They feel it is a bad thing for the hospital, it is bad for its reputation, it is bad for their reputation and broadly I think they recognise the value of changing that. When I went to Bath the doctors, who arguably you could say are providing excellent care and they can stand aside from it, have been outstanding in getting involved in getting in systems to make things work better because, I suppose, a glaringly obvious insight I have but nonetheless I will share it with you is that when things go wrong it is usually because of failure of systems not of individuals. If you fix the systems you can allow the individuals to flourish and to exercise their skills as they should. I think therefore it is reasonable to measure surrogates of system failure, which long waiting lists are.

463. Just on that, the argument is you can have great care and rotten systems.
(Mr Filochowski) I do not think you can really because rotten systems corrode care. Yes, if the care is actually delivered it is great but if you get the wrong notes of the wrong patient you might give great care but it might be to the wrong patient, to take an extreme example. There are all sorts of examples. Patients waiting a long time get more ill. If you make them wait a long time, I do not know about Bristol but there are instances of people dying on waiting lists for a cardiac bypass operation. We have great cardiac surgeons but they still died.

Mr Prentice

464. Just on this point, you say in your Annual Report that a few months ago there were significant numbers of patients waiting over a year and a half for their operations.
(Mr Filochowski) Yes.

465. What were the doctors saying to the managers about this? Were they saying, "It is an absolute disgrace that I have got an empty operating theatre and because of the systems operated by the hospital we cannot operate on all these patients", or did the initiative come from the managers, is it about resources?
(Mr Filochowski) The truth of the matter is I do not know because I was not there at the time. They certainly did not say it to me. I would have done something about it immediately. I do not think that the RUH had empty operating theatres, it simply did not have enough capacity and was not using the capacity it had efficiently enough. I think part of the problem was that it had not analysed what its problem was in a way that got to the root cause. Again, I think often but not always, because each case needs to be treated on its merits, that what a low star rating indicates�someone said this to me over lunch, I will not say who�is muddle and an ad hoc response to problems and I think that target setting can create a pressure, and if you do not know how to deal with it you are constantly backing away and coming up with ad hoc solutions which get increasingly desperate and unsatisfactory. Just to come back to a very early point, I think that can be perceived as bullying in a managed service like the NHS and can become bullying, so I think that a failure to cope with those sort of targets sometimes is accompanied by a culture of bullying. In my view, the bullying is because people, wrongly, think that pressure solves problems whereas analysis of the systems solves problems.

466. You said muddly management earlier.
(Mr Filochowski) I said muddle, I do not think I associated it with the word "management".

467. You said muddle but someone earlier said muddly management. Is the problem with the NHS that the managers are not really up to the mark?
(Mr Filochowski) No, I think the managers as a cohort are as good as in any sector of the public or private sector, at least people who are in the position to say that consistently say that. In Medway we had Professor Bob Worcester, who came in when I was there and his view was that the management cohort was as able as any he had come across in the public or private sector. He is not a man who throws away compliments lightly, so I think the cohort is�

468. I am struggling to understand this because if people are waiting 18 months for an operation, the reason is either capacity, there are not the beds or the operating theatres or what have you, or the system is not working as smoothly as it should.
(Mr Filochowski) It is both and certainly that is the reason why the Government is investing a lot of money in the Health Service�because it needs to increase the capacity to deliver these targets which have not existed in the past. Long waiting has certainly been a safety value by which you cope with the fact that you have not got enough resources to deal promptly with all the people who come through. I think the emphasis on waiting lists in particular has actually made people look at their systems and realise that they are not as good as they should be, and, in my view, they have improved quite dramatically over the last five years. There is still some way to go in our ability to deal with queues, and I suspect the NHS is about the most complex set of queues you will find anywhere. I mean that in a neutral sense rather than in a derogatory sense.

Mr Heyes

469. Can we stay with this issue. I think it is inevitable that we focus on the Health Service because of the experience we have had this morning where a lot of these things are fresh in our minds, although there might be an overlap into the local government arena later. Staying with the issue of bullying in the Health Service, we had people in here this morning, junior and middle ranking management from the Health Service, who talked quite convincingly about the culture of bullying and they traced it to the Department of Health and described it as a cascade down through the service that affected them on the front-line. When we talked to more senior managers later they talked about the immense pressures, about a lack of trust between management and clinical staff, all of which they rooted in this culture of chasing targets all the time. You have recognised it as a risk in what you have said already. Two questions really: how does it happen�and you have started to answer that already I think�and how can it be avoided?
(Mr Filochowski) I think it happens because it is a situation that creates pressure and if people cannot cope with pressure I think it progresses into bullying. I do not think it automatically needs to do so and when I arrived at Bath I suppose you could say that it was a completely bullied organisation and that is because everybody outside thought they were completely hopeless and had no trust in them so there was an incredible amount of intrusion. I had better not say a couple of things I was going to say because this is going on the public record. There is an incredible amount of intrusion.

470. Do we allow him to get away with that, Chairman?
(Mr Filochowski) I think it might be reasonable to say, though, that it was clear that people had not been telling the truth or had�

Chairman

471. You are doing well. We are enjoying it.
(Mr Filochowski) The waiting lists were not accurate. This came out as a major issue and whole cohorts of people came in from the health authority, the region, even the Department of Health, and I believe that people at the centre were so worried that as we were validating stuff the senior person there, who was not a member of the RUH, had to ring up the Chief Executive of the NHS at 2 am to get him out of bed to tell him what we had found. That was because we were the extreme outlier in the whole country. I have to say that we do not have people coming and bullying us because I do not let them. They do not bully us now because they have confidence that we are able to deal with the problems. Certainly the first thing I said was, "If you want these problems solved, please get your tanks off my lawn because you do not know how to solve them and I do." It is not easy to say that. I freely concede that coming in as Mr Clean I was in a strong position to do that. We often make judgments about how we say those sorts of things and how we behave. Having said that, I then had to deliver or else the tanks would come back again. I have to say that we had the worst performance ratings on everything and now we have not got bad performance ratings on anything, and that is in six months and they are leaving us alone.

Mr Heyes

472. To take what you have said to us very crudely, you responded to the bullying treatment that was handed out to you?
(Mr Filochowski) I responded to the pressure. I think "bullying" is such a loaded word, "pressure" is a neutral word. I think it does degenerate into bullying but proactive scrutiny and monitoring is surely absolutely reasonable. That is what you are doing, is it not? Is it not reasonable? It is about crossing that line that is the issue, and accountability is very painful at times when things are not going so well. I can assure you they have not always gone well for me all the time but I am a great believer in accountability.

473. Does the regime of corporate governance inspection/corporate assessment feel like bullying in local government?
(Councillor Bees) It depends on who is doing the inspections sometimes, and it can do. You get different teams. We had a corporate governance inspection which was a team of eight for a fortnight. We worked very well with them and we have gone on with them. We had the inspectors in a year previously, I think it was a team of 17 for a fortnight, and it was a bloody awful experience and really did run the organisation ragged. There was very little feedback between the inspectors and ourselves. Every inspection team feeds on the next one, so if you had a service which was deemed to be not very good, let us say the council tax service, somebody would come in and do a sports inspection and in the report would be: "The council tax system is not very good in Bristol and therefore sports is not," and you got this impression that everybody was reading everybody else's reports and had made up their mind before they came up. That is exactly what the situation was in Bristol and I found that quite hard to take. With council tax, again going back to the systems, we invested very heavily in IT there. The performance was not good. We improved the performance, the inspection team came again and re-inspected the service, and they found that we had responded, that we had improved the service immeasurably, but they still tried to incorporate other elements from other inspections into their report, and we argued vigorously against that. In the end they dropped it and now they are saying they do not want to come back and re-inspect that service for whatever the statutory period is. You can get into the cycle where the bullying is they will turn up on your doorstep every six or nine or 12 months and you will spend an enormous amount of officers' time and politicians' time in trying to cope with that particular inspection and make that inspection, hopefully, view the service in a better way, and that can be enormously demoralising for the staff that are working in the organisation. It is almost as though the cycle is bound to be downwards. Hopefully we are at the stage where we are gradually moving up and it is going to become less onerous on us, but inspections can be an enormous drain on any organisation.

474. One of the people we spoke to informally this morning�and it was supported by her colleagues�said that their perception at the middle and lower ranks of the organisations was that the senior people were too afraid to challenge the system. It was an "Emperor's new clothes" syndrome where people were too afraid and intimated to challenge and question. That was why there was a continuation of the negative consequences of inappropriate targets and inappropriate behaviour towards achieving targets.
(Councillor Bees) We had a council tax inspection here. The view is that we should be upper quartile, so I got my officers to produce the list of upper quartile authorities and there was not a city amongst them, and we are being compared against the Isles of Scilly's council tax of �500 to be collected from a relatively small number of people. They are an upper quartile authority, we are not. It is difficult to explain to people in a city of this size that that is an adequate comparator because it is not. The next group of people that we often get compared to is unitary authorities. We are a unitary authority, we are twice as big as the next unitary authority, we are in the group with the core cities, with the Manchesters, the Birminghams, but that is not our group for comparison, so there is a genuine problem here about whether these services are similar to similar organisations. I could give you the list of the 50 upper quartile council tax authorities in the country and you would find it difficult to find an industrial building in any of them.

Mr Heyes: Can I just take this a little further, I do not want to monopolise this, and stop me if I am going to. Staying with this idea of the Emperor's new clothes, I see Mr Harris has joined us, you have got a particular take on that because of the experiences you have had.

Chairman: Before you answer that I wanted formally to welcome you. We are particularly grateful to you for having driven up from Truro. We have only driven round Bristol so we are in awe of you for having travelled up from Truro!

Mr Heyes

475. You will have got the gist of this line of questioning. Tell us about your experience.
(Mr Harris) The Emperor's new clothes is quite an apt analogy really. We are the one authority in education which has not agreed targets with the Department for Education and Skills for key stage 2 pupils in 2004. I am precise with that because we have agreed targets for every other one of the basket that the DfES have given us but on that particular target we could not agree because we felt the target was not based in reality. It was based on an arithmetical population nationally rather than on children in our schools. We therefore felt that we should say no. Rather like the boy who saw the Emperor go past, I feel a bit like that now because we have been questioning the Department's methodology for the last year and we have seen over the last few months they have moved towards the methodology we would have preferred to have used in the first place.

Chairman: I am sure other people will want to pursue that with you, but that will do as a starter. John?

Mr Lyons

476. Can I go back to the Health Service. You made the point earlier that we have got quality people in the service providing that service, and you say we have got quality managers. Why are we unable to share best practice all across the country then and bring performance up through best practice?
(Mr Filochowski) I think we are but it is rather difficult. I do not think sharing means knowing and understanding and what we are trying to do is actually quite difficult. I think that is perhaps an assumption and I think maybe ministers sometimes feel that because one place does it right everyone can do it right, and it really is not as simple as that. I have to say in my own case I think I was quite a good chief executive in the days when I was in Poole and I knew Annette Brooke, but I spent a year in America learning about skills of system redesign and it was a revelation to me as to what you could do. I came back and started to apply that and to my surprise it worked, but it was then building up an organisation that had some competence in that and had some skills in that, which took some time. When we started to be successful and people said, "Why don't you give a seminar and tell people how to do it?" I said, "No, we have got to build up a whole battery of skills, it is a year long task, we have got to think about how you change the approach, it is a major, major task." That is why it is not so transferable. I have certainly come to believe that we have to address the fact of transferability and skills learning being a really major issue. I think the NHS has got perhaps insufficient but more understanding of that. The Modernising Agency, when it started four or five years ago, almost started with: "If we show people how to do it, they will do it" and I think now it much more believes: "We have got to show them, then we have got to help them, we have got to coach them along." I think it is a really quite difficult one, not an impossible one but a difficult one.

477. But you would have no problem with the Health Service nationally promoting system redesign as part of the management structure and so on?
(Mr Filochowski) Not only would I have no problem in them doing it; it does it.

478. Does it do it well enough?
(Mr Filochowski) It does not do it perfectly but it is getting better, it is trying hard to do that. There is a much greater recognition in the Health Service that system redesign is the key to improvement.

479. We have heard evidence of staff shortages on the front-line of nursing staff in particular. Two points have come across, one particularly about bank nurses and agency nurses having to be used to fill that gap. I know there is another argument about NHS Direct/NHS 24 taking away a lot of trained staff. How do you see that problem?
(Mr Filochowski) There is a problem of nurse shortages but life is full of problems and you can either bemoan them or try and solve them. Certainly when I went to Medway we had huge vacancies and when I left we had people queuing up for jobs. Bath is an area with lots of vacancies but in redesigning our A&E a couple of months ago we needed to employ about 12/15 nurses and we have been relying on agency staff. I felt we put a brilliant advert into the national press and we have got enough people to fill those vacancies. We have just got to try harder.

480. It cannot just be about an advert, surely?
(Mr Filochowski) It is about trying harder and not giving up. I am a great believer in relentless improvement, you keep pressing, you get past one, and if you reach a brick wall you do not accept it as a brick wall, you try to find different ways round it.

481. So there is the potential for trusts to do something similar?
(Mr Filochowski) I am not saying that we are a great exemplar in relation to recruiting staff but we are doing better than we were. There are lots of trusts who are doing creative and good things.

482. What is your view on the question of 12-hour waits on trolleys?
(Mr Filochowski) I think they are completely appalling, I do not believe in them. When I arrived at Bath five and a half months ago, the day I arrived was the middle of summer and there was not supposed to be anyone ill in the middle of summer, it was 80 outside, and there were 50-odd people waiting in A&E with no bed to go in. I had six or eight ambulances circling around the hospital unable to empty the patients into A&E so they could wait for a bed. I do not know how many 12-hour waiters we had that day but it was a lot. We have not had one since 11 July and we will not have any more because it is absolutely wrong to do that. It is about changing the system, it is about changing the mind-set about what is acceptable, and it is about convincing staff. The A&E staff felt overwhelmed. They knew how to solve the problem and one of the things a senior doctor said to me was, "I am not going to register this as less than 12 hours because that will enable you to say you have met the target and you will not have", so I had a very public eyeballing with him and talked it through and said, "Look, I will not do that to you, now come on," and it reached a point where he said, "Okay." From that point on we have never looked back. The Modernisation Agency which was coming to tell us we had got it wrong two weeks ago said, "It is about time we used you as an exemplar, can I bring some people from Trust X to see what you have done?". The people were there, the possibility was there.

483. I love that example. Is there any scope for a master class of redesign in A&E to stop 12-hour waits?
(Mr Filochowski) Yes, but it is more than a master class. You have got to internalise it. We need to help people. I think we should send people who have done it to sit beside others to show how to do it. We ought to get people who are struggling to come and spend a week or a month or three months in a department that knows how to do it. That is how you learn, not just by being told it, not just by being shown it, but by doing it yourself. If you do it yourself for three months you know it can be done.

Chairman

484. Do you think you could sort Bristol out once you have sorted Bath out?
(Mr Filochowski) I think it would be arrogant and foolish of me to say I could sort that out.

Chairman: That sounds like a yes to me. Kevin?

Kevin Brennan

485. I am quite interested in targets and resources and in a fundamental question, which any of you should feel free to answer, which is should you get more resources when you fail to meet your targets or should you get more resources when you meet all your targets?
(Mr Harris) Can I give you some thoughts on that. I think it depends on whether the target is realistic. If you set an unrealistic target then you are going to skew the allocation of resources.

486. Is it possible to set a realistic target but one that an organisation may nevertheless fail to meet, even though it is realistic?
(Mr Harris) Yes, that is possible.

487. So let us assume that we are setting a realistic target for a moment�and I accept there could be unrealistic targets�what is your answer to the question then?
(Mr Harris) I think it would depend upon whether the failure was a one-off failure in one year or whether it was something more systematic. If it was a one-off failure to achieve a target in one year I do not think there is necessarily a case for more resources. If you started to find that an organisation was not performing, if you are in central government�and I worked in central government for some years�you would have to ask yourself a question: what is happening here? Whether that means then that you just pour money in I have very grave doubts about. You go back to the point made just now, you have to look at the internal operation of that organisation and say can it do better with the resources it has got. That is where the analysis comes in. To give you an answer to your apparently simple question which is over-simple is wrong. It is a complex question and it needs a complex answer.

  488. Does anybody else want to expand on that?
  (Mr Reynell) To the extent that there should be penalties and incentives, it seems to me there are plenty of other things apart from simply providing more or less money within local government. There are arrangements, there are complex formulae for determining the allocation of resources between authorities. I am naive enough to believe that that is a fair and appropriate and equitable way of allocating resources to authorities. It is then up to authorities how they use those. The Comprehensive Performance Assessment regime that we were talking about earlier does provide an incentive in the form of a degree of freedoms and flexibilities for authorities who get a high ranking. That definitely is an incentive in addition to the boosts in morale that Jan has been talking about. For authorities that are performing less well, the disincentive is the publicity, then there is the galvanising effect that that can have on the organisation, and the particular forms of assistance that can be provided to help organisations to change. In local government there is now an agency similar to the Health Service Modernisation Agency, the Improvement and Development Agency, and I am pleased to see that the government is allocating additional resources to that agency to do more of exactly the sort of things that Jan was talking about. Simply allocating more money to an authority because it is performing well or allocating more money to an authority because it is performing badly, on the face of it, it might need more resources to improve its performance, runs, it seems to me, the very great risk of distortion of resource allocation processes.
  (Councillor Bees) After all, the services are not going to be provided by another local authority here, we are going to have to carry on and provide services in Bristol, and penalising us seems to me to be somewhat crackers if you are looking to try and improve the services that are delivered. It is a difficult enough task and there is not a level of evenness across all of the services in very big authorities like Bristol. One of the things that we very clearly need to do is to prioritise the services that we want to improve and to move our own resources into making that happen, and that is something we are doing here now. Help and advice is much more important than personalities it seems to me.
  (Mr Filochowski) I think there is a complex answer to your question. Jonathan got us off on the right note. What I think it is important to distinguish is the need to recognise failing management/failing organisation but not as a response to that to punish the people who are served. If I could just offer a slightly whacky philosophical comment. I have come to the view having seen a lot of failing organisations, that it is a particular characteristic of British public service and elsewhere, that when organisations start to fail, and I think there is some objective failing to be detected, we tend to be in denial of it until long after that failing should have been detected and something done about it, and if we could get ourselves to deal with it when the failure is relatively marginal we could vastly improve and put things right quickly. It is just that it is so shaming and there is a culture of shame not to admit it. My experience has been, once I realised and I saw it happening again and again, that people only recognise failure when an organisation has gone into serious free fall. The other part of it is that we then at that point develop a predilection for punishment, and punishment starts to become an end in itself, and the punishment I have seen is preventing organisations that have failed from recovering so quickly, so I think there should be a quicker recognition that they have been hit enough, what has been done needs to be done, they are now recovering, and it is time to give them resource or whatever it might be. I think it can work both ways. I do not know if that makes any sense.

489. To what extent do you think there has been sufficient of a cultural change to be able to accept and recognise failure in the National Health Service, for example amongst, shall we say, consultants and so on to make sure that something like the Bristol children's hearts' scandal does not happen again?
(Mr Filochowski) I was talking about organisational failure but I do think it can apply at any level to individual failure. I presented this to some consultants and they said that is exactly what it is like when an invidual fails, which is quite interesting. I think we are getting better at it. I think we were very bad at it because professional self-regulation effectively excluded scrutiny by management and management boards and maybe governments in the past, certainly that was the case when I first got involved in the Health Service. I do think that the Bristol case was a wake-up call and it has had profound effects on the way clinicians are prepared to be self-questionning, and I think that will continue. Sometimes there are people who are not prepared to be questioning enough but also we often go to the other extreme of seeking to punish people who have made an honest mistake, when what we should do is help them.

490. So would it be fair to say then that there are circumstances where putting more resources into a failing organisation is appropriate?
(Mr Filochowski) Absolutely.

491. And also giving more resources to successful organisations, depending on your diagnosis of what is causing the failure?
(Mr Filochowski) One of the tasks we have as public sector managers, maybe everyone including politicians, is to put the best face on the organisation that we are batting for. My experience is that you make a good case, if you are any good at it, for more resources for an organisation that needs to come out of failure as well as for ones that are succeeding. I believe I have done the former as well as the latter.

  492. What do you think of the philosophy behind foundation hospitals?
  (Mr Filochowski) I think it is a reasonable one�to give freedoms where you feel they are deserved to enable people to provide a better and better service in the confidence that they will use those freedoms well. It certainly would be my hope that they would be extended and as someone who is currently in a Trust both perceived as failing and I understand is going to be franchised as UBHT, I would take the view that it is enough of punishment. If we are putting in a new franchise team, why do we not give them the same freedoms as foundation hospitals? We believe the team has got the skills, we do not want to punish the people, so should we not give them the freedoms if we want them to succeed?
  (Mr Harris) Can I add to that, not in health because I know nothing about that at all, but in education, and look at the case of failing schools. We have had relatively few in Cornwall but we have had a few. The reason we have had relatively few is because we have put quite a lot of effort into prevention rather than cure. When you talk about extra resource you have to distinguish where those resources are going to go. Sometimes it is appropriate to put resources into the school itself. In some other cases we should put resources into the preventative work, the target setting work and into the analysis of results, that Bristol is achieving and use advisers from the authority or outside to work with the school management. You do not necessarily change the resources going into the base unit but you do put more effort into preventing failure rather than to correcting it when it happens. That is why the question of do you put more resources into a failing or successful organisation is quite complicated because it depends where you put the resources as well as how much you put in.

Mr Hopkins

493. I must say the one insight I shall take back this afternoon from what Jan Filochowski has said is this resistance to accepting that an organisation is failing. It is a very British characteristic. British industry for years refused to face up to the fact that we were not doing well. In education it has taken years to accept that we have not been performing well, particularly for the less able. We are now being shocked in some spheres. It seems to make the case in a way for pretty rigorous inspection from outside and some pressure from outside. I am being somewhat of a devil's advocate but you say that in your own organisation, the Bath Hospital Trust, when you went there they had been aware for years there was failure but they were not able to change. It was only when the external pressure was put on that it shocked them into change, and then you came along.
(Mr Filochowski) I did not mean to quite say that. I think it was evident when I arrived that they were struggling to get out of it, that they were in a deep fix. That had become crystal clear. You only had to read any national newspaper or turn the telly on to know that Bath was not exactly flavour of the month. I was talking about relatively recent perception. I think people's perception within an organisation probably crystallises just like outside monitors' perception. People do have a sense of dissatisfaction in an organisation if it is not going so well but they are rarely able to crystalise it and identify what it is. In my experience it needs some precipitating event that validates it and says, yes, I was right but it is a bit of a hindsight thing, I was right. So, yes, people say, "I knew it was wrong for years", but I do not think they had actually formulated that in a clear enough way.

494. But they muddled along and people were obviously not being treated.
(Mr Filochowski) But people feel powerless. If the prevailing view is that things are okay who are they to say that they are not?

495. A second question, I was somewhat surprised when you said you did not think we could simply transfer methods across from one organisation to another. It has been fairly well established, you have done it yourself, you have got one trust going well so could you not have simply transferred your experience from that trust to Bath?
(Mr Filochowski) I did not use the word "simply". You do not simply transfer them, you complexly transfer them. It is quite an undertaking. I have been able to do it much faster in Bath. I do not wish you to get the impression that we have sorted out all the problems, we have not, we have sorted out a number of problems and it has taken six months. I have brought in a completely new team using techniques I know about, getting organisations to adopt them and actually fundamentally motivating an organisation afresh and getting it to believe in itself. So you can do that but I have come in with a whole team and it is a new broom sweeping clean.

496. Are there techniques of best practice which are fairly well established now which could be applied across the whole of the Health Service to advantage?
(Mr Filochowski) There are some. I think the question is what quantum of change what quantum of skill do you need to bring them in. What I am suggesting is bigger than people think it is. It is not just, "Here is the envelope, off you go and do it", and it may not be as extreme as the situation I have been in, but I think it depends on the case in question. That was behind the point I was trying to make. If we could recognise relative failure earlier in a less blameworthy way and say, "You are just not coping. We are not going to hang, draw and quarter you but you are not coping, are you? If you turn away from us you are going to go into abject failure. If we can accept that together we can give you the amount of help you need now and then instead of veering off a little you will be back in the bunch performing properly, but you need some help, can we agree that now?" It is unbelievably difficult to do that. If we could establish a way of doing that I think we would do better.

497. I accept that and I know that people hate to lose face and you want to do it in a supportive way, but is there not another characteristic that some people just do not like change? I have come across people who say, "Oh well, it may work in Germany but it would be inappropriate in the British context", whatever that means.
(Mr Filochowski) I think they do. A lot of my recent learning was in America not here, but the science of change is an ill-understood science. Probably the greatest proponent of it was Machiavelli and I think he well understood the difficulties of change. I think The Prince is all about how to tackle change. I do not want to be too didactic but I would thoroughly recommend a book to you all called Diffusion of Innovations which has spawned a whole science of how change is achieved and how it fails to be achieved. I do think that should be in the skills-set of leaders, understanding what the difficulties to change are and how you bring about change. And part of that is understanding where change is not going to take root. It is not that it automatically will if you have the right skills and the right approach. Sometimes you have got to say this one will not work, we have got to try something else and I think that is part of the skills-set.

Chairman

498. I am terrified about the headlines in the Bath Chronicle.
(Mr Filochowski) Saying "Resigns".

499. No, "Machiavelli is my mentor"!
(Mr Filochowski) He is a much misunderstood and maligned guy, in my opinion. That is probably even worse as a headline!

Mr Hopkins

500. One question to the local authority in Bristol. You obviously have had an unhappy time. You have been judged to be not performing well, but before the external pressure came upon you, were you aware that you were not performing well compared with other authorities?
(Mr Reynell) I think we are back into the subject of appropriate targets and inappropriate targets and how they are used, the role that they can have in giving focus to activity and galvanising change. Yes, if we are being anecdotal about the circumstances of the City Council, the City Council went through substantial restructuring two years ago, recognising that the pace of improvement in service delivery was not what it should be. The inspection process we have been through most recently has validated the process of change put in place and has highlighted the fact that the organisation has a significant way to go. The existence of national indicators of performance and the fact that there has been a regime of external inspections delivering judgments has helped to inform that process but it cannot be the be-all-and-end-all of that. Comparing local authority experience with what we have heard about the Health Service, getting the right balance in particular circumstances, the point at which pressure becomes bullying and potentially counter-productive, the point at which external assistance becomes so intrusive that it absorbs so much of the organisation's energy simply dealing with external intervention rather than moving the organisation forward; that is a difficult balance to achieve. It is one that different inspectorates and different government departments handle in different ways. In those which have had the greatest experience of that form of engagement with local public agencies, one has seen the approach evolve, for example, at the Department of Health and Department for Education and Skills. I would say that of the range of government departments that the City Council deals with they have a more sophisticated and more developed approach than some of the other government departments, which reflects the amount of time that they have been involved in this sort of process. Part of that does involve forming a view as to what sort of assistance is going to be helpful in what sort of circumstances.

501. So there was not a real sense of alarm before you were publicly criticised?
(Councillor Bees) Let us understand the Bristol context. It has been a unitary authority since 1996 and it took over social services and education at that time. The two services which we are most criticised for are social services and education. Bristol spends 12 per cent of its SSA on education in the city. It used to be part of Avon and Avon invested very heavily outside of Bristol and did not invest very heavily in Bristol. Going back to an earlier question, if you are spending a lot money on a service you might think you would get a good result, but we have not, and we have been struggling very valiantly to try and change some of the things that we have realised were wrong with the education service in the city. We have got too many spare spaces in a lot of schools and we have had to close schools down. We have closed three secondary schools in the city. I am a local politician and one of them was in my ward last year just before I came up for election. We still closed the school. They are not easy things to do. Closing big secondary schools on big estates is not the simplest of tasks. We have amalgamated 18 primary schools and we have done this in six years. We have realised we have got to do this type of work. It is a precursor to our results becoming better but it has not made that change as yet. We do very fervountly believe that we are doing the right thing. Everybody else tells us that we are doing the right thing but it will take time. Anybody who believes that you can change these quite complex organisations�There are 160-odd schools and we have got 19,000 staff in Bristol. It is not a small organisation. If there is a magic bullet please shoot me with it.

Mr Hopkins: We have had exactly the same experience in Luton, Bedfordshire.

Chairman

502. We had a useful visit to one of your secondary schools and I think we were very impressed with the management of that school. They were telling exactly the same story about the expectation that there would be a payoff from this work some time down the line.
(Councillor Bees) Politically it has been tough going, if I can jump into the political arena. With a majority of two in the city we came to close to closing two primary schools, which the Labour Group with a majority of two had decided. One of the reasons we get hammered from outside to some degree was that two of our own members did not vote for it and we did not get it through. That is not showing a lack of commitment by the majority of the politicians to do something in this city. The bloody facts are that some of these things are extremely difficult to manage.

Chairman: This is the moment to turn to a Liberal Democrat. Annette Brooke?

Annette Brooke

503. I will not rise to that bait! I want to ask Jonathan Harris some questions. Clearly you do not like an unrealistic target but could you tell us what your general views are about the current regime of targets in education and how would you like it to be operated?
(Mr Harris) No, I do not like unrealistic targets. To make a couple of points first. I think the current regime is too narrow. In many cases we measure what is easily measured rather than what is important within that and we need to develop a broader basket in primary and secondary education of the things that matter as children grow up and go into adult life. That is the first point.

Chairman

504. Can I interrupt on this first point because Jan told us, and it was a compelling point, that one target is best and if you cannot have one, you should have two or three, and you are telling us a broader basket. Which of these is right?
(Mr Harris) It may depend upon the circumstances. Maybe health and education are different. My point is this: if you just measure a child's ability to read and write you are not measuring his ability to live in the environment of the 21st century. He needs to be able to read and write of course but you need to know whether he can socially interact with other children and he has a broad education and whether he has the knowledge and the skills needed for the future, so I would go for a broader not a narrower band. I do not know how that compares with health because I do not know anything about health, but that is what I mean by a broader basket.

Annette Brooke

505. Would that not be even more difficult to negotiate with the DfES?
(Mr Harris) Yes it will be difficult in two respects, firstly, agreeing what the baskets should be and, secondly, agreeing how the measurement of each individual component should be made. That does not mean to say you should not do it. It is about philosophy and belief about what is right in education and our view about targets. My view is that we over-concentrate on a small number of measurable things. That is why I think we should search over a period of time for something that is far more relevant to what children's needs are.

506. Right. Is there not scope for the local education authority to do that within perhaps a slight slackening off from the centre, because the point is made that reading and writing and arithmetic is most important?
(Mr Harris) The answer to your question is yes. I have not noticed, I have to say, a slackening off from the centre, perhaps I have missed something.

507. If there was?
(Mr Harris) Yes, there is scope for that. In Cornwall we have been doing that. We have been looking at different measures and different approaches to the way that children's progress is assessed but when it comes to publication of league tables and things that go into the press, the national things that government requires us to publish, those are things parents look for.

508. It was a view that came forward from David Hart that once you had reached a certain level education authorities and schools should be given more freedom.
(Mr Harris) Possibly, I do not wholly agree with that because I do not agree totally with absolute targets. My view about targets is that we should be looking for continuous improvement and so consequently if you reach a particular level of achievement, fine, well done, now let's go on and see if we can do better. If you get 95 per cent of youngsters with five A to Cs, why not go for 96, a little bit extra, a little bit more? I do not agree with the concept that you reach the target and after that it is okay.

509. I do not think that was quite what was said. I think what was said was we have had a big bang effect, it has shaken things up and we should have confidence in teachers' professionalism after a certain point.
(Mr Harris) That is a different matter. That is a question of where the targets are coming from. Are the targets handed from the top down or are they built from the bottom up? I would agree with David Hart if he is arguing we should build them from the bottom up. This is the only appropriate way to work in education because it takes account of the children within the schools and also gives a chance for people within the school to look at what they are doing and compare themselves with other schools and other authorities.

510. That is certainly a view that is coming forward. Jan, following on from that, you sounded fairly content with the central direction.
(Mr Filochowski) Did I?

511. Perhaps you could comment on some of the specific headline targets because we have been hearing quite a lot about the perverse consequences of some of the targets.
(Mr Filochowski) I do not know if you can help me by being more specific about the ones you feel have perverse consequences. I can speculate.

512. Waiting lists�perhaps the more seriously ill are not dealt with in the most appropriate time period because it is easier to clear minor operations.
(Mr Filochowski) I think you can indeed choose the wrong target. I do not think the government is automatically going to choose the right target. I was not being sanguine about that. For example, I think the emphasis which we had in the first Labour administration on waiting lists, the number of people waiting did actually lead to some gaming in the sense that people would meet the numbers target but were perhaps not doing enough for the more seriously ill because that way they could meet the targets so, yes, I think target setting can produce gaming and I think if we are to develop a regime of important targets then we have to improve them. I think waiting times is a much better measure. There are ways in which people under pressure start to game those as well. If you are trying to develop a system you have got to identify the ways that perversity is coming out and remove the incentives for the perversity to continue. One of the hardest things, but I think absolutely right, is there have been a number of instances where people have been manipulating or concealing the real figures and it is very clear now that anyone who does that will immediately lose their job. People were doing some of those things in fear but I think there are very few, if anyone, doing that now, not just because they have become more moral but because the consequences of it are so severe. Yes, I think at times they are perverse but I suppose I am enough of an optimist to believe that perversity can be and will be worked out of the system. I think the time patients wait is a really good measure of whether we are providing a good enough system, and part of "good enough" is whether we are giving enough resources. It is not just about competence, it is about resources, it is a measure to the public and to politicians to say if the waiting time is this long we cannot have invested enough in this particular area.

513. We also heard this morning that the waiting time is perhaps defined by where we switch the clock on.
(Mr Filochowski) Yes, you can cheat on that as well.

  514. I suppose as long as everybody is playing the game and they catch on at the end of the day, you can make fair comparisons. Is there a slowness in terms of when people put the clock on, the same as registering pupils at school when they are late?
  (Mr Filochowski) There should not be but at times there has been. People have lost their jobs not a million miles away from where we are now speaking for manipulating that clock. I think it is right that they should. It is cheating, you are recording patients' experience as one thing when it is actually another, but the fact that those things go on does not seem to me to discredit the principle.
  (Councillor Bees) Can I perhaps disagree slightly on the education targets. They do seem to me to be something that is extremely useful that local people do pay heed to. The attainment of five A to Cs, the performance at all the key stages have become very important in schools. I have already said that we have closed a number of schools in Bristol and we closed them on the basis they were very poor-performing schools. They were in areas which were represented by the Labour Party but we still closed them and we closed them on the basis of the evidence that we had. I am not saying there could not be a more sophisticated or there could not be a value-added arrangement, but that seemed to help us make those decisions. It was not popular.
  (Mr Harris) Please do not mis-understand what I said. I did not say we should not use five A to Cs as part of the basket of measures, I said the basket needed to be wider. I am not saying that particular indicator is necessarily a false one, of course not, I am saying it should go beyond that to five A to Gs for example.

Chairman

515. I am not trying to get an argument going, but you said at one point that you were against centrally imposed targets and that you were embracing the bottom-up model. Are you really saying that you do not think any targets should come down from the centre?
(Mr Harris) You are trying to goad me into something, I suspect. My feeling about it is that it works far better if you work from the bottom up towards an aspiration the Government may have. My criticism of the education targets, particularly at key stage 2, is they have started at the answer and said: how do you get to the answer? If it is impossible to get to the answer, then you are not going to achieve it. What do we want targets for? The purpose I think of setting targets is to motivate staff to perform better. If you do that you are saying what do you want the targets to be. If you go back to the One-Minute Manager, not Machiavelli, he was the person who invented the SMART objectives�Specific, Measurable, Achievable, Relevant and Trackable and the A was Achievable. That is important. If you feel you cannot get somewhere you will say "what is the point in trying". If you think, "I can just about make it", you have a stretching target and I think services improve. What I am looking for in targets is the thing that makes people stretch themselves on the ground. Something imposed from above nationally which has little relevance to a teacher in a school in the middle of Bodmin Moor is not necessarily stretching her and it may not actually achieve improvement. That is why I prefer a bottom-up approach.

Mr Prentice

516. The key stage 2 target that you refused to accept from the DfES, the Department would say that is a stretching target but achieveable, you said no, it is unrealistic?
(Mr Harris) We accepted eventually the DfES's target; we did not agree to it, a subtle distinction. I think only civil servants and politicians make those distinctions.

517. And what was the process of negotiation between the LEA and the Department when there was this dispute about whether the target would be achieved?
(Mr Harris) It was a long process. We began with the DfES Standards and Effectiveness Unit's advisers coming to the authority and setting down the targets which they wished to set for the LEA. They were based upon the national targets the Government had set for key stage 2. We were told that the targets were non-negotiable, at which point I said, "Why are we here?" If it is non-negotiable, we will go and do the best we can. The Department said, "We may be able to discuss it." The discussion then went on a long time. The difference comes down to this really: the Department looked at a national model, they applied that national model to all authorities, and by extension to all schools, and said you must work to it. We turned it the other way round and we said, "Let us look at the performance of our children at key stage 1. Let us look at performance of all our schools and perform to the standard of the very best, most improving schools and then look at what that shows up as a target for each school. Let us add something on top of that as a stretching component and then aggregate that out and what it comes out as to be in terms of an LEA achievement." That was broadly our approach. We did that. We sent that to the Department. They said, "That is very interesting, has it been validated?" We said, "Not externally," so we sent it to be validated by an organisation called the Fischer Family Trust which the Department recommended to us. They came back and said, "That methodology is very sound, we agree with it. It is rather better than the DfES's methodology." The outcome for us was the key stage 2 target for 2004 was 79 of per cent of our children reaching level 4 in English compared with the DfES target of 86 per cent. I said to the Department, "Okay, I understand you have got to have an aspirational target to get towards your national figure. I am happy to accept 86 per cent but can we have a range between 79, which is our calculation, and 86? We will do our very best to exceed the figure of 79 per cent and get as high as we can towards 86." "No," they said, "We are only prepared to have a range of two points, 86 give or or take two per cent." That is where discussions finished up with ministers and my elected members. We were trying to get a range to reflect the reality on the ground. We accepted of course that ministers set global targets and they need to reflect those as well but for some reason that range was not acceptable. That is very long answer but that is the only way I can explain it to you.

518. Where do Cornwall's schools fall in the national league table? If you put them all together in a basket, are they at the top or the bottom?
(Mr Harris) I am pleased to say that we are pretty well up to the top. Cornwall is one of the poorest places in England�

519. I do know that.
(Mr Harris) Tourists think it is a green and pleasant land with blue seas. It a grey and windswept land sometimes with very grey seas.

520. That is very lyrical!
(Mr Harris) I work in education.

Mr Brennan

521. You should work for the Tourist Board!
(Mr Harris) It has children often from a very deprived background. Our schools achieve extremely well. 83 per cent of our secondary schools achieve above and well beyond the comparative figures for OFSTED and the remaining 17 per cent are as good as any other school in the country. Our primary schools generally speaking are very good as well. So our schools are good and if you add the value-added data you will find that the schools achieve very high value added. In terms of the overall achievements, we are above national averages but we are not as high as some of the more affluent areas in the country. That is why continuous improvement is important for us rather than just absolute numbers.

Mr Prentice

522. Have other LEAs had this head-to-head with the Department for refusing to accept the target, this process of negotiation, and then had it all worked out at the time? We know about Cornwall because you are here telling us but has it happened anywhere else?
(Mr Harris) I do not think so. We are the only authority that has not agreed that particular target with the Department for Education and Skills. They have had negotiations with other authorities but eventually they have agreed DfES targets. That may reflect the fact that the targets in other places are more realistic but in Cornwall's case we felt we could not accept the target put upon us.

Sir Sydney Chapman

  523. You have spelt out in graphic detail your "negotiations" with the Department of Education. You came to this point where they were not prepared to adjust the target. All the evidence that I have heard on this visit to Bristol, not just at this meeting now, is that the government departments care damn all about local situations or local specialist needs particularly in an inner city area and "what we say goes, they are tablets of targets". Is that the case from the local authority point of view?
  (Mr Harris) Do you want me to answer that in education first and pass it to the others? I am not sure I would necessarily use the language you did but maybe on a bad day I might! It is certainly the case that much of what is happening is formulaic rather than based upon local knowledge. I think the second position as far as we are concerned as an authority is that we are put in a very difficult position because if the government comes along to us with a target which they have calculated nationally and says, "Agree and accept that", we can agree and accept it with them but then we are put in an impossible position with our schools. We have to go to them and disaggregate targets school by school and they will say, "We cannot achieve this, it is impossible." I would send out advisors and inspectors to have negotiations with Headteachers when both of them know negotiation is pointless. That is why I think that sort of target setting is very demotivating and a waste of public resources and we could use those resources much better. The Department for Education and Skills have not handled this well. They have handled it in a cavalier way and put local authorities in very difficult position indeed, and it is better to avoid that by building targets that are motivating for staff and motivating for the authority.
  (Councillor Bees) We have had some difficulties when we have been looking at our stretch targets, and I think that tends to be more around which department we may be dealing with. Some of them Carew alluded to earlier. Some departments have a record of setting targets for longer. We have had some particular difficulties around our transport targets where we have been engaged in quite a lengthy discussion about what we thought might be an extremely stretching target for us but we were told absolutely we could not have that and would have to move to something else. Carew, do you want to explain it more fully?
  (Mr Reynell) The local authority engaged in a process of supplementing the range of national targets that we work to by entering into something called a Local Public Services Agreement which agrees specific local targets for 12 performance indicators, seven of which must be drawn from the national list of indicators, five of which can be prepared on a local basis. As I said earlier, the City Council has a long record of numerically-based performance management so there are quite a lot of those local performance indicators. That process involved parallel negotiations with a number of government departments. I would simply say that there were marked differences in the degree of willingness to engage in open discussions about local issues and targets between government departments. In some cases I think our view was that there was a willingness to listen to local arguments. In other cases there seemed to us to be a much more�choosing my words carefully�doctrinaire clinging on to the national targets and unwillingness to deviate to any extent. So I do not think our perception of the situation is uniform of the sort that you characterised. Our understanding is that this is a process of preparation of Local Public Service Agreements between public and local authorities. One of the reasons that the Local Government Association has been prompting this has been to encourage dialogue between the civil servants involved in setting targets for specific local authorities to keep the civil servants up to what delivering the targets actually means in local circumstances. That is very time-consuming and that has to be juggled with all sorts of other measures. As we have said before, it is something that a track record of engagement in detailed discussion with authorities about targets equips civil servants and particular departments to a greater extent than others.

524. Jan, if I can come to you. The Prime Minister said in the House of Commons very recently words to the effect that of course we must meet clinical need in the National Health Service, that is the paramount thing, but that he had no intention of getting rid, as he put it, of waiting lists and waiting times because they are important to the patients. When he said waiting lists and waiting times, of course we know the difference between the two.
(Mr Filochowski) He had no intention of?

525. Of getting rid of waiting lists or waiting times.
(Mr Filochowski) The targets rather than the actual things. That would be great to get rid of waiting lists!

526. Because they were important to the patient, to the public. I think he was speaking generically, he was talking about targets as a whole. Again, all the evidence I have heard suggests not this sweeping phrase that targets and clinical care and clinical need are incompatible but that at least some targets are totally incompatible with providing the clinical need of patients. I would like you to comment on that.
(Mr Filochowski) Compatible or incompatible?

527. Incompatible.
(Mr Filochowski) I am sure I can think of one now that is completely incompatible but I do not have to. I can think of some targets that are compatible. Let me give you a target, the Government's National Service Framework for cardiology, if you come in A&E having had a heart attack and you need clot-busting thrombolistic drugs and getting those into you very quickly is the key to your survival, and on the basis of good clinical evidence you should get that drug administered within 30 minutes of your arrival at the door, the Government has set a target of 75 per cent of patients with a door to needle time within 30 minutes. Most hospitals are missing it by a mile. My hospital Bath when I arrived were at 33 per cent. Last week we were at 82 per cent. I think it is a pretty good target and the effort we have put into achieving it is improving clinical care. It is possible to have specific targets that work alongside rather than in contradiction to clinical priorities. It is just a matter of using discrimination and intelligence in selecting them.

528. The point I am trying to make is that some targets damage or make impossible the clinical need of the patient.
(Mr Filochowski) We should get rid of those. Which ones have you in mind?

529. We have heard evidence, and I only hesitate to give it because I may get it slightly wrong. We had an eye specialist saying that because they had to meet a certain target there that the recall visits were delayed to meet another target and some people were in danger of their glaucoma getting worse and beyond repair, if that is the right clinical phrase.
(Mr Filochowski) I think there is an issue here. You could set me an impossible target or I could set you an impossible target. It is back to Jonathan's point about credible and achieveable targets. Clearly if you squeeze too hard even the best run of organisations will be unable to meet a target if you make it too hard, so I think the skill and the knack is setting achievable targets. I have heard of the stretch target terminology and there is something about targets which are difficult but achieveable. Clearly if they are not really achievable what you end up doing is making the invidious choice between two very important things. I think it is about getting the level of difficulty of the targets right. It is not always right and it would be astonishing if it always was, but I do believe in relation to access targets, after a fairly bumpy start, that the targets are now much nearer to being right�they are difficult but achievable. I think if they are achievable withoug perverse consequences they will improve patient care.

530. I must persist on this. I realise you have been in Bath since July but you were in Medway before that.
(Mr Filochowski) And one or two other places including Bristol.

531. Sure, but you must have come across a particular target being set the effect of which was that clincial care would be jeopardised. Surely, it would be your professional duty to immediately get in touch with the Department of Health and say, "Hey, this is endangering people's lives." The consequence of that target innocently made, I am sure not intentionally, is going to result in a few people dying because you have got to meet something less important in another sphere of the hospital.
(Mr Filochowski) I think it is rarely as black and white as that but certainly I believe that there are targets that are set which are unhelpful and perverse, and within limits I certainly say that. I do not write to the newspapers and say it, I make a comment as a professional through the appropriate channels in the NHS, and some targets get changed as a result of that. They do not all get changed but I do not think there is a complete blanket refusal to respond to criticisms of inappropriate targets.

532. So you feel the Department of Health is receptive to any representations you make along those lines?
(Mr Filochowski) No, I do not think it is receptive to any representations I make, it is receptive to some representations some of the time. It is a matter of judment and I am not in a position to make a judgemnt as to how effectively they respond to representations but they do some of the time and they do change targets. I am in little doubt that the move from measuring waiting lists to waiting times was because of the pressure of the continuing commentary by NHS managers and clinicians that waiting times is a much better measure of need than numbers. That was their number one flagship target.

Sir Sydney Chapman: Thank you.

Chairman

  533. We will not keep you beyond 4 pm. We have only got a couple of minutes left.
  (Councillor Bees) Can we just say something about the dificulty we have had with targets here in Bristol.
  (Mr Reynell) To give a specific example about targets. One of the targets of social services authorities is the proportion of children to be kept beyond a certain period of time on the child protection register and the objective in social services authorities is to make arrangements that make it possible to take children off the child protection register after not too long a period has elapsed. Social services authorities are assessed on a scale of nought to three stars. One of the critical determinants of the star rating is performance on that particular indicator. Bristol as a social services authority is currently a one-star authority and would be a two-star authority were it not for its performance on that particular indicator. There has been considerable criticism locally and within the Department of Health about the appropriateness of that as an indicator. Social workers have to make judgments about whether it is appropriate for children to stay on the child protection register. The existence of a threshold on that target means that social services and social workers having made judgments which are accepted by the authority has resulted in the authority overall largely missing its targets on that, ie there is a higher proportion of people staying on the child protection register for more than 18 months, as a result of which the authority is ranking as a one-star rather than a two-star social services authority.

  534. Would it be a good idea if we had some kind of arbitration, brokerage, targets tribunal? It is a serious question, that if the centre and organisations are in dispute about the credibility or achievability of targets, Cornwall for example with the Department of Education, you take your respective cases somewhere and then have it adjudicated upon. Is that daft?
  (Mr Harris) I am not sure that would be beneficial, Chairman, because I think the danger is we will start going to yet more bureaucratic time spent on discussing targets rather than discussing what is going on on the ground and what is important in schools, in my case, and in health and elsewhere. I would rather have a discussion with the DfES ministers with flexibility on their part and flexibility on mine. Over the last 12 months I have not seen as much flexibility as I would have liked and perhaps I have been used to over the years. I would rather have discussions on that basis, rather than a tribunal. That is a personal opinion.
  (Councillor Bees) In Bristol's case we would rather protect the children than just meet the indicator and get an extra star. We employ people in a professional capacity to try and make judgments and we try to back those people.

535. Jan does not worry about it because he meets the targets anyway!
(Mr Filochowski) He certainly does worry. A no-star trust with three months' notice, I certainly worried about them there. I am thinking really hard about your question because it is quite a profound one. I think probably not on balance. I think we should seek to make what representations we can where they are wrong. I think there is some dynamism in the service over time to get better ones and certainly in the NHS now ministers are at least committed to giving the setting of targets to a quasi independent body, the Commission for Health Audit and Inspection that they are intending to set up, so they are trying to respond to the criticism that they are subject to short-term political gain. I think it is moderately impressive they are trying to do that. The more important thing at the end of the day is how they are used. If they are used merely as a stick to beat people with, however good they are, I do not think they are going to fulfil the right function. Equally, if they are ignored then they are pointless. I think it is about using them to accept there is a need to change performance hopefully in a not too threatening way.

Chairman: We have brought our own bit of Somerset with us and it is appropriate that Ian from Bridgewater should ask the last question.

Mr Liddell-Grainger

536. Cornwall, I am rather intrigued. They always say a good Cornish meeting is one where blood flows over the carpet and out the door. When you came down to Cornwall how long did it take you to convince the Council that there was something fundamentally wrong here and we would have to take on the goverment to say this is not right, and did you convince them all?
(Mr Harris) I am not Cornish but I have been in Cornwall a long time and we have seen massive improvement in education in Cornwall and our schools are some of the top performing in the country, as judged by OFSTED, so we started from a position of some strength. It did not take me any length of time at all to convince the people who mattered. When I showed a number of examples to both elected members and Headteachers, they said, "I agree that what you are suggesting is right." I have had total all-party support from Labour Conservative, Liberal Democrats and Independent members�and the Independent group in Cornwall is a big one and quite wide ranging. I have had total support from Headteachers, primary and secondary. I have had a number of letters from members of the public. If I wanted to make myself really popular, it is a good way of doing it but it was not done with that intention in mind. I have had no Headteacher, no member, no member of the public saying, "What you are doing is wrong." That is very interesting. Life is not normally like that as a chief education officer!

537. That is fascinating. Can I ask finally, why are you leaving?
(Mr Harris) I am going to join an outstanding organisation in Hong Kong called the English Schools Foundation as Chief Executive and I am looking forward to that in January.

Chairman: We are leaving because we have got to catch a train. Can I thank you very much indeed for your time. Can I thank first of all Bristol and the Bristol area for the last two days. We have had a wonderful reception and learnt a lot. Everybody here has helped us. We are particularly grateful to you for coming along and giving your time this afternoon and for the instructive way you have run our whole visit. I hope we reflect some of the things you have told us in what we say to the Government shortly. Thank you very much indeed.

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MR JAMES STRACHAN AND MR PETER WILKINSON

THURSDAY 9 JANUARY 2003

Chairman

538. If I could call the Committee to order and welcome our guests this morning: James Strachan, the Chairman of the Audit Commission; and Peter Wilkinson, the Director of Health at the Audit Commission. We are very glad to see you to help us with our inquiry into public service targets and related matters. We are grateful for the memoranda that you have been able to give to us. Do either of you want to say something by way of introduction?

(Mr Strachan) I will say a few words, Chairman, if I may. We are delighted to be here. We are here to talk, as you said, about targets and what I think you have referred to in the past as "government by measurement". I think really what we are talking about is how to improve public services and these are tools: they are means, they are not ends. You have heard in some of the preceding evidence that has been presented to you that there are a number of critical balances to be struck in both the setting and the use of these tools. We can talk more about those, but one I would want to highlight at the outset is this all important central/local balance. Clearly we need a small number of centrally determined targets to ensure a level of national consistency, but at the same time what is absolutely critical is getting the balance right to ensure that there is enough flexibility to then tailor-make the local targets to actually reflect local circumstances, local needs and, perhaps equally important, to enthuse at the local level to actually encourage the innovation and the enthusiasm that is actually the driver of change and improvement. I think anecdotally we can say that we have at least as many auditors, inspectors, measurers and performance indicators as almost any country in Europe but it is impossible for anyone to say we have got better public services than any country in western European and, frankly, until we can definitively say that, we have to constantly, as we are doing very valuably in this inquiry, re-visit this subject. We at the Audit Commission, as you can imagine, have focused a lot in recent years on what drives improvement in public services and I think there are four key elements. One is ownership of the problems and the need to change. The second is focus, focus, focus�a sustained focus�on what really matters. The third is the capacity and the systems to actually deliver that improvement. The fourth, of course, is almost as old as time itself, it is how change is made permanent. Unless you actually build in change management into the fabric of everyday management, it tends to be a very short-lived phenomenon celebrated at the end by the end of the change management programme party, and that really is very short-lived. I think targets can play a role in all these areas. They can clearly set higher expectations and reinforce the need for change. They can certainly encourage focus. They are certainly good tools for monitoring and, if structured properly, they can become part of the fabric of everyday management. But the problem, as I am sure you have focused on already, is that they can actually become real obstacles to change, because if they are inappropriately set, if they are unrealistic, if they are not owned by the users, they can create huge resistance to change. There are far too many public bodies we hear complaining of drowning in performance indicators. Far too often the indicators measure the wrong things and if you measure the wrong things you get huge focus where there should not be focus. Far from becoming an integrated part of day-to-day management they can become a very distracting add-on and irritant. I think this focus in the public sector on improvement and tools for improvement is extraordinarily welcome. I think we as regulators/watch dogs need to be very careful to focus on our own value for money to ensure that we get maximum regulatory bang for our regulatory buck, and that brings in very much the idea of strategic regulation which we can talk more about because I think strategic regulation is the very underpinning of the new comprehensive performance assessment regime in local government, which I am sure you will want to discuss. To conclude I would just make two last points. If I were being asked, "That is all very interesting but what if you were advising the government, what are the next steps, how would you actually get improvement in this area of target measurement?" I think what concerns me�and I say this particularly coming from as much a private sector background originally as wearing the hat of my current job�is that there are two very severe skills' shortages, one at the centre and one locally. At the centre there is still a real paucity at the senior level of people who are involved in the setting of targets, a lack of real world delivery experience and this is shown time and time again. And, secondly, related to that, is the fact that if you have a very controlling centre you have a tendency not only to set the "what", but also to get far too much involved in the "how". And while they are extreme examples�and I know you have seen some of them in previous evidence�of literacy of and numeracy, the classics where you need a revolution, and certainly the centre does need to become involved in the "how", I would say those should very much be the exception not the rule. The second point is at a local level. At the local level often the experience of real world delivery is there, but what is not there is a real understanding of both the strengths but also the limitations of these tools and, of course, we see far too often that the mechanism which is purely a means, becomes an end in itself. It is not a learning tool, it is the actual object of all activity. That is very dangerous. I think I would finally say that any tool requires training to be used effectively. On the one hand, beware of public sector workers who blame their tools, but at the same time quickly, and in the same breath I would say, for goodness sake do not then name and shame them, be sympathetic to their needs, to help them, to enthuse them, to get them to understand better and quickly how to use these tools much more effectively and to use them as part of evidence-based management. That is all I would like to say by way of introduction.

539. Thank you very much indeed. If I could just take you up on one or two of those things that you have said to us, what I quite want to know to start with�and this relates to your latter remarks�is what you think the work of the Audit Commission can tell us about how in practice targets are operating in the public sector now because you say that the job of the Audit Commission is to look at those things that bear upon improvement in public services, so obviously the question is to what extent is the target regime at the moment contributing positively towards improvement in public services or to what extent is it, which is what you said, a danger and providing an obstacle in some respects to an improvement strategy? What have we learned from the Audit Commission about this?
(Mr Strachan) A clear example to focus on is local government. If you look at the shift from best value to comprehensive performance assessment, I think that shift is a recognition of the fact that by sometimes almost burying people in performance indicators, so that they really have no idea where the real priorities lie, you actually produce a counter-productive effect. Moreover, what we constantly need to ask ourselves is what are we trying to achieve here? To start at the end and work backwards to say what is the area we want an improvement in? Why are we not actually seeing that improvement? What needs to change, and to create tools which will trigger that change? If I look at my private sector experience there is not enough understanding in the public sector that the idea is not to come up with a comprehensive set of performance indicators which covers everything under the sun. The point is if you are trying to turn round an organisation or significantly change it, you need to achieve a number of key successes in a number of key targeted priority areas. If you do that you create a culture, you create a management mechanism which can achieve improvement and in the train of that, so much else follows. So what I think I am saying here is that we have learned the lesson that the universal mind set, that I think is typical within the public sector and Civil Service, is very dangerous. We need to target not only in line with government to have a small number of headline priorities, but we also need to target to ensure that there are some catalysts which, in a failing organisation in particular, will actually start that process of change and feeling within the organisation of what success is like.

540. Thank you for that. What I want to just press you on, if I may though, is you talk about burying people in targets and in performance measures; is the impression that you form and the Audit Commission has formed that we have now reached the stage where people are being buried in these things? I ask that on the back of a report that you recently produced looking at the experience of working in the public sector, which would seem to me to point strongly towards that conclusion.
(Mr Wilkinson) The number of targets should reflect the number of priorities of, let us say, the government, but also of the local delivery organisations. It should be the incarnation of those priorities. If there are too many people being asked to do too many different priorities, and trying to make progress at once on too many different fronts, what we get back from that particular piece of work and other work, is that people at the front line say they have too many priorities imposed on them and too little flexibility to respond to those in accordance with local circumstances and local needs.

541. Let me press you to get the precise answer. James Strachan speaking at the beginning said he thought that there should only be a small number of central targets and how important it was for other people to own targets locally. What I am asking you on the basis of the work you have done is whether your conclusion is that there are too many centrally imposed targets and that is having a damaging effect on improvement across organisations?
(Mr Wilkinson) We have not formally published a conclusion yet. From the work that we have done it would be easy to suggest that the balance needs to be rebalanced, so that there is a clearer focus in terms of the government's priorities on the outcomes it wants to achieve, and more scope and freedom for people delivering the services at local level to determine how that is done locally, but also scope for them locally to recognise where there are specific local needs, for example with their particular population.

  542. That sounds to me a bit like a yes as an answer but that is probably as far as we are going to go on that. Another thing that you discovered, as I understand from reading your reports, is that you have drawn attention to some of the perverse consequences of targets, what we would call cheating, particularly in the Health Service. Could you say more about what you found on that front?
  (Mr Strachan) I think, as has been reported in the press recently, we are right now in the middle of a number of spot checks within the NHS on waiting times, and some of that press reporting has been highly speculative and somewhat inaccurate. We will be formally publishing our findings on that in early February but I think the part I would draw attention to is that rather than people simply fiddling, there are a number of reasons as to why data can be inaccurate and Peter can take us through that.
  (Mr Wilkinson) The good thing, Chairman, is that the focus and the use of performance indicators is making people look very hard at the evidence upon which they are making managerial decisions. We must bear in mind that is one of the good things about all of this. However, when people do that, they look at their own performance and suddenly start paying attention to what it is they are reporting outside, with a different perspective. That does lead some people�and there is some evidence of that from the NAO's report to the Public Accounts Committee�to fiddle the figures in terms that you and others have used. Also that is, if you like, the equivalent of tax evasion. But there is also a tendency to look very closely at the definitions and the way that indicators are defined, and in some cases to properly adjust what they are reporting to reflect more accurately what they are actually doing, but also, of course, there will be a tendency for some people again to push those definitions to the limit. What we are doing as a result of this process is learning about both the strengths and limitations of measuring of performance, and that over time we will shake out the tendency to game because we will get much better definitions and much better understanding of which measures are appropriate and which ones really work as a foundation for improvement. Of course, there will always be the need to make sure that you cannot have people who are fiddling and that is why we are in the process of working with the Department of Health and the Home Office to look at ways in which information gets reported to make sure it is accurate and useable for all of its purposes, including accountability and evidence-based management.

  543. I was referring to the NAO Report, not your report. Let me move on slightly to an area you mentioned just now, which is that another criticism that is often made is that a target regime gives emphasis always to that which is measurable and indeed it is only that which is measurable that somehow becomes valuable to organisations, and yet much of that which determines the value of organisations is not measurable and so you are discounting the unmeasurable. Is this not a particular difficulty in the health work that you have been doing? We have taken evidence on this and done some visits to the South West and a lament from almost everybody is that the performance assessment that goes on through you on health bodies does not measure the things that people who use health services really want to know about, which is are these people going to kill me or cure me�outcomes�and yet this is not in your measured reporting at all and it may be there is a trade-off between things that contribute to good health outcomes and the kind of things that you are measuring. Is there not a real problem there?
  (Mr Strachan) I think you raise a very important point. I think and I hope that in working with Ian Kennedy and CHAI we can share some of the lessons that we have learned through comprehensive performance assessment to ensure that the new regime in health actually does take much more account of a) outcomes and b) subjective judgment, because I think what we found with CPA is that for a long time we have known that such general things as strong leadership and the ability to create a plan and so forth are absolutely essential to running a local authority properly, but that has never really been part of the assessment, and because it has not been part of the assessment, it has not been perhaps focused on as much throughout all local authorities as it should have been. What we have done with CPA is on the one hand try to reduce the amount of duplicated oversight so that we say OFSTED and the Social Services Inspectorate, do their jobs. We take that data, but also take an overarching view of the performance of the authority, and we do that not just by us coming from outside and taking a view, but we do it as a combination of that external view, self-assessment and peer review. Of its nature that involves a considerable amount of subjective judgment and yet, interestingly, when councillors in offices were asked at the end of CPA was this of benefit to you, two-thirds of them said it was very definitely of benefit, very definitely this will help us improve. Almost all of those two-thirds pointed to that subjective element, surprisingly, because very often those very people have been complaining about the subjective element and saying no, no, no, we need to have only strictly measurable targets. So we have a lot of lessons we can learn from that.
  (Mr Wilkinson) Could I pick up on something that we touched on earlier? I would fully accept that what the public is interested in is outcomes, but also some of the measures of their experience, for example how long they waited in an accident and emergency department is of great interest to the public. There is a distinction between ways of measuring and reporting that, which I think the public is very interested in, as is the media, as are politicians, and the way in which those responsible for providing services need to change them to achieve those outcomes. A lot of the work that we do tries to get beneath just the headlines, and what needs to be understood is the processes that are happening and what needs to be measured, so that people can change in particular local circumstances the blockages or the difficulties that they face. A real example of how we are trying to develop this notion is through something called the acute hospitals portfolio. About a year or 18 months ago we published a national summary of waiting in accident and emergency departments which showed, at a national level, the extent to which patients were waiting. However, underneath that there is a wealth of measurable information for every acute hospital in the country which shows such issues as demand and the case mix of patients going to that particular A&E, and the extent to which they have nurses and doctors and cubicles which are able to deal with the patients coming through and what happens to them subsequently. What that is is a useful tool for evidence-based management for individual A&E departments to look at where they have particular problems that reflect their local circumstances.

544. This is a good illustration of the question I asked and other colleagues will come back to it. At the moment you can have someone who waits for a short time and gets appalling treatment and being reported as a good institution, someone who waits a long time and gets outstandingly good treatment is reported as a bad institution. Is that a reflector of how people themselves would evaluate institutions?
(Mr Wilkinson) I think what you are asking about is the Department of Health's star rating system; is that where you are?

545. That is the concrete example of it, is it not?
(Mr Wilkinson) The public will assume that any form of rating system reflects the areas of performance which the public are interested in.

546. No, it does not because as reported in local newspapers it says this is a good hospital or a bad hospital. You are saying, James, in relation to local government that because of the measures that you are using you feel justified in saying, as I understand it, that these are good authorities as opposed to bad authorities. What I am saying to you is on the health side you cannot say that because the measures that you are using do not evaluate the quality of treatment.
(Mr Wilkinson) In local government, the CPA model came very clearly from an understanding of the way in which users of the services experience them. There is a close correlation in the work undertaken by MORI between CPA scores and public perceptions of services. We do not run the system by which NHS bodies are rated, and therefore we have not been drawing those sorts of conclusions about NHS bodies. We do not say that a particular one is good or bad. We look at particular services within them.

547. How it is reported is entirely that. One final question and then I will hand over to colleagues. James, because of your private sector experience which you have referred to once or twice, when we had Lord Browne from BP a few weeks ago talking about targets in the private sector in a good company like BP, he said that it is often good to fail, so it is good to set targets but it can be very good to fail to meet them. It has provided a focus but you learn things along the way, you are a learning organisation, so it is good to fail. If you transfer that over to the public sector, that model does not work, does it, because there is no minister who is going to stand up in the House of Commons and say, "We missed our target but, my goodness, it was good to fail." It just does not work.
(Mr Strachan) I think there is a distinction. First of all, I would totally agree with Lord Browne that the man who makes no mistakes makes nothing. That is a lesson that could be learnt all too frequently in the public sector. Secondly, in the private sector there is a full understanding that you do not meet all your targets and if you meet 75 or 80% of them you are doing extraordinarily well. That goes back to my skills' shortage point at the beginning. It is because there is a clear understanding in the public sector that these are merely tools, devices, catalysts to point you in the right direction but they are not the end in itself and that is the lesson that we just need to constantly reinforce. I think there is a dire need, you cite the case for the Health Service, to train people in how to set these targets, and to train people in how to use them. I do feel that your point about ministers not wanting to stand up in the Commons and admit to not meeting a target, first of all, the fact is they do, they have, they have recently, they will in the future. They may not like it but if they were able to define the language and debate publicly in a rather different way, they would not feel so fearful of doing that.

  548. In the private sector they may well get promoted, in the public sector they may well have to resign, as poor Estelle did.
  (Mr Strachan) There is a difference, though, between the top-level priorities that government sets and the local reflection of that. The problem, as you have heard before, in the Health Service is because there are simply far too many targets, people start assessing their priorities in terms of which missed targets will I get sacked for. That is a culture that I would say we should not be encouraging and we need to radically re-think that.
  (Mr Wilkinson) If you are going to set stretching targets which are ambitious and which people strive to achieve, by definition you are going to fail against some of them. The question is the extent to which in an area, particularly where it is sensitive, it is acceptable to set ambitious targets where you know you will not necessarily achieve it all, as opposed to setting complacent targets where you will be confident into thinking it is a success.

Chairman: That is very useful. Ian?

Mr Liddell-Grainger

549. Do you have targets?
(Mr Strachan) Do we have targets in the Audit Commission? We do and I think we could do much better. I have just started at the Audit Commission and one of the problems that I think we need to stand up and be honest about is that if we tell other people about value for money we should make very sure that our own sense of value for money is as strong as it could be, and I think it needs to be better.

550. How many targets do you have as such? How many targets do you think is optimal within your organisation?
(Mr Wilkinson) For an organisation you probably need a number of targets, in the vicinity of 20 or 30.

551. Because the Institute of Directors says in their submission that there are 48 separate targets in the Department of Health and pruning them back will enable the public to see the targets that really matter. How do you define a target that really matters?
(Mr Wilkinson) Are you talking about the Department of Health?

552. This was the Institute of Directors.
(Mr Wilkinson) I think that becomes a political judgment about what matters to the public.

553. So in other words it is up to parliament to decide or the government to decide what a target is?
(Mr Wilkinson) At a national level what the government's priorities are is clearly a matter for the government to determine and one would presume they would seek to do that based upon an understanding of what is important to the public.

554. Which do you think is more important, a local target or a national target? Let's talk about health just for now.
(Mr Strachan) On this sort of question of which is more important, I would say both are tremendously important. It is the relationship between the two that matters. I would just go back to an earlier question, very few people can focus on more than about five or a maximum of ten key areas. In the area where you were trying to provoke major change very few people can focus on more than five, so at the core of any system there have to be five or less key priorities in management. There are today in government four overarching target areas. You need those centrally driven targets, you then need a set of much more detailed local targets, which I said at the outset have the flexibility to reflect local variation and diversity so it is not a question of which are more important, it is a question of ensuring you have the right balance between the two.

555. If we look at local targeting specifically, and you have a hospital, it does not matter where, and the national target is on cancer care, but in the local hospital they do not specialise in cancer care because they have not done, can you emulate that down to that sort of level or should the target be set at a local level on something which is government policy but something they do not specialise in? I am just taking cancer care as a generality.
(Mr Wilkinson) One of the key things about an outcome, for example an improvement in survival rates from cancer, is that many different institutions will need to make a contribution. One of the key questions is what is the contribution of each individual institution? They may or may not specialise in cancer care, but they will have a role to play, and understanding what that role is in terms of how they refer people, and what happens, and what part they play in the process that contributes to medical outcomes, should allow the local management then to understand what their local targets should be to improve their role in it. It is how systems as a whole work together to provide services to the public which I think is difficult but very challenging, but also the way in which public services will most improve.

556. Would you then do a graph like you have got in the comprehensive performance assessments which you have done for all counties and metropolitans where you put "fair", "poor" or "excellent"? Would you do that for individual hospitals? Do you think that is the way to do it, to really put the bite on them through local delivery?
(Mr Wilkinson) The interesting thing about the CPA approach is not only do we reach an overarching judgment about excellent, good and fair, but for each individual place it is very clear where they are doing well and where they are not doing so well. In any complex organisation, be it a local authority or a hospital, there are some bits of it which are excellent and some bits which are not so good, and the key issue is to work out not so much what the overall picture is, but which are the bits where they need to focus attention and seek to get to that level of fine-grained understanding. If I could link that back to what I said earlier about the acute hospitals portfolio, we may get to headline indicators about how long somebody waits in A&E, but we could also teach individual departments to understand what it is in that particular place which is causing a problem, if they have one.

557. If that is the line you would see as the optimum way of going about it, who would support that, would it be the Audit Commission, a select committee or government? Would it be the department reporting back or supplying informing to, say, yourselves?
(Mr Wilkinson) The prime responsibility for providing good services is that of the people providing the services. They are by far in the best place to improve things, and the system by which we regulate or by which the government sets targets needs to encourage and enthuse them to set out the continual improvement in terms of the services they are supplying, so I would start very much at the front-line with the people providing the services.

558. But with your organisation as the overseer?
(Mr Strachan) Absolutely. If I could just go back for a second to the point about who does the improving. CPA, as Peter was implying, is very much the first step in a process. It is actually to produce a comparative baseline, but it is much more than simply saying are you excellent, good, fair, whatever. It is in the first round 150 very detailed reports aimed at each of those individual authorities. To be able then to say that while of course, as you were implying, a degree of external support is needed, the question is what degree of external support in relation to each of those 150 authorities? This goes back to my point on strategically targeting our scarce resource. Quite clearly, it has been known for some time in local government who is good generally and who is bad generally, but it has largely been anecdotal. This is the first time we have had a proper comprehensive assessment of that performance. We are now saying to a number of "excellent" and "good", relatively, you are free to go on but, having said that, some of those, as with a hospital, would have particular areas which actually are not outstanding at all, and it is not as if we then wash our hands of that authority and say "go for it without us"; we will try and work with them, advise them where they could get the best support to actually improve in those specific areas. It is a question of not simply producing an alibi, it is a question of targeting where help could be most effective. I mentioned earlier that the NHS could benefit from that kind of regulatory regime, which it does not have.

559. One last thing, you said in your submission that select committees should make it their business to access departmental targets relevant to their work. Do you believe the select committee system within the House has a large part to play in chivvying government along to achieve the targets that have been set and, where necessary, making people aware of what has been missed or opportunities that have been missed?
(Mr Wilkinson) We have no official remit to comment on or look at the role of select committees. From our standpoint the extent to which people start using and questioning and exploring the meaning of performance measures, targets and indicators is helpful and, indeed, the fact that we are looking at the overarching system and the way in which they work is also helpful. We need to set that in context. We believe all of these things are a learning experience. We have an awful lot of measures and targets and other things in this country but we are all learning about how they can best be used and the best way in which they can contribute to improvements in public services. From a personal perspective I would encourage select committees to explore those and explore them with departments.

Mr Prentice

560. You told us in your written evidence that: "Public credibility is a key factor in targets set by government", and you go on to say that: "Targets which people see as open to manipulation for political reasons feed scepticism about spin." Do you think the whole idea of targets has been tarnished because people think they are being manipulated by the government and there is too much spin?
(Mr Strachan) I think the answer is there is a danger, but I do not think that has been tarnished irretrievably. There is a need in some areas to consider quite closely what both we and the National Audit Office have considered, which is validating the target independently, because if people perceive that almost behind closed doors government has set the target, monitored the target and will report on the target, yes, there is a real danger that people will simply not believe it and I think we do have that problem to some extent in the Health Service.

561. Can you give examples of targets that have been set by the government that people simply do not believe?
(Mr Strachan) Well, as I just said, I think we have a problem in the Health Service and I think there is a scepticism about some of the headline targets.

562. There are 400 targets in the Health Service, I am just interested in getting some examples from you where they have lost credibility amongst the general public.
(Mr Wilkinson) I would need to think about that, if I may. We do not have evidence of where the public does or does not believe a particular target, I am afraid, and I would need to give that some more consideration.

563. That is disappointing because the government is bringing in this new regime and the National Health Service foundation hospitals and so on which depend on targetry, on the star rating system, and councils, hospitals and hospital trusts get their stars by meeting targets that have been set by the government, and my question was which of the 400 or so targets in the National Health Service could be put to one side, are of no use whatsoever, serve no useful purpose and so on?
(Mr Wilkinson) I thought your question was about the public credibility of them rather than which ones are better than others. The star rating system consists of many fewer than the 400. It is only a selection of indicators and I do not believe they are all targets, they are relative performance rather than necessarily targets. The other point I would make is that my understanding (and I am not party to the decision making) is that the way the government will select foundation trusts will not be exclusively on the basis of star rating. A three star rating will be a passport to the assessment process and there will then be some more judgment brought to bear. That is one of the important points because my Chairman spoke about the need for confidence in the figures and validating the information that gets published. I think there is second question around the interpretation of information. That is why we last year published a document looking at the way in which you could use information and interpret the overall performance of the Health Service. In July last year we published a developmental draft of how you might report to the public about the overall performance of the NHS and I hope we will be working with the Commission for Health Improvement and with the National Care Standards Commission people this year. That element of independent interpretation is one of the ways in which you can start giving the public more credibility and confidence in what they mean, as opposed to what they are reporting.

564. Do you have examples where targets in the National Health Service seriously distort clinical priorities and which have serious consequences for patients?
(Mr Wilkinson) We do not. Clinicians will often say that priorities are seriously distorted and one that they often refer to is the need to deal with waiting time targets. I think the question there is that those are issues from the point of view of a member of the public waiting for a particular treatment which become important to the public and in most cases these are for the non-urgent cases. We have not investigated whether or not there is severe�your words�distortion of clinical priorities, we have not done that.

565. Can I just ask a few questions about the CPAs in local government. Why is it that unitary authorities have a very low proportion of excellent councils?
(Mr Strachan) I am not sure by implication what you think the proportion of excellent councils should be.

566. I am quoting from your own document.
(Mr Strachan) I was asking what do you think this proportion of excellent councils should be. This is a first assessment on a methodology very much created in partnership with local authorities and this is the result that we see, a very broad spread ranging from superb in some cases through to failing councils. It is a spread and you would expect a broad spread.

567. I ask the question because there are different types of councils that you looked at�the county councils, the London boroughs, the metropolitan councils and the unitary authorities�and they had a different spread of excellent councils, good councils and poor councils. I was wondering whether there is anything we can learn about optimum local government structures by asking the question about poor performing unitary authorities or why unitary authorities should have so few excellent councils. That was what was in my mind.
(Mr Strachan) I think what I would stress is rather than focusing on the number of excellent councils, there is an extremely high proportion of excellent and good councils.

568. Forgive me. In unitary authorities, is that what you are saying?
(Mr Wilkinson) Yes.

569. Can I pick up one other point about staff. You say in your written evidence to us that staff should be consulted about targets. Does that always happen?
(Mr Strachan) You are talking, and I will pick that up, on unitary authorities.

570. I am still on local government, yes.
(Mr Strachan) There are two things that are not universal phenomena which need to be more universal. One is consulting staff and the other, which is related, is to ensure that these indicators really are reflective of the needs of local services. What I think I would stress, coming back to a point made earlier about how could we improve the new regime in health, learning perhaps from CPA, is the fact that in the CPA we are in a way reducing the importance of merely looking at targets and increasing the importance of trying to assess the overall capacity of an organisation to deliver improvement in public services. Part and parcel of that is to ensure that those targets set are reflective of local needs and part and parcel of that is to ensure that the staff who are closest to the customer are very much involved in setting those targets. I would accept that it is not as universal as it needs to be.

571. Just a couple of questions finally. We know that the Government has set a target for reducing truancy by 10% by 2004, I think. Were teachers, teacher organisations, consulted about that target?
(Mr Wilkinson) I am afraid I do not know that. I think there is an interesting question about the difference between saying that reducing truancy, or whatever, is a Government priority and at what level, the rate at which you reduce truancy, that should be set. What we would argue is if you are going to have a target which people providing the service actually are going to work to they need to accept the legitimacy of both the subject and the level at which the improvement is set. We cannot comment on that specific target.

572. Just one final question. It is about the Audit Commission itself losing responsibility to other inspectorates. We are going to have a multiplicity of inspectorates. Do you agree that the Audit Commission should lose those functions to those new bodies? Do you think that it is going to make a beneficial difference?
(Mr Strachan) I am not sure which losing you are referring to. If you are referring within health to the fact that we are losing a very small proportion of the work that we do in health audit and inspection, which is the National Studies, I think that is marginal. If you are referring more generally to the fact that there are so many better established regulatory bodies, Ofsted, SSI, is that what you are referring to?

573. No, I was thinking about the responsibility for housing, are you losing that?
(Mr Wilkinson) We are gaining.

574. You are gaining.
(Mr Strachan) We just gained at the end of last year from the Housing Corporation the inspection of all housing associations which actually combines with our existing capability of inspecting all social housing within local government.

575. I am getting confused. Which are the new inspectorates that are being set up?
(Mr Wilkinson) The Commission for Healthcare Audit and Inspection will take from us responsibility for national value for money studies. We will continue to appoint auditors at the local level who will continue to�

  576. Is this new arrangement sensible?
  (Mr Wilkinson) We think that the trend for all regulators is that they need to work much more closely in partnership together in order to provide a joined up regulation. One of the things, for example, about CPA which I think is very good is the way that we have worked in partnership with Ofsted, SSI and with other inspectorates to formulate the CPA. In the new world with the Commission for Healthcare Audit and Inspection and the Commission for Social Care Inspection, the Audit Commission will need to work very closely in partnership to make sure that they benefit from our local presence and from our understanding of what is happening on the ground as they then undertake their functions. It is a strong partnership that the Audit Commission will seek to establish.
  (Mr Strachan) Could I just add to that. I am less concerned about the number of inspectorates. I am more concerned about two things: one, the independence of those processes and, two, that there is a continuous striving to make them less bureaucratic and to focus more on what matters, to achieve improvement, and less upon this proliferation of target setting.

Chairman: When Gordon asked you one of the first questions about the credibility of targets, Peter, you said you would have to reflect further upon that. We benefit greatly when we can get concrete examples rather than just the general arguments. If you are able to reflect further and perhaps drop us a note, that would be extremely helpful.

Mr Lyons

577. Can I raise the question of the health service again. Would it be too late to completely ditch the question of five star rating, three star, four star rating and just look at something like the patient journey in the health service which has been advocated by the Royal College of Nursing, UNISON and so on? Do you not consider that might be a better way of measuring performance?
(Mr Wilkinson) I think the measuring and understanding of what happens to patients on patient journeys is the way forward in terms of improving their experience. However, to get to the level at which you can start measuring that you need to do a fundamental change to the way in which the NHS monitors what happens to patients. For example, typically an outpatient department will run a waiting list for outpatient appointments and then the patient will move on, if necessary, to an inpatient waiting list and you would need to start measuring what happens to individuals from the GP through the different departments and back home into the community. That is quite a radical change. I think that is the way forward. In particular a lot of people experience that public services go wrong when they fall down the gaps between the silos of different public institutions. That is different, though, from holding individual institutions to account for their contribution and their performance. I would not argue that it is an either/or, I would agree strongly that the patient experience, the patient journey, is the direction of travel that we need to go down. That is the way in which the Modernisation Agency works, for example. It is actually the philosophy that my organisation has been developing in terms of the way in which reports might go to local people about performance of systems, but it is quite complex and would require quite a degree of change in the way in which public services view individuals.

578. If all of you feel like that why do we not see any publicity of that in effect as an alternative to the systems that we have at present, some emphasis on the question of patient journey, looking at the journey from acute trust or primary care trust?
(Mr Wilkinson) I think we have done quite a lot as an organisation to talk about these things. We did a study on ENT last year which looked at those issues and we became quite well known for what we said about looking at the case of young people who get into trouble with the law, we called it Misspent Youth, looking at what happens to those individuals as they go through an offender's journey in that case. We have more recently said something about victims in the criminal justice system. We have done a lot of work in terms of the way, for example, that older people are cared for by various public organisations. I think we have been feeling very strongly that this is the direction of travel for a number of years and have done a lot of work in that area, but I think the level of publicity though tends to focus around the performance of individual institutions much more.

579. You can see the contradiction, can you not, in the point the Chairman raised? You can sit in accident and emergency for a very short time in some hospitals and that might be in terms of a performance indicator a very good hospital, but if you then sit in x-ray for three or four hours it demolishes the case for that hospital to claim that it is very effective and very efficient. What do you say to that?
(Mr Wilkinson) I think that is absolutely true and I saw that Dr Morgan when she came and gave evidence to this Committee talked about the cancer two week wait and how that is all very well to have as a target but it is what happens next in terms of getting the treatment and the outcomes of that treatment. I think all of that is an argument not for saying that you should not, for example, have the cancer two week wait, because if you have been close to someone who has been referred with a lump in her breast to one of these things, getting to the first point of diagnosis within two weeks is a phenomenal thing from the point of view of that patient. Therefore, measuring that is clearly a priority right now and important, but that does not stop you from saying that you also have to have a focus put on the rest of the system and what happens next. I would entirely agree that is the direction of travel, but it does not undermine the importance, certainly from the patient's point of view, of getting to see a doctor and getting the first judgment on the good or bad news very quickly.

Chairman

580. I will come back to John. When Dr Morgan came�before we lose that point�from the NHS Confederation, she said in her evidence that she thought that the private sector auditing that was being done by the Dr Foster outfit was far better than the stuff being done by public sector auditors because it came from the patient side and it was attempting to look at patient outcomes, quality of treatment. She said that is what patients want to know about, not about these mechanistic measurements of things that you can just measure.
(Mr Wilkinson) With respect, I do not think she specifically referred to the public sector auditing. I think she was referring much more to the use of performance indicators and measures within the NHS as a whole. What Dr Foster does, very interestingly, is Dr Foster is very careful about the way in which they interpret what the performance measures mean. That was a point I made earlier when I was referring to some work that we have been doing to try to bring independent interpretation to bear in a way that is publicly credible. I think Dr Foster has been very successful in using some information that is currently available and interpreting it in a relatively limited field. Personally, my organisation is keen to make substantial progress in interpreting information in ways in which the public understands and which has credibility but which does not alienate the providers, is seen to have credibility with the providers of the services, because those are the ones who are in the best position to improve them. I could point to a number of things which my organisation has done in a similar way that does not get the publicity that Dr Foster does because of the nature of the way that Dr Foster operates.

Mr Lyons

581. Can I come back to the question. You have done some reports on the question of recruitment and retention of staff within the health service, particularly local government. How serious is that a problem for the public sector in your eyes?
(Mr Strachan) I think it is a very significant problem. As I said in my introductory comments, I finished by saying that if I were to think about next steps there are severe skills shortages and I was talking then only in relation to the small area under discussion of measurement. Clearly there are skills shortages being created by bad publicity around the notion that today, working in the public sector is not especially well paid but, moreover, increasingly there is a diminishing benefit of feeling "I am part of the public sector ethos, I am actually delivering benefits to people". There is a feeling that they will be entering a fray, constantly being bombarded by targets and working in a highly demoralised environment. This is a very, very real problem.

582. That would be recorded in evidence that would come to you from staff who would say, "We feel overwhelmed by the targets that we have in this organisation", maybe particularly in health.
(Mr Wilkinson) One of the reasons we did the study on recruitment and retention was because we see the quality of the staff who work in the public sector as being central to the quality of the services that get provided. Mr Prentice asked me to interpret a bald statistic about unitary councils and why they have fewer in the excellent. If we were to try to understand why that might be, the first thing we would need to look at, I think, would be the nature of the staff providing the services. We have not done that so I cannot answer the question. There is no doubt that staff are central to the provision of services. That is why we looked across the public service that we are responsible for and did that recruitment and retention study. Understanding the way in which they operate and what motivates them to come and provide services and to try to improve them is really very important, and that is why we did it. We think there are some very important messages within that study.

583. All of us in health in general terms would want every hospital fully staffed with proper skills available and for us to be able to retain all of these people but will foundation hospitals not distort that if they are allowed to pay their own wages and terms and conditions?
(Mr Wilkinson) We have not seen the details of how foundation hospitals will operate and, therefore, you will have to forgive me for not being able to comment on that.

584. If that was the case, would that be a distortion?
(Mr Wilkinson) There is an issue across the public sector about how you can recruit in particular localities the people with the skills that are needed to provide those services. We are all now in Central London and there is a significant issue within London in particular, in many different parts of the public sector. Whatever Government then does by way of foundation hospitals or other forms of management, will clearly have an impact. We are not in a position right now to make any comment on that, although clearly it is one of the things we would hope that Government would very much take into account as it plans not only what goes on in health, but also in other public organisations.

585. Just one other point on foundations, which you do know about, and this is the question about the passport, the three star rating being your passport to being considered as a foundation. Is there not going to be immense pressure on managers to produce the right figures to become a candidate for a foundation hospital?
(Mr Wilkinson) I think some of the other evidence you have gathered shows that there is substantial pressure on managers in the NHS now to provide evidence of improved performance. That is why we have been working with the Department of Health looking at the accuracy of what is being reported. Of course, you have taken other evidence about the impact that then has on those people at a local level. I am sure that foundation hospitals and other uses of performance information by definition increases the incentive on people to perform better, or to report that they are performing better.

Mr Hopkins

586. Given that the genesis of this process, this regime, if we go back far enough is really the previous government's concern to privatise as much of the public sector as possible, its deep suspicion of public service provision in public hands�and to an extent that has carried on�how much is there a political, ideological steer, even if it is unwritten, for the Audit Commission's work in this area?
(Mr Strachan) A political, ideological steer towards?

  587. If I can say, touching on John's question about foundation hospitals, your colleague, Peter, has just steered carefully around getting too deeply involved in that issue and I can understand. I am profoundly opposed to foundation hospitals myself, I think it is a deeply divisive strategy. The Audit Commission might for example come up with an analysis which says that they will not meet the targets, the best provision is in the public service, the public sector with, public employees, directly responsible to the health service, not an independent organisation: "the Audit Commission recommended we advise the Government to forget foundation hospitals and carry on with the traditional, very efficient and very good public service hospitals that we have had in the past". To what extent can the Audit Commission draw conclusions like that publicly on the basis of the targets and performance of hospitals?
  (Mr Strachan) First all, going back to your point about public versus private, without question there is no political, ideological steer from Government to the Audit Commission on that. The steer, if any, is an apolitical steer in terms of how do we do two things: one, how do we make sure that public money is being spent properly in public services but, two, increasingly, and this is a changing role for the Audit Commission, how do we improve public services�echoing many of the points that have been made�in the eyes of the service user? It is not simply a question of what works but it is very much an apolitical focus on improvement in public services. The mechanism is not the steer.
  (Mr Wilkinson) Could I go back, Mr Hopkins. You said the background of this comes from a different time, a different government. The philosophy of the Audit Commission has always been about evidence based management, to what extent can managers use hard evidence to change what they are doing and to improve. Indeed, all of our reports set out to gather as much hard and objective evidence as they can and then to interpret it, so what does it mean, which has been the theme that I have been talking about in answer to several questions. What was very interesting was I was involved in the first set of prescribed local authority performance indicators which actually came from the Citizen's Charter initiative. The idea that we were thinking about then, and which we tried to enshrine in the first suite we did, was to try to get much more of a public view of what they would be wanting to know about the performance of local authorities. So we were actually coming away from just how you manage the processes to the way in which the public then would be viewing the experience. I think that particular theme is one which is now a core strategic theme of the Audit Commission, to focus on users and their experience, and to look at things from their perspective, and it drives the sort of things I spoke about in response to Mr Lyons about the sort of studies that we have done looking at particular users of public services and the way in which different institutions do or do not organise themselves around individual needs.

588. If I can draw on some of my own experience. I used to work for a trade union and I dealt with the local authority construction sector, direct labour organisations. Some research was privately done, a comparison of direct labour organisations some 18/20 years ago, which found that within the public sector you could find the best possible quality and efficiency of building work and many private construction companies and people I knew said that this work should be done in the public sector and not the private sector. At the same time there were some direct labour organisations that were corrupt and inefficient and, indeed, a comparison between the best and the worst showed that the productivity differences were of the order of four times, the best produced four times as much work as the poorest and the poorest were clearly corrupt. Sadly they were in London, in fact. If the Audit Commission finds that to achieve its targets, in terms of building repairs and quality of work and costs and so on, that it is better achieved through a direct labour public sector organisation rather than subcontracting out to the private sector, is this a conclusion which would be trumpeted and put to Government as the way forward?
(Mr Strachan) Without question, if the evidence showed that was the best way to achieve the highest quality public service, we would declare that evidence publicly. I am sure at the back of your mind you have perhaps PFI, which I know you have an interest in. At the moment we are finalising a report which we expect to publish next week on PFI in schools. While I would not want to preface exactly what we are going to say in that report, I think that you would be encouraged to the extent that we are simply placing on the record the evidence, some of which is good and some of which is not so good.

589. Thank you. Another question about performance. Measuring performance in the private sector, and, James, you come from the private sector, is quite easy. You have a bank and you can measure it by profit or whatever. A manufacturing company can be completely automated without any people at all and it can produce very good quality goods very efficiently and be very profitable. The public service sector is very different in that where you have human contact sometimes to make the service better you need more people rather than less: smaller class sizes, higher staffing ratios, in hospitals for nursing in particular. Is it not a mistake to bring too much of the private sector's measuring performance into the public sector, particularly in these kinds of hands-on public services? Is there not a tendency to look at cost and efficiency rather than what Tony was saying, patient outcomes and student outcomes?
(Mr Strachan) This is something I feel very strongly about. If I look not only at my private sector experience but also my voluntary sector experience, we have two very different phenomena. In the private sector we are maximising profit and in the voluntary and public sector we are maximising impact. Actually many of the skills that enable you to maximise either of those, subject to various constraints, are exactly the same. I would be the first to acknowledge that, like for like, certain aspects of the public sector are infinitely more complex than the private sector. Equally, sometimes I think that argument is overplayed. Managing a multinational company in 28 countries with a whole range of products equally is a very complex affair. Going back to some of the points I highlighted about how you achieve change, there are, in fact, many lessons which are exactly the same, particularly this notion of focus, focus, focus, particularly as we were discussing earlier, and as Lord Browne was sharing, this notion that if you do not create a culture where you can actually fail but quickly learn from your mistakes, then you will not achieve success. The problem that we have faced time and time again in this discussion is that slavish devotion to the universal meeting of targets, many of which have frankly not been set very intelligently, is a sure fire way of not achieving improvement in public services, and I firmly believe that. I still think, and I have said this several times and reiterate it again, that there are very major lessons to be learned using CPA where we are almost trying to extract ourselves from some of the micro-meddling on to the higher ground of looking at "is this an organisation which is set up properly, is organised to create a strategic plan, a business plan, which reflects the desires of the users of services, and does it have the management capability, the staff capability, the ability to recruit people who can implement that plan?" Very simple stuff, but we would have exactly the same kind of discussion in the private sector. Yes, there are differences and, yes, there are complexities but I think there are far more similarities than one might think.

590. One more question. If in your researches in the health service, for example, you find that to achieve the targets clearly there is not enough equipment and not enough staff, in other words not enough resources going in nationally, can you not simply say to the Government that the health service, local government, whatever, is desperately under-resourced? The fact is that in the British National Health Service, or health in Britain, we spend three% less of GDP on health than France, four% less than Germany and the outcomes in terms of health care are poorer in Britain. I think there is an obvious correlation.
(Mr Strachan) I think there is a real danger in focusing all the time on money. I can give you two reasons for saying that. In local government, quite clearly what CPA shows is that, given the same amount of resource, and in some cases even more resource relative to the deprivation of a particular area, some excel and some fail. Money, resource, is not the be-all and end-all. Equally, I would say in the health service I think we would all agree that actually suddenly, for the first time in a long time, money is not the primary problem. The primary problem is using that money efficiently in the very near term. Then you go back to the problems of recruitment and retention, the staff, the systems and, dare I say it in relation to this subject, the skills to actually use some of these tools to achieve improvement this year and next year, not in ten years' time when we will have frittered away an extraordinary amount of additional public funds.

Chairman: Thank you very much indeed.

Kevin Brennan

591. Could I ask James Strachan, do you think that targets should be achievable?
(Mr Strachan) There is a need always to have a mix of targets that are achievable but nonetheless stretching. This is an art rather than a science. The whole trick in relation to a particular situation is to be able to gauge and balance based on your experience, if you are the setter of the target, having very much two-way dialogue with the user of the target, to get that very, very fine balance between something that is not just easily achieved, but at the same time something that is not going to mean that everybody is knocking their head against a brick wall.

592. I was reading this article about you in the 29 November edition of Public Finance magazine which says that in your own career you set yourself a target of 110 per cent. Would you describe that as achievable or stretching?
(Mr Strachan) I have not got in front of me exactly how that was worded but I know what I said. I think what I said was that you have to give 110% of your own energy to achieve targets. I am sure I did not say that, if I set myself targets, I achieve them at the rate of 110% because that would be madness.

593. When you were appointed there was some controversy about your appointment. In the same article it mentions the accusations that were made about Tony's cronies and you said in the article that you rebutted that accusation and said "Just as we would criticise an authority that was failing, we would criticise a department and the heads of departments are ministers". In your experience in the job so far, which ministers and departments would you be critical of in your independent role as Chair of the Audit Commission in terms of their meeting of targets?
(Mr Strachan) I would say in the job so far, because much of my time has been focused initially on CPA where the centre of attention is local rather than central, I have not really been in that position yet. I would say over the coming months, looking forward to the work that is coming, there will doubtless be constructive criticism supported by some recommendations about how they might actually do better in the areas of both health and education.

594. Do you think that generally in terms of Central Government the way that Central Government presents its targets and its measurement of targets is a bit of a mess?
(Mr Strachan) As you have heard from many of my comments, I think the system of having performance measurement is invaluable. I do think today in the public sector we have not yet got it right. Time and time again we need to actually inject more subjectivity into the process of public sector scrutiny. Subjectivity is good, not bad. However, that subjectivity only stands if those using that information have credibility with the provider of the subjective judgment. That is why I think it is very important that we do have staunchly independent and respected regulators and watchdogs, hopefully such as the Audit Commission. No, I do not think it is perfect but it is achievable to change that.

595. It sounds rather like you are saying that the person supplying the subjective judgment must be objective. Can I just press you on the business about targets and Central Government because in your evidence you said that "Targets need to be reported and published consistently across all departments so anyone can find them. Key policy targets should be readily accessible on departmental websites". I will miss out a bit. Then it says "A single government website, if not a paper publication, showing all department targets and performances against them over time would be helpful". Is that something that you would like to expand on a bit further?
(Mr Strachan) Can I, in answering that, refer to a point earlier made by John Lyons and that is this necessarily two-tier system between, on the one hand, headline, relatively simplified notions of are things going well or badly, and that might be the star system or it might be CPAs, at the headline level excellent, bad or whatever, and then, underneath that, performance management mechanisms which actually take the patient journey, for example, in great detail and help on the ground to promote change. I think sometimes in this whole debate we lose sight of the distinction between those two. There has to be an element of the public at large saying "We are not experts. We are not able to set targets in every detail but we would be quite interested to know from the experts, in an easily digestible form, broadly speaking is our authority broadly on track or is it not"? I think all we are saying in those statements is, if that is true of local government, why should it not be true of Central Government at a headline level? I think there is always going to be the problem that, if you simplify the point that it has some value for a very general public, you have to accept there are limitations in doing that.

Mr Lyons

596. One of the key questions that we have asked people that I think is an important question is what should happen if an institution is failing to meet targets while other institutions in the same area are being very successful at meeting targets? What implications should that have for resources? In other words, should the money go to the successful organisation or the failing organisation?
(Mr Strachan) I think without doubt resources should go to the failing organisation. Too much has been made of this notion of freedoms and flexibilities, successful or failing, it is a different concept. Freedoms and flexibilities is not resource. Resource to support, to improve, should naturally go to the failing, the weak, the poor. That was what I was trying to allude to in saying the Audit Commission is focused on trying to create increasingly strategic, targeted regulation to get away from this alibi culture of being able to say we have universally equally covered everything. From time to time we need to do that to create the base line, which is the CPA, but then very quickly move on and actually target resource where the need is greatest.

597. Earlier in an answer to Kelvin Hopkins you quite rightly pointed out that, according to the CPA, councils with similar resource and similar levels of deprivation perform very, very differently, some are poor, some are excellent. Are you therefore suggesting that more resources should be given to the poor councils?
(Mr Strachan) Once again, I think we need to define what we mean by "resource". Do we just mean throwing money at the problem? No. As you alluded to, we have found clearly in CPA that it is leadership, it is systems, it is culture, that is what makes a difference and that is what shows up examples of similar problems with radically different responses and results. It is not just throwing money at the problem, it is understanding what is at the root of why a particular council is not doing well, and then taking a measured response to what would be the solution. Frankly, it may not be the intervention cavalry charging in to the rescue, it may be taking, using the example you use, in the same area other councils who are doing very well. It may be short-term secondments, it may be putting together a group of people who try to help others on a peer basis.

598. Can I ask you one more question. I understand the point that was being made. This is about choice really. In your evidence, when you talk about league tables and education you say, "The school league tables have clearly contributed to parents making a choice about the schools they use". Is not the reality that the publication of this type of information which has led to parents wishing to send, naturally, their children to those schools identified as the most successful has led to a situation where schools choose their pupils rather than the parents choose the schools on behalf of their children?
(Mr Wilkinson) I think we were trying to make a statement of fact in that evidence, as opposed to saying what are the consequences of that fact. There is a big question, which is really a political question, about the extent to which the Government wishes to create choice within public services and then how they wish to give consumers of those services the information and evidence on which to exercise that choice. I think in that evidence we were merely reflecting the fact. I think you are going further and making an interpretation.

599. You understand the point I am making is a linkage to the previous question, namely if, as appears to be the case sometimes, the Government believes that success should be rewarded with more resources and the outcome of publishing information about targets is to make the more successful schools more and more popular and the less successful schools deprived of resources less and less popular, that surely is something you would be interested in in terms of the overall outcome for public service provision, particularly for the most deprived of our citizens.
(Mr Strachan) I stress what I said before, that I think what is important is that the excellent are freed up rather than given more resource, particularly in terms of financial resource. At the same time those in need of help are not simply the recipient of money, they are the recipient of people support, which we keep coming back to, which is at the very heart of the process of change.

Chairman

600. Could I just ask a further question on this particular point because I think it relates to what you were saying a moment or two ago about trying to get a more subjective overall assessment of the CPA kind. Is not the problem with league tables and schools, and we have heard this from head teachers who say "We get an excellent Ofsted report which says that we are a good school, we are doing good things for these children, often in very tough areas, yet each year the league tables come out which show we are at the bottom. That is what gets reported, that is wholly demoralising for the people who work in this school and it sends a message out to parents that we are no good. We know we are very good"? Is that not an absolute contrast with what you are saying is the assessment model that we should be developing?
(Mr Strachan) It is and it merely underscores the fact that the crude use of league tables is no better than the crude use of performance indicators, if all you are doing is coming up with a score, ranking it, and not actually saying "This is but the beginning of the process. Here are the areas we are going to focus on. Here is a process for refreshing this assessment. Here is something to aim at". That is what is important about the kind of comparative assessment that we are talking about. I would say crude league tables, on balance, are very often more harmful than they are productive.

601. So why does the Audit Commission not take the lead in producing these evaluative tables so that we can get a real measure of what schools are like?
(Mr Strachan) That is precisely what I have joined the Audit Commission to try and achieve. That is the honest answer to that. I do think genuinely, and I hope I have given some sense of that, that the CPA compared to a crude league table is a very major first step in that direction.

Chairman: That is very interesting. Thank you very much indeed.

Mr Trend

602. I hope you will do that in health too because although Mr Wilkinson said he had not investigated claims that clinical need was being disadvantaged by health professionals chasing after set targets, it did not take us very long to find a glaring example of that in our overall inquiry where a serious clinical disadvantage had been caused because the professionals were chasing after a star that their management needed. I imagine that there will be many examples of this throughout the system. Is it possible that you might extend your inquiries to look at some of the perverse effects of the star system?
(Mr Wilkinson) I think you will be aware, Mr Trend, that the Commission for Health Improvement looks at the clinical governance of organisations whereas we look at the corporate governance of organisations. I spoke earlier about the need for us to work very closely in partnership with the new Commission for Healthcare Audit and Inspection. What I hope we will be doing together is looking at the way in which both the clinical and the managerial come together, because what you are doing is asking about the consequences of one for the other, and we have not tended to go across that divide because of what our remit is and our limitations.

603. We perhaps have a wider remit than that but I would encourage you to talk to the CHIs as much as possible because that was the problem, that one was being disadvantaged at the cost of the other and the outcome was patients who were getting distinctly more ill, and they admitted this.
(Mr Strachan) I do think on a productive note that, obviously as CHAI merges into the new CHAI, we are very much involved and I personally have established a very good dialogue with Ian Kennedy to try to share the experience of the Audit Commission in order to be able to help Ian Kennedy set up the new CHAI on as effective a basis as possible. That conversation is firmly going on right now.

604. I am pleased about that. Mr Strachan, from your experience in the private sector you said that there are many points of similarity, particularly in terms of the need to focus continually on what it is you want to achieve. Government set targets have been in place, as we have heard, for some time now and the whole process seems to take a very, very long time with responsibilities in different places and all the rest of it. If a private company which was in some difficulties wished to implement a process of change and used in part targets to do this and took the amount of time the Government was doing, the private company would surely disappear long before the desired results were seen. What can be done to speed up the process that you see as necessary in both sorts of organisations, specifically for the Government?
(Mr Strachan) This is a very difficult question because there is no simple, magic panacea. I would like to think that the Audit Commission can make a significant contribution to this debate because if I look back to the private sector I would say that the best piece of business advice I was ever given, and it was in a situation where a company needed changing, was that actually this was a very complex company but at the heart it was very simple how we were going to change it. We needed to set out less than five, going back to my earlier points, five key things we wanted to achieve, where we wanted to go. We then asked ourselves the question had we got the right team to get there. If not, change them immediately or as soon as you can. Praise success to high heaven and you will be home and dry. This sounds very, very simplistic but in a way it is the ability of the private sector to reduce the world to a relatively simplistic set of goals that makes some private sector companies as successful as they are. In my view, it is this very harmful culture within the Civil Service, the constant production of laundry lists, alibi lists, which is harming this process of trying to improve public services. I have no simple wand that will say that will change but I, and I hope others, will become increasingly vocal on the subject. I hope to the extent that we can be a catalyst in this process we will help it move on.

605. Changing the management team in government is complex and belongs to the electorate, of course, but you seem reluctant to have a league table or targets for the administration of government. Why is that? Why can we not say which departments are good and which are bad? Why can we not have targets and tables for those? To a certain extent the government itself began this in 1997 and onwards when they had annual reports which mysteriously disappeared. Why can we not have a more supervisory process of the administration itself?
(Mr Strachan) The simple answer is that is not within our remit. I would not want to simply leave it at that, but that is not within our remit. If it were, I think I would want to make very sure that that style of annual report, which as you say disappeared, was reintroduced. At the same time, wearing a different hat, I sit as a non-executive on one of the DTI boards and the DTI, as you may know, is trying to engineer a major transformation of the way it operates. I think it is very much ahead of the game in Whitehall in doing that and it should be praised for doing that. It is an extraordinary painful process because you have a hugely intelligent group of senior officials, but bound, I would say, by decades of a particular form of experience, a form of experience where success is a bonus. Doing right is what matters. These things cannot change overnight. What I was going to conclude by saying, was that I have actually suggested to Robin Young, the Permanent Secretary, that he considers the notion of using the CPA methodology to actually analyse the success of the department. Whether he takes me up on that proposition is another point.

606. We have also done an inquiry with Central Government about the number of units, in a sense, trying to manage change and measure it and bring best practice throughout departments. Is that the right way to move forward or is it better to have an outside body, maybe yours or some other organisation, which can produce a more subjective judgment on the performance of departments?
(Mr Strachan) I do not think it is one or the other, I think it is a mix of things. If you look at some of the departments, for example the DTI, there has been quite extensive use of outside consultants�which is something that you may want to discuss as a separate topic, I know have you covered it before�but the value of it is that you have subjectivity coming from an objective source. Who exactly brings that is not so much the issue, it is the fact that that is brought to bear on the change programme early, and not late.

Mr Trend: That is all I ask, I am not going to get any further, I think.

Annette Brooke

  607. I do apologise for my lateness, I had a bad experience with the performance of South West trains this morning. I do apologise if I repeat by default. I wanted to refer to the Comprehensive Performance Assessment, I think it really is quite an interesting one, and why the county council performance on the face of it does look to be the most efficient structure. I would rather question the fact that you said that you needed to do some more work with the staff because I think that all of the different types of councils function in different ways in terms of their interaction with the public, how immediate it is, there are lots of differences. When we were on our visits we interviewed people from hospitals and there was also dissent because the larger hospitals did not really like being compared simplistically with the much smaller hospitals with a smaller range of functions. Just picking up on Michael's point, talking about government departments, when you were asked the question, "Should there be a league table for the performance of government departments?" the answer was, "No, government departments are too different in their work". I want to know, when does it become too different to make comparisons?
  (Mr Strachan) My view on that is probably the answer is to have a simplistic league table which simply said DEFRA was good and X, Y and Z was poor. The differences are too great on that simplistic level, there is not a great deal of value. What I was suggesting is that, while the league table result is not of much value, the process, the CPA methodology, the looking at the overall corporate assessment of how the government is run�that, I think, would have tremendous value. To then aggregate them and say, this one compared to that one is much less value at the level of central government�
  (Mr Wilkinson) Could I respond to your question about the unitary versus the county council. I would like to expand on what I said on that. If we try to understand why those figures come out the way they have, we would need to look at a number of different things, one of which would be the ability of particular institutions to recruit and obtain the sort of staff they need, and the need to develop the sort of staff that they need to provide their services. That is just one of the issues we need to look at. It is interesting when you look at that table that councils of all types are capable of providing excellent services and councils of all types fall into that category as well. Whether the structure would be one of the criteria that we drive and change would be one of the issues we need to look at. Looking at that table it is not obvious quite why that should be. That is a clear example of why on indicators of performance it does not give you an explanation as to why, or what you might do to improve that.

608. Going back to my original question, is it not possible to give us as MPs and the general public an idea of whether the DEFRA is good, poor or indifferent?
(Mr Strachan) You used the phrase "league table", what I was trying to keep off was league tables of departments. It is perfectly possible that if we apply the CPA methodology you might have groupings, broadly speaking, of good, excellent, fair and so on. I am just responding to your question on how much value does that simplification really give experts or the general public. I would say it is much less value than local government for the very obvious reason. The diversity of the servicing, provided some of the problems are in the business of providing services throughout these departments and some are much less in that business would make those comparisons rather simplistic. Broad judgments, CPA style, about what is the overall corporate ability and capability of the plan, the needs for implementing it, and so forth, I think we could do better and it would be extremely valuable.

Chairman

609. Who would make these judgments?
(Mr Strachan) I mean organisationally the most obvious body to do this is the NAO, as simple as that.

Chairman: That is a fine answer.

Annette Brooke

610. Do you have any ideas for taking that forward?
(Mr Strachan) To be honest I have not yet personally had a discussion with the NAO, but when I meet with John Bourn, I intend to discuss it. Having said that, as I said to Michael Trend, I have already put the notion to the DTI, because I am very much involved in that process. I think it really does merit further discussion, but I would rather focus on the use of the methodology to come up with improvement plans rather than this league table version. As I am sure you may be aware Westminster Hour, the radio programme, followed quickly on use of the CPA announcement with a mock up of this very process. It made for great radio I am told�but I am not sure�

Chairman

  611. Pick your words with care because I was one of the judges! Just before we finish could I ask two final questions, just one rather specific one and one more general one, this committee oversees the ombudsman system and we often hear that the business of complaints, not just the volume of complaints, but how complaints are handled is a key ingredient in how you might evaluate an organisation and certainly the lament from the ombudsmen over the years is that has not been built in more to an evaluative processes. It seems to me if we are interested in learning organisations one of the things that test them is how they handle people who complain about their services. What I am asking is, can we build the complaints area in to the construction of some of these assessment systems?
  (Mr Strachan) The simple answer to that is in the case of CPA we did. We drew upon a considerable amount of data from the Ombudsman Office for precisely the reason you are proposing.
  (Mr Wilkinson) Can I add that an ombudsman tends to deal with the highest profile cases which are relatively few in number. Actually what defines an organisation is the way in which it deals with things which never get to that level. That is a more difficult thing to do. It is however, as you say, a very important characteristic. We are a learning organisation too and as we think about and we learn about how the CPA and other things operate, that would be a very important area to try to do more in.

612. The complainant's journey model is something that will tell you a lot about an organisation and so not to build that into any kind of overall assessment it seems to me to be an important missing link. You are accepting that. The general point is this, and it comes back to what James Strachan said right at the beginning�I am not sure what his exact words are�it was something like here we are leading the world in inspection, audit, watchdog, that whole paraphernalia of things, but it is not clear that this relates positively to the quality of our public service. It could be that, this is my opinion not yours, there could even be an inverse relationship between these things. The more you have, this whole paraphernalia, the worse your public services are likely to be. There is no parallel. Here we are leading the world in inspection, audit, watchdog and yet conspicuously not leading the world in the quality of public services. I wonder if this brings us back to this question of targets. You were saying the key things that define organisations are leadership, systems and culture, things like this, and yet surely a regime which is target driven from the top is likely to make it harder to develop a culture that you need that over a long term will produce quality in organisations. If you were running round meeting central targets you are not developing a kind of culture of leadership and management and system of your own. I wonder if a better model would not be one where the auditors simply make sure that organisations have got these systems in place, including their own sensible target setting and mechanisms for meeting them, and as long as they validate that you do not need constantly to be poking round to see what they are doing.
(Mr Strachan) I could not agree more. Let me expand on that. I think what that highlights is on the one hand this slow movement towards assessing and scrutinising governance and overall corporate capability, I totally agree with that. That is the way we are going and we should move further in that direction. What I do not think we should do is, as a consequence of that, jettison all targets. On a different level, a working level, an everyday level we should have targets as part of a process of trying to better understand how to improve are a very valuable tool. As I said many times. that is all they are, a tool. The proliferation of targets at the high end of those two levels we are all agreed is a very, very dangerous thing. To then take that statement and say let us scrap all the targets is equally nonsense. The reduction, if you like, of targets to their true level of value is something that we have to continue to think very hard about. The last point I would make, again something that I said right at the outset, is that the real trick here is getting that balance right between those targets, which are few in number, and catalytic to enable organisations to change, and then so much else follows, in training they are very different from the everyday level of working targets which improve quite detailed levels on a day-by- day practice. It is getting the balance of those two right that takes expertise. That is what I am saying we lack. That is what I am saying we need to have much more of, both in central and in local government.

613. Thank you for that. That is probably a good note to end, unless you feel we have not asked you things you wanted to tell us. I think we have covered much of the ground. We are very grateful for the evidence that you have given, it has been a very, very important session for us. I am sorry I regretted at the outset I did not welcome you as the new Chairman of the Audit Commission. I can tell you that we are full of anticipation and expectation about the nature of your tenure and we may well want to call on you again. Thank you very much indeed for coming along today
(Mr Strachan) Thank you very much. I hope I can fulfil some of your expectations.

Chairman: Thank you.

[top]

RT HON CLARE SHORT, MP AND MR SUMA CHAKRABARTI

THURSDAY 16 JANUARY 2003

Chairman

614. Could I call the Committee to order and welcome our witnesses today, Clare Short, Secretary of State for International Development, and Suma Chakrabarti, Permanent Secretary. It may seem unusual for us to invite you to come and give evidence on targets but we wanted to do that because I think you have some views on it, and we wanted to hear both about how it has a particular focus on the work of a Department like yours but also perhaps more general views across government too.

(Clare Short) Thank you. I am a great believer in the public sector using targets but I think we have to learn how to use them well and the whole British system is in a learning process. We were ahead of the game because there was a report of a development committee of the OECD called "Shaping the 21st century" that set targets for the international development effort drawn out of the big UN conferences of the 1990s suggesting they should be the umbrella behind which the international community should work, which were deliberately pitched at stretching, they were ambitious but achievable but would be a description of more than was currently being achieved, and they also were very intelligently drawn together in that they focused on helping people increase their incomes and get their children to school and get better health outcomes which meant you needed something in health systems and water and sanitation, so they described a series of things that needed doing to help a country and a people lift themselves sustainably out of poverty. I committed us before the 1997 election to make these the centrepiece of our work and that was one of the commitments in our first White Paper, which meant both making them the driving force for the work of the Department and the Department working in the international system to get the international development system more focused, because if the public sector more generally finds it difficult to focus its efforts to see whether it is getting results, and therefore always concentrates on what the spend is rather than the output, and that is why we are interested in moving towards targets, you can imagine the international development system is even worse. There are all the governments of the OECD countries, all the developing country governments, the whole of the UN system, all the World Bank, the IMF, the development banks and so on all around in the system having glorious conferences, grand declarations and often very little implementation and delivery�and how do you measure successful delivery? So we wanted both to drive ourselves forward and to drive more coherence into the whole international development effort, which has been achieved to a remarkable extent with the whole international system focusing behind the Millennium Development Goals. So we were getting on with all this, and I will not go on at great length but this is an interesting story: one of the things that has made it very powerful in my Department is that the officials who work in my Department believe in them passionately, so from top to bottom�and we are a very decentralised department�we have a passionate united commitment that this is what we want to do with our own work and with the international development system, and that they are the right targets and that is the drive that is needed so it is very motivating, rather than some of the use of targetry that becomes a threat to people and is imposed from outside and therefore people working in an organisation do not believe in it. So we were getting on with all of this with our passion and commitment and very high motivation in the Department, and then along comes the Treasury, quite reasonably�and Suma in his previous incarnation was part of this, poacher turned gamekeeper or whichever way round it is�saying that we needed PSA targets, and I think it would be fair to say that we have had three comprehensive spending reviews, and in the first one we said, "We have our targets anyway so we will give these PSA targets�no problem", so we did not pay a lot of attention to them and they were sitting there in parallel with our efforts. Then we thought "This is not very good", and we did a propaganda job in the department to tell people about the PSA targets�and they are drawn from what were the international development targets and are now the Millennium Development Goals, but people were quite surprised to find them there�and in the third round we have tried to use them much more to unpack these big 2015 goals so that every bit of the Department can think, "What can we then do in the next couple of years that can be our contribution to this bigger thing that we absolutely believe in?" I want to tell you one final thing about our story and then just make one other comment: Suma and I did a video conference with people from all over the world, because we have people in Latin America and so on, to publicise this round of PSA targets, and people were being interviewed and there was a voice coming through saying, "We do not like these Treasury imposed targets: we have the Millennium Development Goals, we believe in those. Why is the Treasury coming in with these targets and imposing them on us?" It was not everybody but that voice was there, and I said very strongly in this message that has now gone out on the intranet to all staff, "These are for us, we are using these to unpack our big commitments to help us, the Department, drive our work forward better", so I think a proliferation of targets is too many�which there was to a degree in the first place and the Treasury has slimmed down the numbers so now each Department has 7 or 8 so that is more sensible: a rhetoric that talks about them because you set them as though you have achieved them, so you get people going on the radio saying, "We have a target for this and a target for that" and it annoys the public because so what? You have a target but it is not delivery and it is irritating: and I think the sense that they are imposed from outside and that the people working in an organisation do not believe in them, if that happens they will not work, and the media and so on and Opposition parties need to learn how to work with them too because, of course, if they are just a rod for the back of the system and a rod for the back of every department then people will not set stretching targets, and they should. You should be able to say, "We think we can achieve this, we will push ourselves a bit further", and then achieve quite a lot but not all and learn from some of the performance. That is part of the targets working. Finally, they need to be used intelligently to stretch an organisation and give it focus for its work so it can push itself forward and have a clarity and a united effort in improving performance, but they must not be mechanistically followed or we will all end up doing what is measurable. We will end up setting targets that are fairly easily achieved because you want to be attacked by opposition parties or the media so it is foolish to be stretching, and, secondly, a lot of the quality in public services is not arithmetically measurable, so they have to be a tool of focused and improved performance. If they are slavishly followed then we will only set targets for measurable things and you can distort what you do in order to get a tick in the box, but for my Department they are working very well and they are giving motivation, focus, and my department is very respected�they were always good people in the ODA but DFID across the international system is very highly respected�and we have been influential in the multilateral system in getting this agreement on targets which means we now have the possibility of country governments, donors, the World Bank�everyone�all agreeing on what needs achieving and therefore having some capacity to combine efforts and measure progress. So they have given us a discipline and consensus in the international development system that it has never previously had.

615. Thank you. There is lots there that we shall want to take up but, first of all, I have to find a way of asking you about Iraq and the only way I can do that is by noting that one of your targets says: A reduction in the number of people whose lives are affected by violent conflict and by a reduction in the potential sources of future conflict, whether UK can make a significant contribution, and in your performance report this is described as being "on course". Presumably if things went wrong in Iraq it would become "off course"?
(Clare Short) It depends how Iraq is handled, if we can keep the world united around the UN route and if everybody, most particularly Saddam Hussein, knows that this time the UN is not going to be rebuffed and is going to be backed up, and if we can think of ways in which we were driving forward to minimise the risk and scale of any conflict that might take place through the UN route and the speed of recovery for the people of Iraq�and it is not just whether; it is how, when, who authorises, who acts together and what the people in the country think�so that is my comment on Iraq. But more broadly, in the post Cold War world, there is more and more conflict, refugees, asylum seekers, than ever before, and conflict has shifted within countries rather than between them with lots of civil wars and instability, and the poorest countries in the world are hosting massively bigger numbers of refugees than countries like our own where it causes controversy. Twenty per cent of the people of Sub Saharan Africa are affected by conditions of conflict. You cannot get development when states have imploded and civil war is continuing, so we have got this African conflict resolution pool and a global one, one chaired by me and one by Jack Straw, to try and bring together the work of the Foreign Office, the Ministry of Defence and SIS to have a much more coherent analysis of underpinning causes of conflict and how they can be addressed and resolved. So in Africa, for example, the UK has taken a leading role, and obviously in Sierra Leone and in trying to drive forward a peace process in Sudan; the Angola civil war is over; in the Congo we are making progress; in Nepal we are acting and we should have acted earlier�that country is in serious difficulty�so that is very serious. The conflict in the world is holding back development as well as causing a lot of suffering and the use of that target and the drawing together of UK effort has improved our effectiveness in that very difficult area of work.

616. On this particular target, I see in your report that it says it is a target that is a shared target with the Foreign Office and with the Ministry of Defence, as we think about whether we are going to have a conflict or not. Is that a sharing that is working well?
(Clare Short) That is these two instruments�the Africa conflict prevention pool mechanism and one for the rest of the world�and the Treasury proposed that departments, not this last comprehensive spending review but the one before, might try a mechanism where the Treasury makes some additional money available in a way that draws departmental work more tightly together, and we proposed this Africa pool and the Foreign Office proposed the global one. So it is a relatively small amount for the Treasury, say �50 million. Then each of the departments commits the amount of money it is putting into conflict prevention and resolution. The cost of peace-keeping goes through this mechanism too, which in the past has been treated as free good so really quite inefficient. Peace-keeping operations are authorised because they are automatically paid for across the international system so, for example, a really rather ineffective UN peace-keeping operation in Sierra Leone costs $750 million a year which is nearly as much as the GDP of Sierra Leone but because it is automatically paid for one looked at whether that resource could be better used, and this mechanism has led to shared analysis, much more collaborative working, and then we had to agree a way of measuring that performance that all departments would sign up to�so that target is very significant. It represents departments with very different cultures who have not previously worked closely together working much more closely together and improving the effectiveness of all of us who are involved. In the case of Africa I know all the detail�it does not mean we are perfect everywhere but we are beginning to hone and improve our effectiveness and our capacity to collaborate across Whitehall, and the target is a measure of that and helps to drive the effort. You could sneer at how you measure it and that is the problem with all these targets, but it represents something very real and very important.

617. Thank you. Let me hand over a broader question to colleagues which picks up what you were saying: reading some of your reported comments recently and listening to you today, there is a paradox. On the one hand you say that you think targets have a very positive effect on your Department lending a focus to its activity, yet on the other you offer some very critical thoughts about the excesses of targetry across government. You seem to suggest that you think there are too many and not owned by the people who are going to use them, and it is that paradox that we would like to hear more about.
(Clare Short) Part of the paradox is the nature of the great media of our great country, so if you say, "Yes, I agree, targets are exasperating people, there has been a proliferation"�it was a man from the public sector that said to me, "I use the targets and yet if another junior minister comes on the Today programme and says, `Well, we have a target' I will scream", so I was conceding there has been a proliferation, they are seen as externally imposed, control freakery, they irritate people�but I went on to say, "But I think they are very important; the system is learning to use them and so on", but of course our wonderful media always plays up the negative, as you know very well.

618. So your conclusion is that you would like to see some reasonable expectations-balancing of the target system?
(Clare Short) The public sector has been hopeless at knowing whether it has been effective, and all political discussion has been "How much have you spent", as we all know. Getting more evaluation and clarity about what achievements are wanted and then the ability of an organisation to unite and drive itself forward which I think intelligently-used targets can do would be very beneficial but I think targets can be mis-used, they can be control freaky and imposed on people who do not believe in them and fail�the departments would end up in a very punitive atmosphere where the media is criticising, the Treasury might be whipping you and Opposition parties, and you would end up setting easily achieved targets and the whole thing would become a nonsense. So I think there is something very important here that needs intelligently understanding and taking forward to enable us to improve the quality of our government departments and, indeed, local government, or it could end up being a complete nonsense, and I think your inquiry could make a difference.

  619. So it might then be a good idea for the government to have some kind of fundamental review of how the target system is working, what we gain from it, and then how to overcome some of its deficiencies, perhaps?
  (Clare Short) I think the Treasury has been learning and has got departments to have less, so I think a process of learning is going on, but I think your inquiry could be very influential in helping everyone take stock of the aspects that have worked, the aspects that create distortion, intelligence use, and that would be extremely helpful. For instance, announcing great big reviews of everything�it depends what we mean by "review", but learning from experience and improving the system and people's understanding. I think a lot of organisations feel they are being imposed on them, like that video conference I did with my staff, having departments feel that they are using them, or organisations, to help them improve their performance in ways they want is an absolutely crucial component of making them work, and I am not sure that has been well done in many parts up till now
  (Mr Chakrabarti) Perhaps I may add to that? The Secretary of State has revealed my criminal past but the reason the government invented targets in the first place is essentially about accountability and explaining to the public what is going to happen to its money, and the outcomes that the public should expect. So it was a good intention but undoubtedly in the first spending review of this government in 1998, when I was in the Treasury, we wrote down far too many targets�I think 250 from memory�and what has happened with each spending review is there has been that learning process, so it has come down to 160 and now 130 over time, and I think rightly so.

620. Should it come down further?
  (Mr Chakrabarti) Quite possibly, but I think this is part of the review process.
  (Clare Short) I think it is seven or eight per Department which does not sound, in principle, dreadful.
  (Mr Chakrabarti) Yes, but it is a review process each time anyway. The lessons we have all learned are that good targets are ones based on sound evidence. Just setting targets for targets' sake has not much point unless you have some good evidence, and I like to think the ones we have in DFID for the international system as a whole and for the Department system are evidence-based. Secondly, not to have too many of them because then you get an over-determined framework and it is very difficult then to change course and to make trade-offs between targets. Thirdly, ownership. That came up very strongly when we were doing that webcast to our staff�to what extent did they feel they owned these targets�and building up that ownership has taken three spending reviews. Fourthly, watch out for perverse incentives, because setting a target does mean you can then set up a whole set of people down a particular route and miss some of the things you need to do as well which are not written down because they are qualitative and so on. So you have to really watch that and not to be too technocratic about it.

621. Are there any perverse incentives that you have got close to?
(Clare Short) Let me make an act of confession. We are a very highly motivated, very ambitious Department, very in tune with each other, and even I said on the last set, "But shall we set them lower for the Treasury than we really mean just to keep it easy?", and that is a perverse incentive that is very significant, and if the whole atmosphere is punitive that is where we will end up. The real point is matters that are not arithmetically measurable but are absolutely crucial. Some of the complexity of what we are trying to do in developing countries now is we are very much trying to help them build competent institutions to run their own country. The other perverse incentive is only to do measurable things and therefore do relatively easy things, and the targets could distort the efforts in a way which would mean the system would perform less well. That is a danger.

Kevin Brennan

622. Do you think it is more important that targets are ambitious or achievable?
(Clare Short) To use them properly they need to be owned by the Department and stretching and that it is not a disgrace not to achieve them all. They should be ambitious but achievably ambitious, not pie in the sky madness. In the Millennium Development Goals, attempting their pitch there, they require a better performance but it is not mad and it could be achieved, and then it is honourable to try very hard and not quite make it. That is the culture in which they have to operate.

623. That is very important because we have taken conflicting evidence on this, and I think I asked somebody else this question earlier: should we therefore have a target for how many we expect to achieve?
(Clare Short) I think there has to be more trust in the system. If they are to work for the UK in improving our ability to manage change and improve the effectiveness of the public sector, we have to have a more grown-up understanding of the way in which they can help us and not be punitive about them. I do not know, given the state of the commentary on politics, whether you could get them cheaper.

624. If you set a target in government it is different from in business. If you set a target in business and you do not achieve it, as long as the shareholders are happy, that is fine. If you set a target in government and you do not achieve it then the Opposition�and we would probably have done the same in the past�will hammer in, and the press, so is it not terribly difficult to overcome that and end up doing what you considered doing but did not do, namely setting targets you know you can achieve quite easily?
(Clare Short) I think that is an enormous danger and it would be a great pity if we end up there�but we might. It depends on the political atmosphere and your inquiry and the Public Accounts Committee and whether we start to get a more intelligent debate. Certainly I know the police have been unhappy, and in the West Midlands police the Chief Constable who has just retired set some very ambitious targets to get the police more on the ground and more connected with the public, and really drove it and changed the force very considerably, and that was very much owned by the West Midlands force�well, it was the Chief Constable. It has not always been seen as the best police force in the country and has improved massively, so there is an example of it really working because it was not imposed by the Home Office. It belonged to them and they changed it themselves. If we cannot preserve that they will collapse into people setting unambitious targets in order to tick the box in order not to be attacked. That could happen.

625. One of the best known targets in your area is the UN target for 0.7% of GDP to be devoted by countries to international development spend. Is that something that you as a Department have as a target and is it achievable, realistically, within government?
(Clare Short) It was set in the 1970s by the UN system. It is not one of the Millennium Development Goals or the international development targets that preceded them that we highlighted in our first White Paper but it has been a manifesto commitment separately, so it is there and not just departmental. Clearly the Department itself would set it up tomorrow if it was left to us and we could secure the means. We are growing considerably and we, the UK, played an important role with the EU, as did Gordon Brown, in mobilising the European Union to make a commitment at the Monterey conference in the last year to increasing spending across the international system. It will be $12 billion a year by 2006-07. It is my intention to get the UK to 0.7 but it is a different target. It is deeply political, set a long time ago, and we made manifesto commitments about working towards it.

626. One of the dilemmas, the tensions, we have discovered in our inquiry could be summed up by the question "Should you reward with resources an institution that is successful in reaching its targets or an institution that is finding difficulty, is struggling and not reaching its targets?", and obviously that clearly comes through in discussions about foundation hospitals or about schools and so on as to which ones you devote extra resources to. Does that same tension emerge when you are dealing with other countries in terms of your Department and how you respond to it?
(Clare Short) Absolutely. That would be the equivalent. We want to spend money well but you cannot just pile the money into a source that is spending well. You might have another enormous priority for the country and people and a less efficient delivery mechanism and you have to find a way of using money and objective setting to improve poor performance in that part of the system. We have done a lot of work�and I think the international debate has improved and we have contributed to it�on effectiveness of aid, where it is best spent and most effective, if you measure effectiveness by poverty reduction. Aid has been used massively for political ends, for gestures, for announcements on the telly, for propping up the Cold War�everyone knew Mobuto was a dictatorial kleptomaniac but he was a pro Western dictatorial kleptomaniac�so there has always been this misuse of aid. The EU wants to splash it about to have a common foreign and security policy rather than to promote development, so first you need to say "What is it for?" but if effective spending on poverty reduction is your objective the evidence is clear that you should be spending it where there is a will to reform and where there are a lot of poor people even where there is not a will to reform, so you focus it on low income countries�and massively in the international system it is not, but then even in very poor countries where there is a will to reform it is very difficult to be a very good government. Look at Ethiopia which is $100 a head GDP. How do you give something to everybody and keep the show on the road and drive forward a reform process when you are as poor as that? On the other hand, aid cannot be unconditional but change can only be with long term perspectives, so we have all these contradictions on us, and aid used to be projects for two or three years. We have shifted our effort and the consensus in the international system to make long term commitments to build the institutional capacity and better economic management and social provision of developing country systems; we are moving ourselves to make some ten-year commitments behind the country seeking to achieve Millennium Development Goals, and the beauty of that is no one is imposing on anyone because we have all agreed these are desirable targets to lift up the lives of young people; and then you have countries that do it wrong or start spending too much on defence but who might be making fantastic progress on education and you cannot just keep giving them the money but you do not want to destroy this massive advance seeing more and more children being in school and a more sustainable, quality education system, so do you give nuances, war, threaten to cut money, give a bit of notice, try to keep the reform effort on track, not just behave absolutely and turn off the tap or turn the tap. If we were putting our efforts and money in the places that were easiest to reform you would not go to the poorest countries and you would not go to countries recently emerging from conflict and so on, but that is what we are for.

627. There was a comment in the International Development Committee's recent review of your departmental support which said, "We would like to know what would happen were DFID to fail to meet its PSA objectives". What is your understanding of what would happen if you failed to meet your PSA target?
(Clare Short) We would have an intelligent discussion about why. There is desperate drought and famine conditions in Southern Africa, the Horn, there is a war in Cote d'Ivoire, trouble in west Africa, children in Gaza are now as malnourished as children in Congo and Zimbabwe�the world is in a frail and dangerous condition. We are an effective organisation but we cannot perform miracles so there are conditions in the world where things might get worse. The levels of HIV/Aids in Africa leading to reductions in life expectancy are very startling. Botswana, which was going up to 70 and has been a great reformer, has dropped to 30 something, so this is about being intelligent both in setting the targets but if things that were unpredictable take place you do not just go punitive on an organisation. One learns how it adapted, has it any flexibility and what is the way through�that is why we need the culture of intelligent use of targets.

  628. You are particularly prone to that and to having to respond flexibly and quickly to crisis perhaps in a way that other departments do not. Do targets have any role? Do you have any targets for how you deal with the consequences of crisis? For example, how do you plan using targets for a humanitarian crisis in somewhere like Iraq?
  (Clare Short) 10% is for humanitarian crises like Kosovo, Afghanistan, Southern Africa, the Horn. Do we have a target on improving humanitarian crises?
  (Mr Chakrabarti) It is more to do with what are the reasons for that crisis which are usually conflict.
  (Clare Short) Or natural disasters.
  (Mr Chakrabarti) Yes, so they are captured under those sorts of targets and then under the broader geographical targets.
  (Clare Short) But I want to say something here because it is an international system that responds to crises, and it used to be very inefficient and badly co-ordinated so if a crisis is on the telly it gets more; then everyone flies in with their equipment also to be on the telly so you get too many tents and not enough pills or water; so we have been working to build up the effectiveness of UNOCHA (The Office for the Co-ordination of Humanitarian Affairs) which is a new UN co-ordinating mechanism that then makes calls for appropriate things and has pre position stocks around the world and a capacity to move, so you can create a system that is better at responding to crises even when you do not know for sure where the crisis will erupt and we have been working at that.
  (Mr Chakrabarti) PSA Objective IV is for conflict and humanitarian crises.
  (Clare Short) "Increase the impact of key multilateral agencies in reducing poverty and effective response to conflict and humanitarian crises." We are trying to increase the effectiveness of the UN system so that is relevant to the world's capacity to respond to crises and you can measure that. Indeed, I saw that organisation, UNOCHA, today and it is improving.

Mr Trend

629. I was intrigued by your looking for the target because there are so many of these and you were not clear as to which one to go for, as it were, but there was a target and I think that is what you were asked?
(Clare Short) Yes.

630. How do you keep the targets clear in your own mind?
(Clare Short) I am not so interested in the PSA targets. I am very interested in how we can drive forward the performance of the world, and I very much believe in the Millennium Development Goals and I have a pretty clear picture of the ones we are doing well on and the ones we are doing less well on, and in which parts of the world we are doing less well, and the PSA targets are drawn from our overall objectives. So we set them seriously and parts of the Department need to use them to drive parts of their work but I do not care about the detailed ones for my own sake. They were about to allocate money across the Department and all the directors have taken PSA targets and I will be part of the process as we allocate the money. It is not that I do not care about them but they are drawn from our bigger objectives. I am very clear that you do not measure everything you do. If we only did what was in the targets we would be a very ineffective organisation. They are supposed to lead the edge of trying to make some change, not measure everything.

631. But internally are you using your internal PSA targets, as it were, to reward different parts of the organisation for greater success in meeting them than others?
(Clare Short) No, because we have got to make the Department work to do the job that it is for. Some tasks are harder than others. If we have any weakness we have got to correct it. I cannot just say "You are weak, you will get no money", that is some crucial function in the international system that needs more attention. On the margin, as you approach the end of financial years and so on, especially with aid, there is a question of where marginal money can be effectively deployed and then we would put it where spending a bit more money would produce effective outcomes. There are some countries that are in so much trouble you have got to stick with them to build a kind of reform commitment and it is no good giving a big resource transfer. There is a sense there where you give the money according to where it can be effectively spent. If you simply have crude rewards and punishments and only give it to the easy bits we would soon have a pretty disastrous system for responding to the difficult crises in the world.

  632. I was thinking more of targets internal to departments because this is probably the only opportunity that we will have to ask anyone about this, the system of how targets are set and the different interests of perhaps different areas of Departments of State and how they set their own targets and whether it is a mechanism for you within your Department to try and improve the performance of one area or another in your own staff.
  (Clare Short) I would like to bring Suma in as well. We have paid a lot of attention to the management of our staff, to have good management and highly motivated people. That is not only a targets question, that is how you manage people. It is a crucial thing for getting more effective public sector performance. Motivated, well managed people are going to perform better rather than people who are told "Here is the target, go and get it and here is a big bureaucratic system to measure it". We have paid a lot of attention to that, it is not just captured by the targets. We had a big strategy meeting for the Department, we were all looking forward at the next phase of our work and all of the directors were doing so. They are about to come back to me and have gone through the board on our financial allocations. That will be part of the process that includes Asia saying "We are going to give more focus to this and this" and targets will be used, but they will not be everything because in every country we are in with the economy growing, health care, water, sanitation, education, they all need to happen but the UK will not do all those things everywhere, we want to join up with the World Bank and others to do different parts of the job. We do use them very seriously but they are not our magic answer. Do you want to add to that?
  (Mr Chakrabarti) I think the things I would add are we learned a couple of things from the previous year's PSAs which we have now applied. One is to have a PSA which actually maps on to the structure of your Department because otherwise you do not really have accountability that you pass through from the targets to the people, individuals and teams. We have done that this time around. Secondly, how did the targets get set? They were set in an iterative process. It was not the centre of the Department or the Secretary of State or myself saying "These should be the targets, that is it", we very much asked the people on the ground to set their own targets and had an iterative debate, a challenge function really. In doing that you have got to realise that development is a collective effort, it is not DFID alone or the UK alone, it involves a whole set of players. Each of our target setters, if you like, then have discussions with other people around the world. For example, the Asia director spent a lot of his time discussing with his counterpart in the World Bank what the targets for Asia might be, so there was a map across to the World Bank's targets. That gets driven down through business planning mechanisms and what you have got is the director's delivery plans. The Asia director can then say "How am I going to achieve those targets for Asia collectively with all my players around the world? What are the risks?" That is the interesting new dimension to this as well: "What are the risks if I do not achieve those targets? How will I try and mitigate the risks?" It is not a straight reward or punishment scenario but trying to get people to be explicit about what they need to do to try and get near those targets. Sometimes it is a resources issue, sometimes we have not got enough resources in the world to hit those targets. Sometimes it is a policy issue, the policies are wrong in developing countries or in the world.

633. Do you get tensions between some targets which are, as it were, regional and some which are done thematically? Do you suddenly find that Asia is doing more than is needed in this and you need more of that in Africa and vice versa?
(Clare Short) No, because we have got the global Millennium Development Goals. For example, the halving of the proportion of people living in extreme poverty is a billion people between 1995 and 2015 to be able to lift themselves out of extreme a dollar a day purchasing power, parity for what a dollar a day would buy in the US, a tiny, tiny income. We are on track overall to achieve that.

634. These are the MDGs?
(Clare Short) Yes. This is just one example. It is answering your question. This is partly because of the stunning achievement in poverty reduction in China, which is such a big populous country, and some achievement in Asia, which could be better actually but is very populous. Africa is getting poorer but some countries in Africa are on track for the targets. If you just said mechanistically we want to achieve it then you would not care that Africa is not achieving it but if it is informing the effort that the world is taking and you are pleased that Asia is moving on that but you need to redouble the efforts in Africa, the targets achieve that in Africa. Africa needs 7% economic growth across the continent through to 2015 to halve poverty. I spoke to the Tanzanian High Commissioner yesterday, I think they are at about 5% but he said "We need 2% more if we are going to halve poverty". That is the thing really working but, again, you could say "Is it working globally? Yes, we are on track for halving poverty, who cares that big chunks of the world are not?" and that would be entirely the wrong attitude.

635. Can I ask you more about the international side and the MDGs. Were there tensions in agreeing PSAs in MDGs, the internal and the external, as it were, set targets? What happens if there is an obvious contradiction between these two ways of measuring output?
(Clare Short) We are absolutely committed to the MDGs as this umbrella of joined-up objectives for the global system. We are working with the IMF, the World Bank, the Asia Development Bank, the UN system, to get everyone to pool resources and be clearer about how you help countries achieve them. When it comes to the PSA you say that it is the next three years and it is parts of the Department and it is which bits you are going to put the focus on measuring because you are not going to stop doing everything else, so you need to say "What are they for? We want to push ourselves on this. This part of the world, these countries are under-performing on this", so you choose one to help you drive yourself forward but never think you are measuring everything you are going to do or everything that you care about.

636. Surely there must be times when intuitively you feel that a certain course of action is desirable but you have locked yourself in in other ways?
(Clare Short) That happened even with the recently settled one. What did we say? We moved 90% of our spending to low income countries and because China is doing so well it is changing its category but China continuing to succeed and open itself up and make the transition to a more pluralistic country is crucial to the people of China, which is a fifth of humanity and the world, and I said "I am sorry but if by doing that we have made a mistake, we are not going to distort what we do in China, we will carry on increasing our spend as promised in China". That is a case where knowingly I might be getting us to under-perform on one of the targets.

  637. Finally, can I just ask about other institutions. The Chancellor of the Exchequer recently said to the Treasury Committee that international structures like the World Bank and the IMF require substantial reform. Do such institutions hinder the delivery of targets? Do you think there is a reform needed in the international financial system in order to help you achieve these better?
  (Clare Short) Yes. The IMF and the World Bank are public sector institutions. They are funded by taxpayers and they are led by the governments of the world, so they change their values and so on as governments change. They went for neo-Liberalism, Monetarism, Thatcherism, Reaganomics, whatever you want to call it, and they are changing now to have more emphasis on what state markets can do together reflecting where international values have changed. The World Bank used to be very projects based�dams, roads�now we are more and more interested in getting institutions that work, that can manage economies well, that can get a department that manages the public finances well, that has got a good tax system, trains enough teachers, produces enough books, etc. There has been a shift to creating competent modern states in developing countries, which has been a big shift for the Bank. The targets have been adopted one by one and we fought for this as an umbrella set of objectives by the World Bank and by the IMF. The Bank is now looking at the way in which we have used them internally in our own management. You can sign up for something but it is over there and you do not take it inside the management of the organisation. There is a lot of reform in improving the effectiveness. The UN system is very, very precious but very bureaucratic, I think reflecting the values of the Cold War years where keeping lots of people talking was perhaps the priority, and now we want a lean and efficient machine. Right through the system we are working to get more effectiveness, more measurable effectiveness, and having the Millennium Development Goals there has helped that process and that discussion. It does not mean it is simple. In every institution we are working in we are saying "How can we be better at that?" I would say to you honestly my surprise since 1997 is that a country like us, if you are very clear about what you are trying to achieve and it is well thought through, can get very significant change in complex international institutions; more than I would have believed was achievable in a relatively short time.
  (Mr Chakrabarti) Can I just add to that. The last of the MDGs, goal eight, is to develop a global partnership for development and basically that is saying to the international system "Get your act together in order to deliver the other seven goals" and that does require the IFIs, the IMF and the UN system and the EU and all the bilateral donors to start harmonising our systems, to stop duplicating each other and to stop also being very much single issue driven and look across much more than they do.

638. Can I just ask, is there somebody in the driving seat of that process or is it done in a mysterious global way that it may or may not work?
(Clare Short) The UK is the driver because we believe so passionately in this but we cannot do it alone. We believe in it, we go out and work for it, make alliances, do quality work with those who lead these institutions so they respect our people and share knowledge. The Scandinavians tend to be enthusiastic but obviously we are a bigger player. I will not start naming who is enthusiastic or not or I will get myself into trouble. It is how do you get momentum in an international system, how does it become desirable. I am the UK Governor of the World Bank and when I first went to the development committees of the Bank and started talking about international development targets and a central focus on reducing poverty they thought I was faintly mad. I was the only woman, a lot of central bankers go there as well as finance ministers. If you come now they are all talking of the MDGs and poverty. It is not because I am clever, it is because it is right and it is more effective. There has been a very significant change. We were not just doing it out of power, it was because we thought through what we were doing and it was good stuff and we won allies and won change.

Mr Liddell-Grainger

639. When you said in The Observer that the Government's style is "crummy and lousy", you talked about spin but were you talking about targeting as well because targeting is such an important part of what Government hangs its hat on? Do you think that they have just lost the plot on targeting?
(Clare Short) No, I was not talking about targetry, I was talking PR. John Prescott said I should be careful about my language. I was making the positive point that I think there are a lot of achievements that the Government has made that I am proud of. I represent one of the poorer constituencies in the country but the way in which the Government has gone for endless announcements and sounds control-freaky and does not face up to how some things take a long time to change, has made people not believe the rhetoric, not notice some of the achievements. Targetry could play into that if it is an instant announcement, "We have got a target for this", as though that means you have delivered it. Transport is as area that is in a lot of mess and is going to take time to sort out. It is about how you can achieve sustained change in difficult areas in the public sector. I think there is announcement-itis, and therefore "Don't worry, we have fixed it, we have made an announcement". Targets could play into that, you could use the target for the announcement-itis and say "Don't worry, we have set the target" as though you have done it. It is more the PR style. Let me stress, I was saying the achievements of the Government are, I think, considerable and fine and the PR has been less good than the substance.

Chairman

640. Of course, the last bit is the bit that will not get reported.
(Clare Short) Absolutely, and I said that to The Observer. I have just done it again. One day I will learn.

Mr Liddell-Grainger

641. Can I just go on a little bit on that because I think you have opened a little door there maybe to some of your thoughts. This is a Select Committee, we are not on the floor of the House. Peter Mandelson, from Hartlepool, went on to say: "To stay ahead our Government's performance must be raised higher, its ambitions enlarged and the public's confidence earned as a result". I know he is not Cabinet obviously but do you feel that maybe he is talking about we need to look at more targets to try and push Government's gain harder to try and achieve results?
(Clare Short) I do take risks but I would not dream of speaking for Peter Mandelson. You would have to ask him what he meant. I think this is actually a very important question for not having total cynicism in public life, which is beyond the Government's interest, it is in the interest of everybody in politics, how you communicate promises to a country, ambition to a country, the fact that some big change takes time and governments cannot just fix it, even finding the money and being determined it still takes time to deliver. I do not know what Peter was saying but my own view is that the public are uncannily smart at reading between the lines and knowing where improvements are coming. It is best to be straight about the ambition, the determination, the money, how long it will take, the achievements, the set-backs. I think if we trusted ourselves and the public, any party, we would do better and we would have less cynicism in public life. It is easy for me to say and we have a voracious media with more and more outlets, which is part of the problem we have got.

Chairman

  642. Just to interrupt for a second. When the Audit Commission gave evidence to us last week on the work that they had done on targets they said that people were least cynical about targets when the targets were most removed from their own experience. In a sense you are in the least cynical realm because global poverty reduction targets are not things that people have any direct experience of in their own lives and so are likely to be least cynical about them.
  (Clare Short) We did some polling when we first took power in 1997 on a commitment to have more effort in development, spend more resources, and the public said "We don't believe in aid, it is all corrupt, it does not work". We asked about the international development target, "Should we try to get all children in the world into school, reduce infant mortality?" and the public said "Yes, do it". There was a contradiction. They had lost faith in the old rhetoric of development but the humanly measurable, giving people opportunities, they believed in. We have carried on. We have tried to deepen public understanding of what needs to be done to promote development because the level of commitment to it is great. We have tried to really work at that and there is a deepening public understanding. I would say in my own constituency people read things in the newspapers about how hospitals are getting on but we all judge it by our local hospital and it is certainly not perfect yet but it has improved. I am not sure I agree with that.
  (Mr Chakrabarti) These targets are not removed from the people in developing countries. Let us not forget that developing countries' governments signed up to these targets, so they have a wide buy-in amongst people who really matter as well.
  (Clare Short) We have absolutely measurable figures for the poverty reduction in Uganda, which is quite a big achievement. I told you the story about Tanzania. Now that we have got them government after government in Africa are saying "What kind of economic growth have I got to get if I am going to halve poverty by 2015?" They are starting to be useful in getting that more disciplined way in which countries are thinking about "How do I do economic growth? What am I going to do with education?"

Mr Liddell-Grainger

  643. Can I bring you back to the word "cynicism". I think this is fascinating. The Delivery Unit has gone to the Treasury, is that a good thing?
  (Clare Short) It has gone to the Cabinet Office, has it not? Is that Michael Barber's thing?
  (Mr Chakrabarti) The Delivery Unit may move location to join up with the Treasury but it is not actually going to be part of the Treasury.
  (Clare Short) Is that Michael Barber's thing?
  (Mr Chakrabarti) That is right.

644. He is coming before us fairly soon actually. Do you think it is a good thing?
(Clare Short) I understand they are not going to the Treasury, that is a myth. There is a change of building and people think it is an organisational lead change, which it is not. That is my understanding.

Chairman: We have been told that is a physical relocation but not anything more significant than that.

Mr Liddell-Grainger

645. Thank you, Chairman. One of the things that I think is very interesting in this is that on the Millennium Development Goals you talk about having to raise the game. The Chancellor says: "Unless our efforts are stepped up to these same budgets the development goals are not going to be reached". Do you agree with that?
(Clare Short) As I said, they have been set to be stretching beyond what is being achieved but they are achievable. We are on track to achieve the halving of the proportion of people in poverty, a billion people. On all of the others there is some progress but they are not on track to be fully achieved. It is not nothing. It could be better on the infant mortality and so on. The Chancellor's remarks refer to the fact that former President Zedillo of Mexico was asked by Kofi Annan, I think, to do some costing on how much aid we would need in the international system to meet the Millennium Development Goals and he said we need a $100 billion a year. Currently we have about $55 billion and we have commitments to an extra $12 billion. That is what Gordon Brown was talking about, can we not mobilise the international system to come up with the rest. These might sound like big numbers but they are tiny numbers against the scale of what we are talking about and the scale of the rest of public expenditure. The other thing I would add is if we spent the aid we have got in the international system according to where it would be most effective, where the poor are, backing reform, we could increase the effectiveness of the existing 55 billion by 50%, which Gordon Brown and I are working on together, to drive the whole international system that is committed we should get from the 55 billion to 100 billion.

646. The Prime Minister has been extremely vocal about bringing the British psyche into pushing forward international development and the Chancellor is saying we are going to have to increase in the end and you are talking about 35 billion basically. Is he saying "Look, we cannot hit this because of the pressure on spending because of the pressure on the economy in the United Kingdom, although we would like to because we are trying to drive this forward"? Is it not the case that it is a target that can only be hit by the British psyche being fairly forceful in the world community?
(Clare Short) We have gone up from 0.26 of GDP and we are on track now under the last Comprehensive Spending Review to be at 0.4 from �2.2 billion to �4.6 billion and I intend that we should go on up to 0.7 as I said earlier. What Gordon Brown is trying to do is to mobilise the international system to act together and he has proposed this international financing facility which would be an international bond really that countries could commit to and then we could grow the whole international effort. I would like to stress that these sound like big numbers but they are tiny numbers when you think of all the OECD countries making a contribution.

647. I am not disputing that.
(Clare Short) That is what Gordon Brown is talking about and he is working on that. We have got our own obligations as a country but if we get it to be an international effort and governments who do not join in feel that they are doing badly and they will be subject to criticism then the increase that you can mobilise is considerably more. That is the kind of effort we made on the way to the Monterey Conference because Europe then declared and President Bush came up with an extra five billion a year, which I do not believe he would have done if Europe had not declared its commitment to more. We have a duty to our own country's budget growth and world spending but if we can mobilise an international improvement then obviously it is considerably more money.

647a. This brings us back to home and international, I am not talking about us, I am talking about other countries, do you think people are tempted to lie, to say they have hit the target when they have not. You can be talking about a hospital, a school, you can talk about almost anything, you can talk about a nation if necessary. Do you think people feel that some of these targets are so unachievable that the only way they feel they can pacify their political masters is to tell a porky.
(Clare Short) No. They are not unachievable. They were set deliberately to be stretching but achievable. You can achieve them globally and not every country gets there by 2015, but every country can be making progress. They are meant to be usable in every country, and they are global targets. International development is full of statistics. The UNDP, UN Development Programme publishes an annual human development report on the number of children in schools, infant mortality rates, life expectancy but lots of the statistics and weak, old and not as good as they should be. We and others have been working in an international effort to get a small set of measurable, achievable, collectable statistics collected more regularly so that in each country you can see year-by-year what the performance is, who is doing well and who is doing less well. That is necessary to make the system work. I do joke we have a statistics department in DFID that as we start to succeed you will need an international network of statisticians because presidents will start locking up statisticians. You get that tension in politics about statistics when it is a highly politicised objective. In the past, especially in developing countries, the presidents and prime ministers can go to the UN make one declaration, sign up to them and then come home and carry on as before. As these things start to work they are specific. If the country next door is achieving very much more than you it will start getting into the politics of countries and then you will get people not wanting the statisticians to publish the figures, but that will be part of progress.

648. Can I ask the same question but for the United Kingdom only, do you think there is pressure on people, so much pressure just within the United Kingdom, that they feel they have to achieve at any price and they are inclined to think if we just fiddle it slightly we will hit the target. Do you think that is going to become the pressure of targets that are too draconian?
(Clare Short) That could be a possibility. We are talking about the possibility of them getting distorted.

649. Do you think they will be forced out of line where they feel they have no choice but to hit the target because they have been told to hit the target.
(Clare Short) I doubt it. If that happened it would be disastrous. I talked earlier about the dangers of targets being misused. Let me make a point on statistics, prior to 1997 because a lot of statistics were highly politicised it was widely suggested by statisticians�I speak as an honorary fellow of the National Institute of Statistics�there were being distorted politically and the commitment to have a new independence for national statistics came out of the politicisation of statistics under previous governments. I think those sort of pressures you are referring to occur in political systems and we all need to protect the integrity of statistical systems where they are used politically.

Mr Lyons

650. On the evidence we have heard a number of people say they have never been consulted about targets, your story seems to be slightly different in that you are consulted, what are the mechanics of that consultation then?
(Clare Short) Firstly, the Millennium Development Goals we, as a party, me in opposition committed us to try and drive them when we were in power. They came to my Department with the first White Paper and the Department loved it. I was driving it, they wanted it, they believed in it. I came with the commitment out of an election, but it was a very welcome commitment, the Department believed in it. Then we have talked a little bit about the PSA targets within that. It would be true to say that in the early stages we responsibly filled out the boxes but did not have a very thorough discussion inside the organisation, after all we knew what we were committed to so we were giving the Treasury some numbers, we meant the numbers but you do not need to ask people because we know we are doing the grand thing anyway. As Suma has said, we have tried this year to internalise them much more and to make people in the Department feel they own them and they are useful to them. I am not sure we fully achieved it this year�I told you about that video conference. Clearly people were saying it is the Treasury coming in and telling them what to do as opposed to their lovely Millennium Development Goals that they really believe in. This is a very important point for your committee, they do not work unless departments are able to use them to motivate a united effort that people in the department believe in, unite behind and people want to achieve that target and they try to measure something they want to achieve rather than some important person having told them do it and they do not care whether it happens or not.

651. Surely there might just be a bit more leeway in your Department than other departments, say education, when it comes to targeting because of political reasons as to what you are doing as a department.
(Clare Short) I think because we were committed to the international development targets�because we did not have the first Comprehensive Spending Review, did we, until after the famous two years and we had already had this highly motivated spirit inside the organisation of wanting to drive the targets for ourselves and into the international system�I think it came much more happily into my Department. My impression is, I have not worked in the other departments, they were seen as imposed from the centre and pressure organisations were under and therefore saw the more hostile than the way it is played through in the Department for International Development. There is lessons in that about how to use targets well, which is why you asked to see us.

  652. I think that question of ownership is the key to this question in some ways. In terms of new money and the Comprehensive Spending Review, do you get a chance to make new adjustment on your own or do the Treasury say, we want you to up the figures some how or other for that additional money?
  (Clare Short) In the preparations for the Comprehensive Spending Review you produce figures about what you can do with different amounts of money, as you would imagine. There is also a political dimension to the settlement I think. In our case we want the money both symbolically, so that the United Kingdom will be a world leader, but we are spending our money measurably well and better, we are more focused and have a more poverty reducing effectiveness. We also need a lot of flexibility in our budget because of what we do. You cannot just say, this money is committed to X country forever come what may. You get disasters, as we were discussing earlier. We have a lot of flexibility in our budgeting too. To be honest with the Treasury public finance part of the organisation we have produced figures about how much extra might immunise a child and save some lives. I have been known to use the argument that marginal additional spending in my Department produces more human well being than in any other department. If we went with the crude argument to spend the money in a utilitarian way, where it would produce human benefit, we ought to have more, they were not very impressed with that argument. It is more a process of using the money well and allocating between departments. I think in the case of health, just as an outsider, we all knew it was a national priority and that improvements were wanted after years of underspend and it required more spending but you cannot tighten and tie every penny to an outcome years ahead of spending that is going to be 4 years into the future. The other thing I would just say�maybe this is a rather muddily set of remarks and maybe Suma should come in�ever such a lot of public organisations spend the overwhelming bulk of their money on staff salaries and have very little flexibility for relocating money, and so on, because so much of the service is people or in the case of the DSS it is benefit payments, you increase the spend, you know exactly how much it costs. We redeploy our money all of the time, ours is much more flexible spend. Suma, help me.
  (Mr Chakrabarti) All that is accurate. In terms of the Treasury relationship, throughout this new PSA we devised during the last Spending Review we proposed it to the Treasury, we said the previous 2 had not worked as well as we wanted and we wanted to move to a new PSA based round the Millennium Development Goals.
  (Clare Short) Which was a refinement.

  653. Retaliation.
  (Clare Short) They think we are smart.
  (Mr Chakrabarti) The interesting thing we did throughout the whole process of the Spending Review, and the one new lesson that really emerged for us or any spending department negotiating with the Treasury is to get Treasury to own the PSA too. What we did from that process was write a joint paper with them, which was published, called The Case for Aid where the Treasury and ourselves looked at the evidence of what works and does not in development and jointly wrote a paper which was then published and that helped to drive our Public Service Agreement and the settlement we got in the end.

654. What sort of time scale are you looking at in terms of the agreement from start to finish?
(Mr Chakrabarti) It will start in the coming April, the new PSA, and it will be a 3 year PSA but already we have had an informal agreement with the Treasury, because development is a very long process, we would like to roll it over so hopefully the 3 year will become a 6 year agreement that we have.

  655. In terms of time scale they want a definitive agreement from you of targets, how long does that take, from you making suggestions to them and them accepting them?
  (Mr Chakrabarti) It was in mid December we went to the Treasury and said we would like to change it and then we came up with a proposal by the end of February and the Spending Review, as you know, finished in July. It is really from late February through to July we discussed the actual shape of it.
  (Clare Short) If you think there was no judgment in the financial settlements and it all somehow came out of all of the technical detail of the PSA you know that would not be true, there has to be judgment on which areas of policy a country wants to drive, departments are going to have more money in order to provide more services to people and there are some pretty clear rough and ready figures about how much more that will cost. I found in the processes of the 3 Comprehensive Spending Reviews that the public expenditure management part of the Treasury puts you through enormous scrutiny and jumping through hoops, no bad thing. The judgment on how much money you get is not quite the same process, if you failed no doubt you would be in trouble. There is another judgment about the allocation or resources and I do not think that is surprising, I think that is probably right. There is judgment in this, what are the priorities for a government. It is not just mechanical, let us look at all of the numbers.

656. This is wonderful, I just want other departments to get the same opportunity. Suma, in terms of your position, National Audit, how did they come along and you provide evidence and information for them in terms of performance?
(Mr Chakrabarti) We have a dialogue with the National Audit Office for value-for-money studies but also on performance, as you say. They have been privy to all of the discussions around the PSA with the Treasury. When the new PSA starts in April the same information will be provided to the Treasury as to the National Audit Office. It has not kicked in yet, we have not started that process, but that is what I would expect to do.

657. When does that start?
(Mr Chakrabarti) April 1. At the moment they are getting the same performance reports you are seeing on our website.

Mr Prentice

658. I am interested in conflicts between targets, between say the Department of Health and your own Department, Clare, given the Government's imperative was to put additional resources into the National Health Service. How do you feel about nurses being recruited from Botswana, how does that impact on your programme?
(Clare Short) This is a bigger question than just the United Kingdom, there are more Ugandan doctors in South Africa than in Uganda; there are more Ghanian doctors in New York than in Ghana. It happens within developing countries as the population gets more mobile it is going to be more and more of a problem. Skilled personnel are a key to increasing sub teachers, health care visitors, and so on, and that is what we are trying to drive. In the early days when Frank Dobson was still Secretary of State for Health we started some work to get codes of not recruiting from countries with scarce professionals. We agreed a code in Frank's time that was public sector recruitment but there are a lot of agencies who also recruit, so that became a gap and we then had to look at a code for the agencies. You then have the third question of individual human beings who apply, you cannot say, sorry we have decided that is a poor country you cannot work in the United Kingdom even if you want to. There is some evidence that people coming from their country and working else where often go back with skills and leadership that can be beneficial. You are quite right, it is an issue but we have tried to address it and develop these codes and rules of not recruiting in the poorest countries where there is scarcities. Part of it, I am speaking from memory, is with the agreement of the Government. Bangladesh, a very poor country, deliberately trains a surplus of doctors in order that some will be able to emigrate. You need to apply it intelligently but we have tried to do so.

659. Are these codes you mentioned in the form of targets?
(Clare Short) It is a code of conduct about recruitment, you are not to go to a country and start recruiting if there are shortages and the government of that country does not want you to. That was clearly agreed for direct public sector recruitment and then we found gaps in the system because there are a lot of agencies doing recruitment and under Alan Milburn's aegis I hope we have finalised that. Getting an agreement that the agencies would abide by similar codes took a bit longer. We are not excluding individuals who apply because that gets improper in terms of preventing individual human beings deciding where they want to work in the world.

660. I was interested in what you said about the Millennium Development Goals being achievable, we seem to have no made no progress at all on HIV/Aids and not a tremendous amount on gender equality. What are the kind of targets, let us take gender equality, you would have in your Department in order to move towards the Millennium Development Goal on gender equality?
(Clare Short) Let me say a word on HIV/Aids, obviously the amount of infection in the world is increasing, most worryingly in China and India in terms of the scale of people who might be infected. It is not true we have made no progress Uganda has reduced infection levels from 30% down to about 5% amongst young people. There has been at lot of learning and some progress in how countries can reform themselves and reduce infection levels. We have not turned down the spread of the infection across the world. There are some lesson-learning of things that work, Uganda's achievements is considerable and an interesting model. Cambodia also achieved very significantly, it was round prostitution and the spread, there have campaigns on the use of condoms, and so on, and it helped turn back the scale and the spread. On gender equality this is related to education. The evidence is that the single, most powerful intervention you can make in a very poor country to promote development�obviously you should never do a single thing�is to get generation of children, including the girls, through even just primary education. Girls who have been to school change in very considerable ways, if you get a whole generation, they have their children slightly later, they tend to have less children who are much likely to survive, they increase household income and are better at accessing health care and education for their own children. If you can get a generation of children through school you get that uplift they bring with them as they grow up and become adults. We in our own programmes and in our influence in the World Bank, the UNESCO and the whole international system, along with others, have been driving this absolute dedication to the inclusion of girls in education. In the poorest countries girls tend not to be there, they have to go home to get the water, help with the younger children and help with the cooking, and so on. In all our own programmes and international work the inclusion of girls and the change we have worked very hard for. The argument has been won, even in some quite reactionary countries they know getting girls to school is developmental and through grinding teeth they will go for it because the economic benefits are so great even if they do not believe in gender equality. As you go up the educational years you get less girls, as you would expect. The thing is driving in the international system and it is absolute for our own programmes, and where we work on education we have committed one million since 1997. We would not work without an absolute commitment for equal provision for girls and making sure girls are coming into education in equal numbers.

661. That was my point, even in countries where there is a huge bias against gender equality the very existence of these development goals is actually changing the mind set of people in these countries.
(Clare Short) It truly is. Nothing is really simple but this drive means that in lots of countries where woman are far from equal governments are trying to, and they have to, they know the whole international system excepts it, they know it is economically beneficial and they have to have girls going to school.

662. One final question, at the very beginning you talked generally about targeting. You said that targets were okay if they were motivating and not a threat. Given that government must be a kind of learning organisation and we do not keep making the same mistakes twice or three times is it the case that the longer we go into this targetary, the silly targets, the targets that have perverse incentives we heard about earlier will drop out of the system because we are learning.
(Clare Short) That depends how we go. We are punitively exposing the organisations, the departments that have not achieved their targets.

663. Are we still doing that?
(Clare Short) I think the media are at it and some of the opposition parties are at it, so one understands. I am not sure it has settled down yet. I hope we stick with a more refined version used by a tool by the organisation to set its own objectives, drive itself forward and have some respect for undershooting as well as overshooting and learning from that process. I hope that is where we end up. If we get more and more attacks and criticism and very crude public debate about targets you will get the perverse incentives at work, departments will set ones that are easy to achieve at any price even though it might distort the work of the organisation and then they will drop away as a tool. That is a prospect I think that would be unfortunate. They are working for us in a way that helped us make our organisation more effective. We intend to carry on and there is more to do. I do not think it is determined that they will be consolidated and accepted, it could all end up in a mess and they will drop away.

664. I was interested in what we heard about the first two PSAs in the department, they had not worked and that was acknowledged by the Public Accounts Report six months go, July last year, when it tells us that people in your Department said that the PSA was the least known document in DFID, and you have just told us that has changed with the third draft.
(Clare Short) Let me be clear, the Department was improving, its outputs were improving, we were measuring more of what we were doing but because we had our own commitment to these international development targets, then the MGDs, we just spliced the PSA alongside it and did not do much about it in the first year. As I said, the second round we did a campaign of pushing it out in the Department. This time round we have really tried to internalise it in the management of the Department and make it a tool for individuals working in the Department. It is not that we did not care about outputs and measurable improvement in performance but because we had our own beautiful targets we believed in we thought, the PSA we will string it along alongside.

Chairman

665. "String it along" is the phrase we shall remember.
(Clare Short) It was a smaller thing than the big thing we were working on.

Annette Brooke

666. I wonder, Clare, if you can explain a little bit how the NGOs actually influence your targets? Obviously take the umbrella of the Millennium Development Goals, on to your specific targets within the Department, where you said about the consultation coming from the bottom up within the Department, what about all of those other organisations that are talking to you?
(Clare Short) They do not influence them at all. They now believe in them, the NGOs talk about whether they are being achieved in countries, and so on, but the process by which they were set was the big UN conferences of the 1990s, the one on education was in Cambodia, Beijing on women, in Cairo on reproductive of health care, Copenhagen on poverty. The UN had these big conferences and then experts from all over the world were brought together where there had been achievement, what worked and the declarations coming out of these conferences. Then the Development Committee of the OECD came together and said, can we draw a programme out of this that will give us an umbrella of objectives that would drive greater performance in the international system and threw them out at the UN conferences, which were out all of the governments of the world coming together. Then they became the Millennium Development Goals which were put forward by Kofi Annan to the Millennium Assembly of the UN, which was to mark the year 2000, and that was attended by more prime ministers and heads of state than had ever previously attended a UN meeting and the world committed through the UN to the achievement of these Millennium Development Goals and the World Bank, the Asian Development Bank and the IMF have declared they will make them the targets their objectives. It came through that legitimacy of development, governments, the UN and so on. When I came to the Department they were not much talked about in the international system. We did a big push in the UK to just get them more known and early on I think most British development NGOs had not heard about the targets. They have certainly given their consent and come behind that effort and used them to say "Is enough being achieved in this place or that? Does that not need more money?" That is just the way it arose. In the nature of looking at what countries have achieved and the UN process, it is intergovernmental. NGOs have not been hostile but they have not been at the leading edge of the process.

667. I meant do they have an impact on your Department or, indeed, are you impacting on them in their activities when it comes down to your departmental objectives?
(Clare Short) The figures that I have got in my head are they collect from the British public about �200 million a year and we give them another 200. My Department currently spends �3.6 billion going to �4.6 billion. This is just to get some sense of proportion. They do a lot of advocacy and pushing the public to believe. In poor countries they often run projects and in humanitarian emergencies they are often deliverers. The World Food Programme brings food into Afghanistan and there will be local, sometimes international, NGOs at the bottom after the food comes in, getting it to the different villages, having distribution networks. In many parts of the world they will run projects with local people for water or for this or for that and they will push the argument in those countries to demand that the government does more, but there you are. Crudely they collect �200 million from the British public in voluntary donations and the British public provides �3.6 billion going up to �4.6 billion for spending on international development.

668. I was just wondering with all the donations directly from the public, how that contributes to your overall picture and, therefore, how much impact you have on the NGOs in terms of suggesting that some measures are more effective than others?
(Clare Short) Because they have from us a doubling roughly of the income, as much again as they collect from the public, we have an agreement with them because that is taxpayers' money and we have some responsibility to make sure it is well spent. That is when our Millennium Development Goals come in. So we will say "How can this organisation help to drive some area that needs more?" and then we will attach that to our Millennium Development Goals in our PSA targets. For example, one of the things with the Christian NGOs�CAFOD, Christian Aid and so on�is I have been very keen to get them using the church networks in Africa, for example, to have more people in those countries pushing their governments to have poverty reduction strategies for meeting the targets in their countries. That is one of the things that is in our joint agreement of work they might do to popularise the targets in developing countries so people feel more entitled to demand of their government the delivery of what they promised when they went to the UN. That is just one example.

669. There is just so much that you cannot control in that and it is quite important to see how much you can control in terms of meeting their targets. Can I just ask you one detailed question that does not have any underlying significance, I really do not know the answer. When we have an aid figure, how much the Government is spending on aid, does that actually include any debt relief that has been written off or is that recorded separately because I am quite confused when you say that we are achieving 0.4% of GDP? Obviously I was delighted with the Jubilee decision but how much of that is debt relief? Are we really moving forward in quite the terms that we think we are?
(Clare Short) Your question is does the debt relief count as any part of aid spending. The development committee of the OECD monitors the spending and does peer reviews of all the relevant governments' development agencies and once a year they say how much as a percentage of GDP is France spending, is Germany spending, etc. The debt relief that is being written off by the country that year is included in the percentage spend, so when I say my budget is �3.6 billion and by 2005-06 it is going to �4.6 billion, that is real cash, taxpayers' money, that will be dispersed. The point X% of GDP measure announced by the DAC will include the debt relief that is being written off in that year, its export credit debt relief, and the same for Germany, France and so on. People do not know that in terms of the real effect on real countries.

Chairman

670. They do now.
(Clare Short) Some people do. These things get very complicated, every one thinks development is very simple. In terms of countries and their benefits these are countries that are due to pay such high levels of debt that it is completely unaffordable for their economies. The debt relief process has been to say, if you adopt reforms the poverty reduction strategy that will grow your economy and spend more on health and education for the poor and put it forward then the Royal Bank and IMF will say, "we are all going to come with you", and the world will say, "if you implement that and stick with it we will write down the debt you have. . .", they are often not paying it because they cannot afford it. If they start on the right path they stop paying any debt and if they keep on it after three years it is permanently written off. The amount that is being permanently written off for the 26 countries that have qualified is, going from memory, $67 billion. Some of that they were not paying but they are cleaning up their act, getting a good reputation, and it is more likely that people will come and invest in their countries and some of them are spending less paying than they were before, that is real money the $67 billion. You are probably more confused than ever.

Annette Brooke

671. No, that is fine. I just wondered whether that linked back to the Treasury and whether the Treasury does have a vested interest in terms of it actually helping the Treasury's targets if you are writing off debt.
(Clare Short) If you wanted to be very cynical there is money owed to our export credit department, some of which is not being paid because these countries cannot pay. Some of it is IMF, World Bank debt relief, most debt relief countries have a lot of aid too to drive forward their programme. You could say unpaid export credit money becomes a part of the percentage of a country's aid programme, it is not just the UK, it is how the DAC does it. If you wanted to be cynical you could make that point. There has been debt relief before, countries have had debt written off before and it has been badly governed and they incur more bad debt, that has happened in repeated cycles. I think this reforming poverty statutory energy that has come behind the cycle this time is giving considerable change that is beneficial to the poor. There is a problem, commodity prices have been dropping very considerably, coffee and other things, and of course oil prices are going up, so some of the countries that have qualified for debt relief on a formula that would have made them sustainable and they can afford the bit that is left, because what they earn from their coffee and what they have to pay for their oil moved in the opposite directions and probably need more debt relief to be sustainable at the point when they exited previously.

Chairman

672. I have two final questions, I think as we listen to you we wonder how typical you are of other departments and how much we can learn from your experience. I am struck by the Public Accounts Committee Report drawing on the NAO work which said, "In many respects these PSA targets are unsuited to measuring performance in the development field as they say it was virtually impossible to isolate how much or any progress achieved is due to the Department's own efforts". Is that true, do you think?
(Clare Short) I think it is. I think this is the thing about what you can use targets for. There will be different versions of the same point in other departments. If we make a target the reduction of poverty through improved economic growth in a country we are working in where we are a significant player we have some influence on that, we help them sort out their central bank, help them sort out their finance ministry, help them sort out their tax system and their management of public finances, so we are a significant player in their improved economic performance but we are not the only player. They are the right targets because they are stretching and they are ambitious as opposed to something narrow that we could measure, we will spend X on education. We are a player in it but it would be possible for us to do brilliant work and the country to fail or do poor work and the country to do well. Again, it is intelligence use thereof.

  673. It is obviously different from the Department of Health that controls the health service and Department for Education that controls schools.
  (Clare Short) Well, do they?
  (Mr Chakrabarti) I think actually one big difference between us is we have gone for outcomes, pure outcomes. I think any department that goes for pure outcomes is going to have a multiplicity of players into those pure outcomes. The health targets are not outcomes, they are more output or input related targets and, therefore, they are more within the control of the Department of Health. If they went for something like improving the health of the UK population then to what extent is that to do with health interventions or rising incomes or reducing inequalities? The same issue would arise actually.

674. We cannot do justice to it but�
(Clare Short) It is not only an issue for us, it arises with everyone.

  675. Whenever we have talked to different public bodies one of the issues we have sought to get hold of is "Can you tell us of any perverse consequences of the targets regime?" Again, we have touched on this but if I could just revisit it at the end. I notice that the Overseas Development Institute, looking at the Millennium Development Goals, said that they can have perverse consequences because it can lead you firstly to concentrate on those countries where you will get some result as opposed to those that you will not, you do not do the basket cases, or you might focus on those just below the poverty line so you can get them over the line to, as it were, meet the target as opposed to going to those in greatest need. Is that a kind of perverse consequence that works in the development field?
  (Clare Short) Let me just say the ODI were way behind on the argument about the international development targets and goals right from the beginning and at the time of the First White Paper and took this antagonistic line about any targets. You can argue it because if you have any target you can have perverse consequences and you can use them in a cheapskate way in the kind of examples indicated. What is the alternative, for people to splash the aid money around as they feel like it or with their little flag on top of it? The UK's aid spending in measurable poverty reducing effectiveness is a better distribution than that of virtually any other country in the world. Of course you can misuse any objective you set yourself and can then cheaply try to win it. Someone asked that question in order to get political benefit. Without the clarity of output driven approach, improving the quality of the international development effort would be impossible. You can misuse anything. The answer of having no output measures at all but to go on fiddling around and you do not know whether you are doing any good or not I do not find attractive.
  (Mr Chakrabarti) That has not happened to the UK aid programme. If we were really just completely focused on the MDGs and achieving those then it would create that perverse incentive, we would put our money only into Nigeria, India and China, but we do not do that.

676. That is very useful.
(Clare Short) One of the things that is very unusual about my Department is the level of motivation and that is because we are not cynical. People love working in the Department and work fantastically effectively because we all believe in it and you do not play cynical games when you believe in what you are doing.

Chairman: That is how I wanted to end because I think you have confirmed why we wanted you to come along. You are a formidable double-act. You are a standing�or sitting�antidote to cynicism and you are in danger of giving politics a good name. Thank you very much.

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MR PETER NEYROUD, Chief Constable, Thames Valley Police, MR MARTIN NAREY, Director General, Prison Service, PROFESSOR ALISON KITSON, Executive Director (Nursing), Royal College of Nursing (RCN) and MR JOHN SEDDON, Managing Director, Vanguard Education Limited.

THURSDAY 23 JANUARY 2003

Chairman

677. May I call the Committee to order and welcome our witnesses this morning? It is very kind of you to come along. We have Peter Neyroud, who is the Chief Constable of Thames Valley Police, Martin Narey, Director General of the Prison Service, Professor Alison Kitson, who is the Executive Director (Nursing) of the RCN and John Seddon, the Managing Director of Vanguard Education. You have come to help us with an inquiry we have been doing for some time now on targets, league tables, sometimes we call it government by measurement. We are trying to find our way through this. You have given us some very interesting written evidence, which I am sure we shall draw from, but today we wanted to tease out some of the general points, if we may? Because there are several of you, it would probably be unrealistic to ask all of you to make great statements at the beginning. Shall we just get into it, if you do not mind? Let me just ask all of you a question to start with, because we are not just doing targets, we are doing league tables and all the rest of it. What I want to discuss with you is whether members of the public are not entitled to have published performance information about public services even though it might cause some difficulties to people who work in the services for that to happen. Who would like to have an opening thought on that?

(Mr Narey) I accept that entirely. The public, parliament and ministers are entitled to see what sort of return they get from a very expensive public service. We need to be as open and as honest as possible about where we are succeeding and where we are failing.

678. You have league tables of prisons.
(Mr Narey) We are just beginning to develop league tables at prisons. Most of the information we have published to date is about our performance against set indicators, escapes and educational qualifications and so forth.

679. This is not so convicted people can say they have looked at the league table and would like to go to that one, please, because it is well managed and people are treated decently, is it? It is so we know we are spending our money wisely.
(Mr Narey) That is right. Prisoners are not my customers. I want to treat them decently and with dignity, but they are not my customers. The public are my customers and I need to try to demonstrate that I am holding people securely and hopefully I am beginning to do things with them to make them less dangerous when they are released.

680. Let me take it a little further. I can see as a manager why that information is absolutely essential. You need to know how your system is working and if there are weak bits they need to be strengthened. There is a link from that, is there not, to saying this should be public information? We know that does produce some associated difficulties, or can do. Are you very happy to make that leap?
(Mr Narey) Yes, I am. Historically in my service prisons have been literally closed communities, rarely exposed to the public. My view is that one of the factors which has led to the improvement in the treatment of prisoners has been public exposure to the conditions therein. I am a firm advocate of being as open as possible about what we do with this socially excluded group in our society.

681. Is everyone else really of the same view about this, that this is all a good thing, it should all be out in the open?
(Professor Kitson) From a health service perspective I totally agree that the public has a right to expect some information about the level of performance. Equally, it has the right to assume that the measures which are being used have integrity and are measuring the things which the public think are important. I do believe that we have quite a bit to go in terms of being able to reconcile the right of the public to have information and the quality of that information they are currently receiving.

682. That is true. Your evidence talked about the demoralising effect of published information on the people who work in the service. You say that there are people in hospitals who are getting one star and how terrible this is for people working there. You also say that it is terrible for patients and the staff are having to spend time reassuring patients that this does not mean to say they are in a hospital they should not be in.
(Professor Kitson) Absolutely. When people read that their local hospital does not have its star rating, based on a measurement, which could be as focused as evaluating the waiting list times or the throughput in the accident and emergency department, taking that one particular measure, then the inference is made by the public and also by the media often that that is an indication of the quality of clinical services. We all know that in a complex organisation, unless you have the right measure, you cannot make those inferences. That is what leads to the feeling of injustice and demoralisation from both staff and the local community who may have a very different perspective of what the hospital is really like.

683. Is the conclusion from that though, that you are saying, if we can get proper measures and if we can get quality measures, if we can get clinical outcomes built in, then people who finish up having one star will just have to put up with it?
(Professor Kitson) No. I would agree with the first part of your sentence, but not the conclusion you arrive at. The issue is that we know from the public and from many surveys, the patient satisfaction survey and the government's own commitment to a patient-centred health service, what the public would like us to be measuring, which is elements of the level of dignity information, the level of clinical confidence, clinical expertise in terms of the teams which are looking after them and information about effectiveness of clinical interventions. If those are the measures we use in order to measure national performance of health service, then we would be on the road to helping to inform the public about the quality of the services without using the proxy measures which we are tending to use around waiting times and A&E waiting times.

684. I am not sure we are far apart. You are saying that if we could get the proper measures so the data was robust, then you would not have a problem about publication information.
(Professor Kitson) Absolutely not. It is a part of the openness and transparency and a method of improving the overall quality of the service.

685. In the health field, unlike the prison field, as we have established, it would conceivably extend patient choice, because they could see different clinical outcomes, different quality in hospitals and decide where they would like to go.
(Professor Kitson) Absolutely. It would also be providing more accurate feedback data for those teams who would want to improve their performance. They would understand what it was they needed to do to improve.

686. Your argument would in a sense be turned on its head. It would not be that those who were seen to be performing poorly would now be demotivated, but that they would be motivated to be better.
(Professor Kitson) That would be my hypothesis, yes.

687. Is that an analysis the police would recognise?
(Mr Neyroud) In the police service the case for opening information up is probably even stronger. There is clear evidence that a key contribution to reducing crime is a well informed public who are involved in policing. Getting information about where crime is taking place and what is happening is a vital part of the general strategy of preventing crime. Secondly, there is also strong information that the public believe the police are acting legitimately and properly. If you can get information out which identifies that, it also contributes to people's desire to obey the law and therefore to reduce crime. Information from the police service is absolutely vital. The link to then saying that if we publish targets and those show progress people will feel more confident is where I begin to depart from the current approaches. I do not think there is strong evidence that people believe the target information and can actually make the connection between a rising detection rate or a falling crime rate and what actually goes on in their very local community. They might believe the very contectualised data, the data about their particular ward or their particular area, but there is less trust when we start moving on to say, because the targets have been met therefore the public should feel more confident.

688. That is probably an argument, is it not, about the robustness of the data? Surely people are entitled to know whether the police force catches criminals or not.
(Mr Neyroud) Yes. I am not disputing that they should have the information; absolutely. I am just cautious about a presumption which is implicit and has been implicit for some time in government's approach to targets that because we hit the series of targets, therefore the public will have greater confidence in the police service.

689. In principle you have no problem at all with the idea of comparative performance tables for police forces based upon robust data.
(Mr Neyroud) No; I have absolutely no difficulty with that. As a manager, without some form of benchmarking data that I can rely on in terms of comparison I do not see how I can reasonably begin to improve services, because I cannot identify where I may or may not be differing from good practice.

690. We have heard about the demotivating effect, the argument which says that if we do this, nobody will want to go to work in the most poorly performing public organisations. Will they not all want to go into the ones which are at the beacon edge? Will it not compound the problem of getting good people into services where we need to get them?
(Mr Neyroud) When I was applying to become a chief officer I was advised that there were two sorts of positions: there were the positions you want and there were missionary positions. There are several forces around the country which clearly fall into the latter, where there is a lot of work to do. The current advertisement for Cleveland constabulary at the moment has not attracted widespread interest in the service. It is a tough place to go to police. That simply comes round to providing the proper incentives to encourage good people to go to do really difficult jobs in difficult places. On the whole, as long as you are sensible and fair about that, I do not think that you are going to discourage people from policing their local community. It is more at the top end of the business that you are going to find difficulty in getting the right people.

691. In my experience the word "challenge" in advertisements is usually a great clue.
(Mr Neyroud) Indeed.

692. Could we move on so we get the whole panorama surveyed initially? Let us move to John Seddon. We invited you because you are a thinker outside the box on these matters. You are a robust critic of targets and you think they are extremely damaging to how we run public services. Could you in a nutshell tell us why that is as the basis for some discussion?
(Mr Seddon) Perhaps I could do that by answering your first question. My answer is yes and no. Should we have published performance information? Yes, of course. Even though this might be a burden? Absolutely not. The problem is that the choice of targets, effectively the choice of arbitrary measures, dreamed up by people who have a plausible view of what might be interesting to improve, actually creates a bureaucracy of administration which does not serve the purpose of doing the work better. If we could develop measures, as I have illustrated in my evidence to you, which help the people do the work better, then we could report the very same and therefore cut out a lot of this unnecessary bureaucracy and administration and the associated demoralisation and pain which goes with it.

693. When I ask the police about whether or not it is sensible to have targets for getting convictions, they say yes, of course it is and that it is good for the public to have these things. Or if you look at the data inside the prison service, and you have given us helpful listings of all new ones, a lot of these seem extremely sensible as far as running the prison service is concerned. I would want to have those.
(Mr Seddon) But you did not put it quite like that when you asked the chief constable. The question was whether he thought we should have measures which will tell the public how well he catches criminals and he said yes. That is not the same.

694. Let us try it differently then. Do you think you should have targets in relation to the catching of criminals?
(Mr Neyroud) For the first time in my service I now have a target for catching criminals which is to reduce the justice gap between offences which come to our notice and offences detected. There are some concerns around that target which have not yet properly been aired. I could achieve the target in Thames Valley in one of two ways: one would be to increase the level of cautions that I give; the other one would be to arrest a lot of very low level offenders. That would be a very easy way of achieving it and perfectly valid within the current measures. The thrust of the process is to try to deal with the more persistent offenders who have a greater impact. That is going to be quite difficult. I am not convinced that the target as set on its own is a terribly clever way of achieving that.

695. That is an argument about the setting of the target. If it were a target which you had set, in terms of persistent offenders or whatever, then�
(Mr Neyroud) I have already set that locally. I have said we will aim to try to increase the number of our identified persistent offenders whom we shall seek to bring to justice. That is not the national target, which is much more of an umbrella.

696. No; that is the argument about the setting. Unless I am mishearing this, there is an imaginative public service leader saying that these targets are indispensable for doing the work and you are saying they are not.
(Mr Seddon) No, quite the contrary: they engage people's ingenuity in being seen to achieve their targets. The chief constable said himself that he produces ingenuity to make numbers, as do his staff, as do all staff, in the health service and in local authorities. I think the issue is that we need measures to help people engage their ingenuity in understanding and improving the work. That is quite a different kind of measurement.

697. You call them capability measures.
(Mr Seddon) That is correct.

698. I am a slow reader. I have tried to understand the difference between targets and capability measures. Could you just tell us in a snapshot?
(Mr Seddon) A target is arbitrary, whereas a capability measure is something derived from the work. In the police force, for example, we would be interested in the nature of crime and disorder and it is very important to know how predictable it is by geography. We would be interested in how well we currently respond to those issues and the extent to which we currently catch people. These are quite useful measures for the officers doing the work. In the health service we now have targets on waiting times. People use their ingenuity to make sure they meet those targets and as a consequence of that all over this country you find there are theatres not being used with staff at the ready, demoralised by the fact they cannot actually perform operations on people, but the administrators have moved people's appointments around in order to optimise their targets. What we ought to be doing is having measures which ensure optimisation of the theatres, which is quite a different thing.

Chairman: Yes; the question of effective targets on how organisations and people work is one we are interested in and we have sought to explore. We are very eager to get examples from you as from other people about some of these consequences. One you gave just now was interesting and the chief constable too.

Mr Hopkins

699. Let me take a different tack. I am something of a sceptic about targets. In the health service, how much are we really trying to overcome the problem of decades of under-resourcing? We have fewer doctors, fewer nurses, fewer beds, many, many fewer scanners than other comparable countries and on a recent visit to Bristol a German consultant who now works in Britain said that the problem is decades of under-funding. How much are targets just trying to squeeze too much out of too little?
(Professor Kitson) I was struck by a comment I read recently where it said you do not lose weight by standing on a weighing machine. It is a bit the same in trying to use targets to address some of these systemic long-term problems which you have just identified.

Chairman

700. But if you do not stand on a weighing machine now and again, how will you know that you are losing weight?
(Professor Kitson) Exactly, but you do not assume that standing on a weighing machine is what is helping you lose weight. There is a general recognition that one of our biggest challenges in the health service is to understand how we invest more resources, infrastructure, capacity, capability and understanding the right mix of the work force. With that broad understanding and taking John's point, which I totally agree with, the sensible targets we should be setting would be to see how we can increase the capability and capacity and infrastructure of the health service which would then have some synergy between recognising the nature of the problem we have to overcome and also using the targets in a sensible way. Indeed in my understanding of John's position, it would be changing arbitrary targets into capability measures and that would involve the key stake holders, it would involve actually addressing the issues as they are and stopping pretending that we can make people work harder, faster, longer and that will somehow magically improve the health service, because it will not.

Mr Hopkins

701. As for the police, my local divisional commander spent some years working in Belgium. He said one of the simple differences there is that they have twice as many police officers as we do. No wonder they have an easier time. Would you say that you are under-resourced?
(Mr Neyroud) That is an interesting democratic choice. I currently have the lowest number of police offers per head of population in the UK in the Thames Valley. It does make it kind of difficult to deliver measures which are primarily workload based. For instance I am going to struggle to achieve significant growth on the narrowing the justice gap targets where you need people to process people. You cannot squeeze more out of people just by telling them they have a target. There are some metrics to this which do present a problem. Certainly in terms of trying to provide a reasonable visible presence across Thames Valley, the number of officers I have per 1,000 population presents a challenge. The calls to the service have risen very significantly over the last decade or so, the numbers of police officers have not. I spent a week in the States at the beginning of this year looking at how they have continued to keep the pressure on some of the figures they had a decade ago and which have come down dramatically. A key part of that has been numbers of officers applied in a very overt and visible way. That is not something I am in a position to do, although I am trying to do it by doing some very dramatic changes to the back room. When we come on to targets about ill-health retirements, because I now have no back-of-the-line posts lefts which I have not civilianised, I am going to struggle to meet medical retirement targets because I do not have places to put people where they can carry on doing a job which is not a frontline job. I have had to push as many as I possibly can and civilianise some aspects of investigation, a whole host of things which some of my colleagues have not had to confront because they have more flexibility. Yes, it is a fair point; certainly from a Thames Valley point of view it is a fair point.

702. My questions are obviously the sort of questions which are easy in the sense that one would say that, would one not? It is easy to say yes, we need more resources. On the other hand, it is a fair point to make. John Seddon, I was very taken with your paper. From my somewhat varied experience of life before I came into this place, the precise relationship between immediate managers and their staff, how they work, I found always to be absolutely crucial and I liked your example of something I know a little bit about, local authority housing repairs. To what extent do you think our problems really are about the way we manage at that kind of level? We had an example recently of Staffordshire ambulance service, where Mr Thayne, who is now the chief, had come in and spoken to frontline staff, brought them into the process, talked about what the problems were and made remarkable changes such that he has made other people in the health service rather jealous of his success.
(Mr Seddon) Yes, I read the evidence and I thought it was a jolly good example and it is tragic that he has been told not to talk about it any more, is it not? May I go back to your previous questions which I thought were quite interesting? When we ask questions like whether we are trying to squeeze too much out of the current system or whether it is under-resourced, these are all questions around the idea that management's job is about managing the resource against the anticipated work. It might be a bit odd, but I do not think that is management's proper job. What I have found in the public sector is that our organisations are not well managed. They are replete with waste, unproductive activity. A lot of this is attributable to the targets regime. It is a paradox that we are attempting to improve performance with the use of targets but actually undermining performance, as I have shown you in those examples. By managers and workers working together on capability data my bet would be that Mr Thayne was working with his people on simple ideas like whether we can predict demand by geography, in other words, whether we know where people are going to be ringing up for an ambulance and let us move the ambulances to those places. It is not rocket science, is it, but terribly useful measures, because the people get involved in experimenting with method, how could we do this better, smarter and so on. I thought it was a very good example. It was also a tragedy, it seemed to me, that because he had been so successful, he did not get any further funding. There is this problem of where to put the extra money. Do we give it to those who have been successful, or do we give it to those who have been unsuccessful? In a sense that whole area is asking the wrong question.

703. I have had some recent experience of visiting manufacturing plants and have noticed a transformation since I spent some time employed in manufacturing over 30 years ago. Do you think the public services have much to learn from the way the best of manufacturing now operates, with a kind of consultative, team approach to working and getting the best out of people, rather than command, control and hierarchy?
(Mr Seddon) Certainly we found good companies, not just in manufacturing but the whole of the private sector, do use measures in a completely different way to help them understand and improve the work. Those measures are used both in the work and at higher levels, so we do not suffer aggregation of data and the creation of data abstracted from work which tends to cause managers to interfere with the work rather than do useful things. The problem in the public sector is that we have never really helped these people understand very much about management. We have wrought upon them some plausible ideas which okay, can be turned into soundbites and defended by ministers, but inadvertently we have made the whole thing a lot worse rather than better.

Chairman

704. Martin Narey is nodding his head in dissent. Could we have a word from him?
(Mr Narey) I disagree with nearly all of that. Because we can expose the potential for targets to distort behaviour, there is a danger of believing that we do not need targets. The key is to find targets which work and amend them if they are not necessary. I can give you an example. I set a target in agreement with ministers two years ago for my service to increase the number of educational qualifications at level two, at roughly the level of a fourteen-year-old, in an effort to make prisoners employable. What we found after one year of that was that we had reached that target but we had significantly reduced qualifications at a lower level. We have amended the target, given it greater breadth over three different levels and over the three years we have moved from about 2,000 basic skills qualifications to 18,000 over a wide range. It would have been much more difficult to do that if we had not made governors accountable for translating significant additional resources into outputs to make prisoners employable. We simply would not have done it.

705. John, hearing that, and given your approach to these issues, identifying that as what the organisation wanted to do on the education front, using your capability measures, how would you have thought about addressing that issue?
(Mr Seddon) You could do much the same thing. You could use the capability measure in much the same way. It is interesting that Martin starts out by saying that he focused on a certain type of education and the other one dropped off.

  706. Then he said that on identifying the problem he then changed. Is that not a sensible way of proceeding?
  (Mr Seddon) I guess so. The problem I have, as I said when I agreed to come here, it may be a very rude thing to say but most of the rest of the panel probably do not know in practice what I mean by capability measures. We are all terribly used to the idea of targets, standards, service level agreements and so on. We are not used to the idea of deriving measures from the work which can be used by the people who do the work to understand and improve the work. That is the nature of a capability measure. These are the measures you could also put into the public domain.
  (Professor Kitson) With respect to John, that is not really acknowledging the huge amount of creativity and innovation which does exist in the health service. The point we are all struggling to elucidate is the difference between the thoughtful setting up and development of national targets or capability measures which provide room and flexibility for local interpretation which then enables the creativity, the involvement, the active management, the adaptive behaviour which any organisation, whether in the private sector or in the public sector, requires in order to perform to its optimum capacity. The health service is a wonderful case study of how one should never do it. We have over 400 targets, which is totally crazy. We have no distinction between what is a high level target and what are lower level targets. We have interference at every level of management. We have chief executives, directors of nursing, responding, feeling coerced and bullied to achieve things. We have a whole clinical staff, who are told that they are the frontline staff, brimming over with ideas of how they can improve the service, but having to jump around and respond to targets which they may or may not think are important. We do have to address these issues and sort the thing out.
  (Mr Seddon) May I say I support that decision absolutely? The kinds of measures which are being used in the health service do mean that the people who do do innovative things do not get recognised. Recognition is all about meeting targets, arbitrary numbers. I have heard many examples of where very good things have happened, yet they do not get recognised.

Mr Hopkins

707. It occurs to me that it might be horses for courses and perhaps having targets for producing widgets is one thing, but having targets for treating patients might be an entirely different thing. I shall just finish with one example. Several years ago I heard a pretty fierce argument between the head of a GP practice and one of his GPs. The younger GP was pushing patients through rapidly, seeing them for five minutes at a time and getting through a lot of patients, but the patients were unhappy and they came back to the head of the practice and complained. The head of practice was saying to his colleague that he had to spend time with people, listen to them and get it right. They were there for the patients and not there to get the numbers up. I thought that was exactly the kind of pinch the health service is under all the time. It may just be that in manufacturing you can automate everything and do it very simply: treating patients is rather different. I wondered whether that had a resonance with you?
(Professor Kitson) Absolutely. It is understanding the nature of the business we are in and then developing the measures which are sensitive to reflecting the quality of that business. That is why we should be asking the key stakeholders, namely the patients, the public and the clinical teams and from that beginning to develop more sensible and sensitive indicators.

Chairman

708. Just so we are clear on this. You seem to be advancing what I might call a third way position. Tell me if I am wrong. You thought it was right that there should be many fewer targets, but we are entitled to have some targets, for example about how long people should wait before they are seen�you did not say that, I am just giving an example�and the organisations should have the task of working out how they might achieve that. Is that broadly right, or not?
(Professor Kitson) I would never use waiting times as a national target. That would be my personal response to that. If we took one which could have more resonance with the nature of the business, which could be looking at clinical outcomes and also clinical expertise, the expertise of the team looking after patients, I would suggest those could be national level targets. We have examples. For example, successes in the health service around the cancer collaboratives, some of the national service frameworks which have looked at a whole systems approach to improving the patient's experience, taking particular clinical areas and from that you can identify high level targets or indicators and then invite and encourage local managers, local professionals to begin to interpret within the context of health needs the demographic epidemiological criteria which you need to factor in to be able to identify what are sensitive local level indicators of success.

Mr Liddell-Grainger

709. Clare Short came to see us and she admitted that she had been tempted to set targets in her own department deliberately low to make them easier to reach. Then she went on to say that many officials across Whitehall were hostile to such targets and saw them as imposed by the Treasury rather than owned by their organisations. Do you think that is an endemic problem? People do not feel that they belong to targets and targets do not belong to them.
(Mr Seddon) You are presupposing that a well set target involves the recipient, but that is kind of a red herring. There is no tried and tested method of setting a good target. There is none. You might have a target to eat less, run more; that is fine. As soon as you put a target in a hierarchical world, rather like Clare Short, then the subordinate is bound to want to minimise it and the superiors are bound to want to maximise it. Often they are not addressing the question of whether this number has any relevance to work, where you have heard already waiting times do not have any relevance to the work and distort the work. These are common problems everywhere.

710. Do you think ownership is important? We have actually asked Gordon Brown to come before us and we might hopefully get a chance to talk to him. He is obviously extremely busy but with any luck we will get him. If targets are going to be set from the top, say from the Treasury down, all across the service, they should be in conjunction so that people can understand what they are doing. The head of BP came to see us and said that sometimes it is good to miss targets. Do you think that we are so stuck on PSA targets now that we just cannot see anything else, central government has almost a demonisation of targets, targets, targets? Is that what we have?
(Mr Seddon) That is what we have and central government need to understand how inadvertently they have sub-optimised all of these public sector organisations. I have given you two examples and I can give you many more. I rather hope when Gordon Brown comes you put the lesson to him regarding his �200 million investment in the Department for Work and Pensions benefits process changes. I wrote to his department myself and to the Department for Work and Pensions and you can imagine the kind of answer I got.

711. Yes, I probably can. That is one of the reasons why we want him here. May I open it up slightly? Alison, you seem to have 400 targets. How many targets do you have, Martin?
(Mr Narey) Twelve national targets but 30 in each prison.

712. You did say that some had been taken on and then dropped.
(Mr Narey) Yes.

713. How many did you drop?
(Mr Narey) We tried to keep at a figure around ten because most of the research into the way targets are successful suggest you have to have a number which people can grasp together at one time. Of the targets I inherited when I got this job four years ago, I dropped about six and replaced them with about four others.

714. You had 15 in annex A which you sent us.
(Mr Narey) There are 12 but some of them broke down into two. For example, I had a target of offending behaviour programmes which I broke down into general programmes and sex offender treatment programmes.

715. What about you, Peter, how many do you have?
(Mr Neyroud) I was afraid you were going to ask me this question.

716. A guestimate.
(Mr Neyroud) In the national policing plan there are about 15 high level ones. The reality is that there is a whole host more on which I can catch crabs. There is a whole host more upon which I get, from time to time, inspected and caught. I can get up to about 200 if I look for the ones I get audited on.

717. Let us say we are going to have targets, that the government are going to continue with targets in some way whatever happens, how many targets do you think you should have? Do you think the target ethos is something which is going to help? You have to have some sort of barometer.
(Professor Kitson) I think it is really important that we have objectives against which to measure our performance and we set ourselves goals whereby we want to improve our services. Whatever we call them and however we develop them, those things are important. I also believe that there should be a greater distinction between those which can be seen as national targets and those which are achieved at local level. The fact that we have over 400 indicates to me that we need to do some serious refinement and thinking about how we reduce them. Why not pick 12, which would be a good start, 12, 15, 20 but no more than that?

718. Peter, what about you? How many do you think is an optimum level?
(Mr Neyroud) For me it is not the number of them because some of them are just good business, about continuously improving the business. I do not have any difficulty with continuing to try to reduce the number of days lost through sickness, and those ones can run on in the background it seems to me. It is where we get into the really crunchy ones, which are the ones which hit the headlines, that I think we need a rather more thoughtful debate. The ones I particularly refer to are the national crime reduction targets. This is a reality for me, because next week I sit with my police authority to try to set them. I have a dilemma. The PSA sets me a target. For instance, I have to try to deliver an 11.5% reduction in burglary next year, if I am going to meet my national crime reduction target. I have to say that is just completely unrealistic. It seems to me that there is no rational argument which I can construct which says I have the resources to be able to reduce burglary in Thames Valley by 11.5%. I either set that or I set a lower target which seems to me to be more realistic and based on the resource I have, in which case I shall be told that I have not achieved the national crime reduction target and the Home Secretary will no doubt change my targets.

Chairman

719. That is fascinating. We need to know where you as a chief constable got this 11.5% target from.
(Mr Neyroud) I got that figure from Treasury. I should be very anxious for you to ask that question of the Chancellor when he comes. I do think that the continued insistence on the national crime reduction targets flies in the face of the fact that we have just changed the recording practice on crime recording to try to ensure that we move our police recording closer to the British crime survey. There is this continuous criticism that our figures do not reflect the British crime survey, so we have tried to encourage a more victim-led recording process, but we have not changed the overall four or five-year targets which were set some time back. In my case, because I happily joined the merry band of ten on the street crime initiative, I have had robbery added into it as well and I have to try to achieve a 25% reduction in robbery next year. Interestingly this year I have gone from a 35% increase to a 16% reduction so you could argue I could do it, but actually I have done the easy bit by changing the focus of the organisation. To ask me to achieve nearly 10% reduction in vehicle crime and 11.5% reduction in burglary and 25% reduction in robbery really is flying in the face of any known reality about the capability of an organisation to reduce crime. Back to John's point about it disabling the organisation. If I am going to make targets count for my frontline officers and make them something they own and which they feel have some reality, they have to be something they have a realistic prospect of achieving. If we continuously see red traffic lights at the end of the year . . . This year for the first time, because I set lower targets last year with the authority, Thames Valley is actually going to achieve most of its targets, therefore the target setting process for Thames Valley has a bit more reality in it. We did actually miss the national crime reduction targets in doing that.

Mr Liddell-Grainger

720. That brings me very neatly to a point John brought up, which was cheating. It is a difficult one because we cannot tell, but it is something where it is so easy to say that you cannot hit the target, but you can if you cheat, to put it crudely. How much do you think goes on? How much cheating is there in targets, do you think? Can you give a percentage? Can we define it?
(Mr Seddon) It is endemic, it is systemic, it is ubiquitous, it is a natural consequence of the use of arbitrary measures. We should not vilify these people. I remember when Alan Milburn was told that some hospitals were cheating on their waiting lists he said he would find out who they were and sack a few of them. I think the people who are responsible are the people who are setting the targets. If he wants to see who is responsible, he should just look in the mirror.

721. May I ask you three frontline people? It must be very tempting. Lower management just get to the stage where they have to hit enormous targets�you all have huge targets�and they are just accepting they may have to break the rules to get to the end.
(Professor Kitson) Cheating is a symptom of the tensions and lack of consistency in the whole process of target setting. If you do not recognise the creative talent of staff to achieve change, then how you find it is the creative construction of data in order to get through. That is the way I would interpret it and that is the way I understand the motivation of people resorting to that. We have these totally inconsistent messages coming from government about the commitment to improvement and modernisation agenda. That will take a decade to kick in and yet we have coercion and inspectorial regimes being imposed. You have this double bind of people hearing one message and then having to respond to a much more coercive way of managing performance. It is a consequence of that inconsistency.

722. We went to Bristol as a Select Committee to talk to people and they actually said that managers were bullying them�bullying them.
(Professor Kitson) The Royal College of Nursing has over 350,000 members and we know from our regional office staff that this is a common experience, that people are forced into making the numbers look as good as possible.

723. May I ask Martin the same thing as I asked Alison?
(Mr Narey) You need to look very carefully at the design of the target to try to ensure it cannot be manipulated. Sometimes we make mistakes. We used to have targets for hours staff were spending in training, hours prisoners were spending in education. They do not tell you very much and they can be manipulated. Numbers of educational qualifications gained by prisoners cannot be cheated; the number of escapes we have cannot be cheated. You have to try to find things which are going to give you an objective indicator of the performance of the service and I think you can do that. It means of course that you cannot have targets in every area for precisely that area. Sometimes you have to concentrate for your key targets on things which you can verify without any doubt.

  724. One of the things which the Home Secretary, Mr Blunkett, actually said in 1998 was that the drug use figures were plucked out of the air. Does that give you a great deal of confidence? I am not blaming the Home Secretary but I am just saying, as an example, maybe they are being set too arbitrarily.
  (Mr Narey) Those particular targets, as accepted by almost everyone now, were extremely ambitious. I have not found that as they are applied to the prison service they have become increasingly more demanding. Last year the Home Secretary insisted that my target for reducing drug abuse should be more demanding again, but the fact is that target, although we are falling behind it and we will fail this year to meet the target, has nevertheless encouraged us to improve performance significantly. This is an important thing about targets. There is sometimes an obsession about whether you have passed the target or failed it. This year we will fail the target on reducing drug abuse, which is 10%, and the outcome is going to be about 11.5%. The key factor is successive targets have moved us from 28% of prisoners abusing drugs to 11.5%. It has still been very effective in changing the behaviour of the organisation.
  (Mr Neyroud) Twenty years ago noble cause corruption was the thing we were concerned about, that is people bending the rules in order to secure convictions. Administrative corruption is certainly of concern. The other side of that is that we are spending a huge amount of money re-auditing our own figures to make sure that they are as good as they can be. In that 35.5% rise of robbery down to 16%, we have actually recorded 40% more robbery. It is actually even better than it sounds. We spent a lot of time re-auditing our figures to make sure they are absolutely clean. The one thing I did not want to be accused of in such a high profile target and such a high profile approach was bending the figures. We spend a lot of time making sure they are clean but this comes at a cost. It comes at a cost of it being re-audited now by the District Auditor and no doubt by HMI as well. I think it was Mr Strachan giving evidence who said that we do have rather a lot of auditors in the UK, bless them.

Chairman

725. I am interested in what is going on here. We have John at one end of the argument and, if I have it right, we perhaps have Martin at the other end of the argument. Martin is a kind of believer in targets as long as you get them right and appropriate and John is saying it is a quite misconceived way. We have some interesting other positions around those. If we just had a proper global target which citizens might set for you around the argument over whether prison works, why do we not just say that we would like prisons to reduce reoffending? Then you get on and decide what that means for education, drugs, everything else. Would that not be a more sensible way of doing it?
(Mr Narey) To some extent that is the overriding target. My main target this year and in future years is to try to do something which the prison service has never done before which is to reduce reoffending. We have had to work out how to deliver that target to reduce reoffending by 5% and then to make sure that each of my 136 prisons makes its contribution. We believe that an accumulation of what we will do, education, offending behaviour programmes, getting prisoners off drugs, getting them into jobs, will add up to the 5% reduction in reoffending which we are so desperate to prove we can reach.

726. What I am suggesting is one global target which makes sense for the service. You could then say to your different governors and employees that this is what the service is about and they should go and find out how best to do it. Instead of having rigid targets set through the system, we actually want people to do things differently, do we not? We want innovation. We want people to discover what works and what does not work. Rigid targets right down the line about process will not give you that, will they?
(Mr Narey) I do not think my targets are about process. There are few of them to allow innovation. I coined the term "compliant mavericks" with my governors, because historically governors have been very much able to do what they want with very little central direction. Sometimes that has been good, sometimes the results of that have been appalling. What I am saying to my governors is that I am not going to tell them what they have to do every minute of the day. They must deliver for me on broadly two things: keeping people securely and decently and secondly reducing reoffending. We have told them how we think they can do that and I am very happy for them to do all sorts of other innovative things as well and they do. Governors are not cramped by that. The President of the Prison Governors' Association, who spoke to you, Mike Newell, delivers very well on his targets but there is a huge range of innovative things in Durham with the local community, local voluntary sector as well.

727. He is very critical of the target regime though.
(Mr Narey) He is somewhat critical of it. I thought he gave a fairly balanced account to you in his questioning.

Chairman: That was because he knew you were coming after him.

Mr Prentice

728. Ian said that a lot of the evidence suggests that targets are just plucked out of the air. I am interested in the extent to which your organisations have contact with government departments to agree targets mutually which are realistic and deliverable. To what extent does that happen in the prison service.
(Mr Narey) One of the things which has really changed in government in the last couple of years has been the extent to which that now happens when it did not happen before. I spend a lot of time now with colleagues in the departments of Health, Education, Works and Pensions, working together on targets and our targets on getting prisoners into jobs, for example, were constructed in consultation with Jobcentre Plus and involve and depend on a heavy commitment from them to having job surgeries in prisons and so forth.

729. Yet I was looking at the key performance indicators which the prison service has agreed with the Home Office and one of them is to ensure the number of prisoners held two to a cell designed for one does not exceed 18%. How can you stick to a target like that if the prison population is expanding and there is no increase in the physical capacity, no more prisons? How can you possibly agree that with the Home Office?
(Mr Narey) Because ministers have always agreed that even with the absolute certainty we shall fail a target, and we shall fail it by a large amount this year, it is a very necessary indicator of decency. The number of prisoners sharing two to a cell is pretty appalling.

730. That is a kind of aspirational target.
(Mr Narey) Yes. I think it is an example of us being fairly honest. We are setting something which we know we will fail, but the extent to which we fail describes something about the way we treat prisoners.

731. Which other ones are you going to fail in the list mutually agreed with the Home Office? I see number of minority ethnic staff employed in the prison service to be 4.5% by April 2003. Is that aspirational or are you going to get there?
(Mr Narey) No, we have passed that. That is going to be 5.2%.

732. What about the cost per prisoner? I was astonished to read that a prisoner costs the rest of us �36,539; that is absolutely astonishing. Have you hit that target?
(Mr Narey) Yes, we have hit that target, although I do not think that is a particularly useful target and ministers have agreed to drop it. What has happened over the last few years, I am glad to say, is that the government have invested more not less money in prisons because for the first time we have started to do things which might reduce reoffending. I do not think the cost per person target is a very good example.

733. This was agreed mutually with the Home Office.
(Mr Narey) Yes, but it is one reason why we need to demonstrate that for that investment�and I have about half a billion more to spend on the prison service now than I did four years ago�it seems to me inconceivable for that investment that I will not say what we will deliver across a whole range of activity to show that is value for money and to show that the Treasury should not be giving that money to education for example.

734. In your consultations with the Home Office have you persuaded ministers and the top civil servants to dump or abandon a target which you considered to be wholly unrealistic?
(Mr Narey) Yes.

735. Can you give us some examples?
(Mr Narey) Ministers have agreed to drop a target for measuring time out of cell, which has no qualitative element at all to it. We have dropped a target for measuring telephone response times, which was a government-wide initiative and I persuaded ministers that it was not a priority for us. We have changed targets for measuring assaults from one which could potentially distort behaviour to one which gives a truer measure of the safety of prisoners.

736. May I ask the same question of Mr Neyroud? Have you at ACPO had discussions with the Home Office where you have persuaded them to drop a target because it was just not deliverable?
(Mr Neyroud) I cannot think of any within recent times. I come back to the point the Chairman was making about setting one overall global objective. That is a mighty attractive mode. Having spent some time in America recently the really key thing you find in the American police force, which is succeeding, is just that: they are focused on preventing crime. That is the whole way in which they have constructed their reality. They do not go on targets. They have a system called Comstat, which is about the way in which they drive the business locally and it is very much in public. I am seeking to introduce that same approach in Thames Valley. You have to give people locally, your commanders and the public, some realistic idea of how you are going to achieve crime prevention and involve them in doing so. We have just had several targets, for example the 1.2 million more offenders which have to be prosecuted by 2005-06. I must say that although I am chairman of a local criminal justice board, I am not quite clear where that figures was plucked from. It means a 5% increase in the people prosecuted every year, which seems to me interesting.

737. It seems to me that the targetry is not going to be abandoned by the government, that is just moonshine. So the quest is to make targets better in some way. I was interested in reading your evidence to us that ACPO has published and adopted a national crime recording standard which irons out the different ways in which police forces record and measure crime. Was that discussed with the Home Office or was it purely an ACPO initiative?
(Mr Neyroud) It was discussed with the Home Office. When it came into force, it was something of a surprise to the Home Office. As the Home Secretary said, "We wouldn't have wanted to start from here". It came at a point where we introduced the whole thing in April and although we have been flagging it up to ministers, I still think it came as something of a surprise. It means there will be a very significant jump in violent crime from April to April this year. My figures are some 60% up, other forces are even higher than that because we are recording more violent crime. In the current debate about crime that may or may not be considered to be particularly politically helpful. Nevertheless it is a more accurate reflection of what is actually going on on the ground. It does not mean more crime is taking place. We are recording more violent crime in this period of time.

738. Did the Home Office thank ACPO for this?
(Mr Neyroud) There was warmth, but it was not necessarily gratitude. That said, we are even now moving on to look at standard measures on detections. There is a debate about what a detection is and what it is not. We need to get that one standardised across the country. There are good arguments both ways. For well over a decade we have been asking the Home Office to regularise the position with the recording of things like common assaults and things of that nature.

739. I suppose this is a question for everyone. Why is it that we do not ask the National Audit Office or some independent agency to validate targets and agree them before organisations are held to targets which may be unrealistic and undeliverable? Is that a way forward? We just involve the National Audit Office or the Audit Commission to give the stamp of approval to targets which are brought forward by government departments.
(Mr Neyroud) If you are going to recommend the Audit Commission to me then I am going to feel about as cold as I do about some of the current target setting because they were responsible for one or two of the ones over time, the one about response times, which I think have significantly worked against the quality of police work and all we have ended up doing is measuring how fast we get to a scene that we may not manage properly.

740. We need someone to inspect the inspectors then.
(Mr Neyroud) We need some common sense. It is helpful that you are having this debate around what is helpful targeting. I agree with you entirely that government is not going to go off this idea and there is something to be said for the idea that we do publicly debate what it is we are asking our public services to do and set some sensible goals to do it.

741. Could Professor Kitson just deal with that point, given the multiplicity of targets in the health service and all the evidence we have had that so many of them seem to be unrealistic.
(Professor Kitson) I would make a distinction between a target as a valid measurement tool and a target as something which reflects the nature of the work. The people who are the most important sources of knowledge are the people who do the work and the people who receive the product. I would say that effective target setting is about extending your stakeholder group, the people who understand the business, who can identify what it is sensible to measure. If you then want to invite an organisation which knows how to measure things effectively, then you might choose to ask the National Audit Office or the Audit Commission to scrutinise the quality of the two we are developing. I would not assume that they would know any better than frontline staff in the organisation what it was we were trying to do.

Chairman

742. Just listening to the conversation it struck me that the more Mr Neyroud meets his targets, the more difficult it becomes for Mr Narey to meet his.
(Mr Neyroud) Spot on.

  743. The more you bang people up, the more he has trouble meeting his targets, does he not?
  (Mr Narey) Absolutely true.
  (Mr Neyroud) We had this debate in a bunker somewhere in government earlier on this year over the street crime initiative. Yes, is the answer.

744. Does that not just tell us something about the lack of joined-upness in all this?
(Mr Narey) It is certainly the case that if I have significantly more prisoners and I have to overcrowd more, then the number I can treat reasonably and make employable will be reduced; no doubt at all about that. It remains to be seen what additional investment I will get in new prison places to keep up with the justice gap, if indeed it is closed. What I expect is that the government will give me those places if significant additional numbers of people have to go to prison.

Mr Prentice

745. In the briefing material we have, we are told that the Office for National Statistics estimates that there will be a rise in the prison population of 40,000 in the next six years. Is that correct?
(Mr Narey) No, not 40,000. I do not have the figures in front of me. The expectation is that the population will rise to about 75,000 by the middle of this year and about 80,000 in 18 months' time.

  746. Not by a further 40,000 over the next six years.
  (Mr Narey) No. I should say that those projections depend on initiatives such as the justice gap working. Obviously I hope they do, but they may not.
  (Mr Neyroud) I would have to have been staggeringly successful for that.

Mr Heyes

  747. We heard some really powerful evidence from people at the lower levels in the health service in Bristol when we went there to take evidence and stories of managers bullying nurses and threats of disciplinary action if the trolley waits were too long for example. That feeling of a bullying, punishing culture comes out in things which each of you have said to us this morning. I am sure you are well able to resist bullying, but it is quite easy to see that as high-level bullying. I just wonder to what extent the malignant effects of this negative culture permeate the organisations you are all part of. Is there some way you can describe to us and give us a measure, a feel, of just how damaging that is, just how it serves the opposite purpose to that intended? I just throw that open for any of you to pick up and run with.
  (Mr Narey) Clearly there is a problem of bullying in some public services; there will be some bullies in my service and I have given quite recent guidance on what I think is and is not bullying. Many people who talk about being bullied at work are actually talking about being robustly managed at work. You have to make the distinction. I do not think anyone would accept long-term the practice which was certainly in the prison service I joined 20 years ago when prison officers did more or less what they wanted. They dictated their own hours, they worked as much overtime as they wanted and treated prisoners pretty appallingly. Prison officers simply are not allowed to do that now. They essentially have to do as they are told. The vast majority of them, a very changed group of people, accept that. Some of them think no doubt that doing what they are told and being held to account constitutes bullying. Sometimes it may be, usually it is not.
  (Professor Kitson) I would see bullying as a symptom of a systemic problem and not listening to people or making them work harder is not going to solve the problem. It is about harmonising the range of different ways we measure performance. Health care and medicine in particular have some really first class data systems where they look at outcomes of patient mortality, morbidity figures. We have invested hugely in clinical governance arrangements but somehow these bits of the system do not seem to be talking to each other. The situation that leads to people saying that they are being bullied is whenever they are being asked to do several things when they as individuals do not understand why they are doing them, they are already hard-pressed, they are already trying to do their best; nobody comes to work wanting to do a bad job but somehow the system conspires against them. It is understanding the educational needs, the way we can create a culture which is about learning and improvement and about harmonising the range of things we do and holding people to account. We do need to address management practice and leadership practice within the health service to be able to understand how we change the way we respond to some of these pressures.
  (Mr Seddon) A lot of these bullies are systemic, they are a product of the system. I can give you an example of this. Local authorities have been told to establish e-enabled access, which means call centres and internet access, by 2005 for all legal services. There are local authorities which are fully aware that those who have trodden this path have produced higher costs and a worse service and on the basis of that are planning an alternative way to improve their services which effectively will not meet the government target.

748. Is there evidence to that effect?
(Mr Seddon) Oh, yes.

749. Which we could see; more than an assertion.
(Mr Seddon) Yes; I can supply it to you. The important thing is that those civil servants who work for the Office of the Deputy Prime Minister will say to these people that they will have to decide how to do this or they will decide for them. I know this is going on in the Midlands at the moment. These people are just doing as they are bid by their minister. It is not as though they mean to bully; they are just products of the current system.

750. We could debate the meaning of the word "bullying". You talked about a public sector which was replete with waste and unproductive activity before. This culture is part of that. Is that what you are saying?
(Mr Seddon) Bullying is coming from the frustration of central government to get public services improved. They have not improved. We have tried a number of things. We keep changing the things we try, but essentially we do not change the underlying philosophy. As we become more and more frustrated with them, we start engaging in more bullying kind of behaviour.

751. When Mr Neyroud catches the crab does he pass it down the organisation? Is it cascaded down?
(Mr Neyroud) No. I can only talk Thames Valley, but I do not think bullying is particularly prevalent in this context. I am going to put a slightly more positive side of this. The street crime initiative which we had last year took a lot of flack from a variety of different sources for not unnatural reasons. From a Thames Valley perspective, we had a high level of robbery and rising, which clearly needed sorting out. Preventing crime is something which the frontline cops firmly believe is their core business. It is what they joined the job to do. Actually energising folk into reducing robbery this year has completely energised the organisation over this last eight, nine months. There are examples where a target, which is something which people firmly believe is something they should be doing and ought to be doing to serve the public, given a fairly broad remit and a framework which helps them achieve it without making it too much of a tight framework, something which gives them some scope to adapt in their workplace, can energise the organisation and deliver much better results than you were expecting at the beginning of it.

752. Is that not just saying "Trust me, I'm the professional"?
(Mr Neyroud) No, no, no.

  753. You have stumbled across a target which fits with your professional view of the way things should be done.
  (Mr Neyroud) No. Although I started work on robbery before, my targets are negotiated with my police authority. The robbery target was the first thing I negotiated with the police authority who represent the community locally. Then we have a national target as well. I am not asking you to trust me on the robbery target. What I am saying is that if you get the right target and one which actually means something to frontline staff, it can significantly energise staff if you give them the freedom to concentrate on that. If you also then try to concentrate on 30 or 40 other things which distract you, that is when we start to get into areas where people feel demotivated. At the moment my lot feel very significantly motivated on robbery because they have achieved beyond their expectations.
  (Professor Kitson) May I say that I think this is such an important point? It is about ownership, it is about interpretation and understanding of the relevance and impact of the target to the people who are providing the business. It is that dialogue, that constant iteration between the people who are setting targets and the people who are having to deliver them that improves the quality of them. At the moment we are not involved sufficiently in the dialogue and in the refining process which then leads to these other systemic issues you have just raised.

Chairman

754. You say you had a street crime problem which you knew about, rapidly rising figures, something to be done about it. Why on earth did we have to wait for a national target to get to energise a force to do something about it?
(Mr Neyroud) That is a very good question. I would just point out that I took over as the chief on 11 February, so I cannot talk for why the force had not spotted it prior to my arrival. I arrived from West Mercia with a street crime figure of about 350 for the whole force, walked into one of the basic command units in Thames Valley and discovered it had three times the level of my current force's robbery, so I thought it was probably a problem which needed sorting out. Robbery is a very serious issue for the public. It was the first change in the policing plan I made, even before I joined the organisation. I guess that is about the opportunity of coming in as an outsider afresh, to have a look at it and say it does not look right. I was surprised to find that it was a source of some considerable local pressure as well. There was also the point that Thames Valley was left out of the robbery initiative nationally, so it was not a target. There is a purpose to targets when they are actually pointing out to organisations from a national perspective what is important to the public. The British crime survey clearly identifies burglary, vehicle crime and robbery as being important to the public. There is a role for national government in the national policing plan for saying that these things are important to the public and you had better pay attention to them and prevent them. That is fine. Just try not to get into too much detail beyond that.

Annette Brooke

755. May I briefly look at relationships between targets and resources? Martin said that a target for time out of cells had been dropped. Was that dropped because you cannot recruit enough prison officers?
(Mr Narey) No, it was because after trying it for a few years we did discover that it was distorting performance. We found that governors were concentrating on meeting that target and not concentrating on the quality. One of my current targets, purposeful activity, came about to change that. It was a step forward from time out of cell because it measures things which are useful. I want to move from that to concentrate specifically on the actual elements of work we can do with prisoners which will make a difference, which is education. It is really about refining targets to try to make sure that they are outcome based and attaining them makes a real difference.

756. Is it not true that there is a shortage of prison officers in certain places?
(Mr Narey) I would patently like more prison officers, but I cannot complain relative to other government priorities about the investment I have had. I have more prison staff than ever before and I have had more investment in the things which I desperately want to do to make prisons constructive than my predecessors could have dreamed of.

757. Moving slightly along and broadening it as well, can targets be used as a tool to get resources in the right areas? For example, Gordon mentioned the two to a cell target. There clearly is a dilemma if we have more and more prisoners. Either you have to change sentencing policy or you have to build more prisons. With your need to meet that target, how do you then go to government to ask for something which is going to facilitate you achieving that target?
(Mr Narey) I have two targets which demonstrate where the service is failing. I am anxious to have those targets very public and yes, they do help in discussions with ministers about resourcing because they highlight areas of failures. One is the proportion of prisoners two to a cell and the other is my suicide KPI. From my point of view as Director General, I want that to be publicly seen and to be a matter of controversy and it will likely lead and has helped to lead to some funding to try to improve in those areas.

758. That is important. On the other hand it might distort funding, depending what the reaction is to the target failure, might it not?
(Mr Narey) Yes.

759. It has strengths and dangers. Just reading the papers it looks as though Peter's settlement was a bit like my police authority's. How are you going to deliver the service and meet your targets or are you going to?
(Mr Neyroud) I am. What I have put to my police authority is a proposal for a 43% rise in council tax, which is the other way of doing it. That includes the resources I think I need to deliver the sorts of improvements which are in the national policing plan. I suppose you could argue that the targets in the national policing plan might be helping Thames Valley police to improve their level of resources, but I think it is actually opening up quite a hornets' nests of debate about accountability locally. I am not the only one. I think my increase will be half that of a number of police authorities round the country, indeed I believe one is looking at a three figure increase.

760. I thought 20% was bad enough.
(Mr Neyroud) There are some very substantial increases because the national policing plan is a hugely stretching document for the police service. It looks very much like the National Health Service plan in terms of the number of things we have to do, many of which we are not funded for.

761. If we assume that the funding stays as it is, do you then go back to the Home Office and say you cannot do this because . . .?
(Mr Neyroud) That is interesting. Because it is a tripartite relationship it will be a three-cornered debate between the police authority, the Home Office and ourselves. I think there is actually a fourth party which is Banquo's ghost at this particular feast and that is the Treasury. Clearly the PSA targets have been set from that direction and in the context of the spending review one of the reasons we did so badly was the inability to show that what we did relates to targets and relates to performance. That is part and parcel of the complexity of the role of the police. Earlier on there was a debate in which we were seeking to draw comparators between the public and private sector and I think that is a bit of a difficult one to draw. If you are making widgets, you can decide not to make the widgets which are more costly. I cannot. I have to make all the widgets one way or another and some of the ones which are most costly, which are about providing a very good frontline quality of service, are costly to do, because it means highly trained people responding to more calls. Those are the ones who are in most difficulty. One of your colleagues said that the discussions in the Commons tearoom were about the quality of the service the police deliver not about the targets. That is probably a fair reflection of my post bag.

Chairman

762. It is a good job you are not standing for election in Thames Valley this year.
(Mr Neyroud) Indeed.

763. Unfortunately that is what we have to do. May I just ask as we end, whether there is anything we have not asked you which you would like to say to us very quickly? Just a parting shot about what your version of the redesign would be. Gordon's point about targets not all going to go away and needing a better system. Just in a nutshell.
(Mr Seddon) My parting shot would be that it is a shame the government will not drop the idea of targets. I feel what matters to Tony Blair and Gordon Brown is what works and the evidence is that they do not work. It seems to me that we have a culture at the moment of what matters is that you do as you are told, which is not what we want.

764. That is the kind of model answer I like.
(Professor Kitson) Three things. One is to focus future targets on the nature of the patient's journey, understanding that more effectively. Secondly, do less better. Thirdly, harmonise the things we have in the existing system.

  765. You are brilliant. You have rehearsed.
  (Mr Narey) Targets are not the only way of doing it. One of the best ways of measuring effectiveness and value for money is competition. I would rebut John's suggestions that waste and inefficiency abounds in the public sector by demonstrating that in my service the private sector have been brought in and the public sector have beaten the private sector in competitions to run prisons and have shown themselves to be more economic and more effective.
  (Mr Neyroud) I think, which is a theme which some of us said, that targets should reflect only what is important and really important. Do not give us a plethora. Make sure they are consistent and make sure the ones we are being held to account for are the ones we have some control over.

Chairman: We have had an excellent session. We have had a wonderfully balanced group of people. The fact that at one point you started your remarks to each other with the words "with respect" meant that it was getting really interesting. We have learned a lot from you, both from your written evidence and what you have said to us today. We shall draw on it in all kinds of ways in writing our report. Thank you very much for your time.

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MR MALCOLM WING, MS KAREN JENNINGS AND MR MARK THOMAS

THURSDAY 30 JANUARY 2003

Chairman

796. May I welcome our witnesses this morning. It is a great pleasure to tell you that we are doing an inquiry into targets, league tables and associated matters. I think I am right in saying that you are the only voices of the trade unions that are part of this inquiry, and so it is a particularly important session. Having said that, we did have the RCN last week but you know what I mean. It turns out that I have told you a complete untruth, which is a good start! Thank you very much for coming. We understand that Dave Prentis is not able to come because of other business. It is a particular delight therefore to have Malcolm Wing, Karen Jennings and Mark Thomas. Thank you for your written evidence, which is very helpful to us. Would you like to say a few words at the outset?

(Mr Wing) Yes, thank you. Briefly, because it would be more productive to explore the issues in more detail, we would obviously like to begin by thanking you for inviting us to give evidence today. Karen Jennings is Unison's National Secretary for Health and Mark Thomas is a Policy Officer. I am National Secretary of Unison with wider Service Group responsibilities. We would like to begin by emphasising that Unison is committed to the delivery of high quality, efficient and responsive public services. We do not pretend that the performance of public service organisations is perfect in all respects. We certainly recognise and support the need for improvement in the services that the public receives. We support the principle, which is set out in our evidence, that, as part of the improvement agenda, the performance of public services must be evaluated and monitored. We also believe that performance monitoring can play an important role as a tool to help staff in particular in the pursuit of improved public services. We also consider that it is the right of the public to have access to information about the performance of public services and to challenge Government on the basis of that information in all public authorities where our services are below expectations. However, we have some concerns, which will no doubt emerge during the course of the next hour or so. Primarily, unless properly designed and applied, performance assessment mechanisms can have a damaging impact on service users and staff and can negatively affect the quality of public services themselves. We look forward to exploring some of those issues and elaborating on the written evidence that we have given. I assume that you are happy for each one of us, as appropriate, to respond to questions.

797. Yes, please come in as you wish. Would either of the others of you like to say anything? I see not. We start, as you have said already, from the position that all organisations have targets, do they not?
(Mr Wing) Yes.

798. I imagine that Unison has targets, does it not?
(Mr Wing) We do, yes.

799. Why do you have them?
(Mr Wing) In the last few years, it has become apparent that we cannot do everything that we want to do. It is important that different parts of the organisation are signed up to an integrated set of objectives and priorities. What we try to do is to develop a performance management process that enables us to match the resources that we have with the priority needs of the organisation. In doing that, we recognise the need both to assess, monitor and evaluate the implementation of those objectives and priorities, and target-setting in terms of recruitment or organisation is an important part of that process. It is an evolving process and, like all devolved organisations, we are having to grapple with what are the appropriate targets that should be set by the centre and those that should be devolved to our regions to set. In many respects, the problems and dilemmas that we face are the same as those that are faced by public service organisations generally. It is primarily about resource allocation and being clear as to what we are intending to achieve and being able to assess and measure the effectiveness of the work that we do.

800. It is interesting to hear you say that. All organisations, including Unison, depend on targets as part of performance management and all organisations, including yours, say that there are problems in doing that. Why should we not be excessively critical of Government, which is probably having the same kinds of problems that you are having?
(Mr Wing) I am not sure we have been excessively critical in the evidence that we have given. I think we have some real concerns, both about the assessment and monitoring mechanisms that Government uses and the fact that it seems to us that many of the targets Government imposes, it imposes inappropriately from the centre. We believe that local public authorities�and I emphasise the importance of local�whether they are NHS hospitals, local authorities or other parts of the ublic sector, need to have effective performance management systems. They need regularly to review what they do. They need to have a process, as we do, of engaging with and obtaining the views of staff, service users�in our case members�and citizens, maybe in our case external stakeholders and partners. For example, we think that what the Government has done around scrutiny is important. We think that scrutiny has an important role to play in that whole process. The recent scrutiny processes that have been developed in local government, and now extended to the role of scrutiny in health, are a very important part of that process of monitoring and assessing performance. We think that locally public authorities need to find ways of benchmarking and comparing what they do with what other public authorities do, and that they need to have systems and mechanisms for setting targets of their own. We are very much in favour of public authorities having effective performance management systems. Public services are important to us all; we know that if public confidence in public services diminishes, then we all suffer.

801. Should the fact that staff, including your members, might say that targets are onerous, demoralising and demotivating for them, in principle be overridden by these virtues that you are describing?
(Mr Wing) No. In fact, what I was trying to do was to engage in a process that might take us to whether some targets are appropriate or not, and most importantly I think the way that targets are perhaps used to name and shame staff. I think we say that in our evidence. The question you asked me was about us not being unduly critical of Government. I am trying to say that we support effective performance management, and indeed we support the need for external assessment as well. I have talked about performance management within public authorities. The Social Services Inspectorate has an important role to play; OFSTED has an important role to play; the Audit Commission has an important role to play. For Unison, this is really about balance. In recent years, we have seen a proliferation, almost an explosion, of regulation and inspection and/or external assessment. That is now a huge industry. The Local Government Association estimates that regulation and inspection cost local government �1.5 billion year. That is in terms of the cost of inspection itself and some work that they have done in terms of the cost of preparing for the inspectors. Anyone who is a school governor will know that a huge amount of time is spent in the weeks leading up to an OFSTED inspection. We all have to ask ourselves whether the benefits of that process somehow outweigh those huge costs, or whether those huge resources could be spent more productively in front-line delivery of public services. There is a growing complex web of regulation and inspection in local government. I have lost touch in this complex web of regulation and inspection in the health service. For Unison, it is not about whether monitoring and assessment of performance is right or wrong, good or bad. It is really a question of what it is for and whether it is effective. We feel that there is limited evidence of the effectiveness of this huge industry of inspection, target-setting and performance. Does it work? What is it designed to do? Is it designed to improve performance? Is it designed to inform choice? Is it designed to name and shame?

802. We have established, have we not, from your own description of how you use targets in your own organisation, that targets too have role. The argument has to be what you are saying, I think, as to whether we have the balance of the regime right?
(Mr Wing) Absolutely.

803. One of the points of targets and measurement as that works now is to produce certain effects on public organisations, one of which is that those which perform well against targets and measures are given new freedoms, are they not, and those that perform poorly are dealt with in a variety of ways?
(Mr Wing) They are.

804. Looking at your paper, you seem unhappy with that as a model. Surely this is a good use of performance measures, is it not?
(Mr Wing) I am not sure. This is the principle of earned autonomy. I am still puzzled, for example, under CPA, local authority Comprehensive Performance Assessment, why so-called high performing authorities, that presumably reflect a view of the world that emanates from Whitehall or the Audit Commission, are given freedoms in fact to become even better than they are, but local authorities, who may benefit from more freedoms or who may benefit from a lighter touch of inspection, are penalised. We do not believe that is right. We think it is not an appropriate mechanism if our objective is to drive up performance generally to say: if you perform well, then somehow you will be excused preparing strategic plans, or you will be given more freedoms to do X, Y and Z. If those funds can liberate initiative and innovation, then why are they not things that are available to all authorities?

805. Surely when organisations have proven that they perform well, it makes sense to relieve them of some of these onerous, external audit mechanisms?
(Mr Wing) As I say, inspection obviously has to be proportionate, but we have some real concerns about the impact of using targets that may be questionable or using assessments. There has been a lot of controversy about the results of comprehensive performance assessment this year. The stakes are very high. We have some real concerns that local authorities who do not satisfy the Best Value Inspectorate that they are performing at an excellent or high level are going to be effectively penalised. Can I just make a more general point? We have some real concerns about what it is that those local authorities have to do in order to satisfy the inspectors that they are entitled to an excellence rating. You know, from previous hearings, that we have concerns about the outsourcing and privatisation agenda. There is considerable evidence that the performance assessment often reflects a willingness on the part of the local authority to externalise services when, in fact, there is no real evidence that the externalisation of services improves performance.

806. Let me ask you about that as my final question. Much of your evidence seems to be informed by the idea that there is a standing threat of contracting out services and that somehow the measurement culture opens the door to that. Surely it is right, is it not, that if performance measures reveal that bits of the public sector are failing, they should be exposed to competition or contracting? Is that not just sensible?
(Mr Wing) I think the important thing is that we have confidence in what the inspectors report and confidence in the process. As I have said, that concerns us. I can give you the example of Exeter Housing Management where the year after it won a beacon council award, it was "ordered" by the Best Value Inspectorate to test the market against its services. You seem to be assuming that the process of outsourcing or market testing will, in itself, lead to improvements in performance. We are saying that there is no evidence of that.

807. I think the evidence is endlessly disputed. I am just asking you to clarify, as a matter of principle. If we have a failure within the public sector, and if it can be shown that there may well be either quality or price gains from having that service provided by somebody else, surely as taxpayers we would want that, would we not, even if we are members of Unison?
(Mr Wing) It is a difficult proposition because it is not one that we accept, in the sense that if all of the things that you say are true�

808. Which is the proposition you do not accept?
(Mr Wing) If your proposition is true, it would be hard to argue against it, but the evidence shows that the proposition is patently untrue and not supported by the evidence.

809. If it was true, you would support it?
(Mr Wing) What I said was that if the proposition was true, and there was evidence that the private sector could deliver high quality public services better than public authorities, then of course it would be hard to argue against that as a proposition. We have been accused of taking an ideological position on the issue of privatisation. All of the submissions we have made about that issue have been based on a proper assessment and evaluation of the evidence.

810. It turns out that you are entirely pragmatic about it. If it could be shown that there were gains to be had from contracting out, you would be in favour of it?
(Mr Wing) You pose a hypothetical question. I am not prepared to go down that road. What I have said is that all of the evidence shows that we are increasingly relying on competition and markets to drive up standards and drive down costs, and all of the evidence shows that it does not work. It is for the proponents of that to demonstrate that it does work, and then I think you shift the balance of the argument. From Unison's point of view, we have been content not to argue from an ideological stance on the issue of privatisation; we have been content to argue that there is an evidence base that it does not work. We have also been content to argue that the real driver of the privatisation agenda is often those very things that you talked about.

  811. Just answer the question. If the evidence base changed, you would change with it?
  (Mr Wing) We are always informed by the evidence. Would it be possible for Karen to make a comment about foundation hospitals because I think that is part of this earned autonomy?
  (Ms Jennings) I would like to say that it may be true that you could switch to a private sector company in a trust and find that you have a piece of that service that works better. That may be true. However, as Malcolm has articulated repeatedly, the evidence shows that it does not work. If, for example, you look at the contracting out process for cleaning services in hospitals, nine out of the ten services that were named as dirty hospitals were contracted out hospitals. That was seen as a solution back in the Nineties, and in fact the evidence shows now that those were dirtier hospitals. It may be true that it may work in individual hospitals, but it would be useful to examine the effect of the culture on an entire service provision. If you were to introduce a competitive market into the NHS, which is becoming more and more a reality, with funding flows, with foundation hospitals and so on, and greater involvement of the private sector, you will create a more competitive environment. I do not think we should lose sight of that. What we have experienced in the past of course was trusts becoming much more secretive; winners and losers; some trusts shining and other trusts failing, and so on. We do have concerns about foundation trusts. We have concerns because autonomy implies that you have been successful within a public sector system, within the NHS, and we are going to release you from it. If you have been successful in it, why are you going to be of any greater success out of it? There is absolutely no evidence to show that that is the case. Earned autonomy means that you are going to dismantle some of the benefits that we have had. For example, if you look at national bargaining, and I know Radio 4 had a report on it this morning, but it is absolutely true, we have been embarking on a four-year programme of national bargaining for staff and we have now come up with some proposals. At the point of coming up with proposals, it is being said that trusts are going to be freed from those pay levels, terms and conditions of service. If that is the case, what is going to happen in those areas where there are foundation trusts? It means that they are going to be able to take staff away from other trusts; they are going to be much more attractive. Who wants to work in a failing trust? If you can go somewhere that is a shining example, then you will find that you are distorting the labour market within the localities.

Chairman: I am anxious that we do not wander too far from our main centre of inquiry here, although that is extremely interesting and there are connections.

Mr Lyons

812. For the record, I must declare that I am a card-carrying member of Unison, unless you have expelled me in the past few weeks! Malcolm, on the question that Karen just finished on, and I do not mean in particular foundation hospitals, in the evidence you say that Unison welcomes extra resources being given to organisations that score well. Could the Government not say that is exactly what it is doing with foundation hospitals?
(Mr Wing) I think Karen has already explained that with foundation hospitals there are some very difficult issues around the fact that these are organisations that have worked successfully inside the NHS and they are now being offered freedoms and opportunities to work outside the environment in which they became successful. Our view on the question of additional resources for scoring well is this. There are some real concerns about who sets the targets, whether they are set at national level or at local level. As far as we are concerned, there is a sense in which it is appropriate in some sectors, and the Health Service is one and education is another, where the community tends to demand national standards and oppose the development of what we see as postcode lottery and prefer national standards right across the two sectors. We have been interested in the work that the LGA has been doing with Government around the issue of PSAs where in fact central government has identified targets. It comes somewhere between giving local authorities the autonomy that they asked for to develop their own targets, which are responsive to the needs of the local community, and centrally-driven targets. We are certainly supportive of the experiment that is taking place�and it has not been evaluated yet�in local government whereby local authorities hone in on national targets, stretch those targets locally and are allocated additional resources to meet those stretched targets at local level. It does not satisfy Unison's overall demand, that the balance of funding in local government between central government and local government ought to change. We think local authorities ought to have greater power to raise more of their own resources through local taxation or the council tax system, but in terms of a half-way house the idea that local authorities can negotiate with central government for additional resources to meet stretched targets is something to which we are giving a qualified welcome at this point.

813. As part of that argument, can you understand why the Government is suspicious that if we were to give the targets to local authorities themselves for the staff and management team to make that decision, there would be a lack of ambition about where that target should be and that you do need a national pressure on them continually?
(Mr Wing) I think we have made it clear that we recognise the need for national targets and we support the need for local targets. We are focusing a bit on local government. It is clear that central government seems to have an acute mistrust of local government. Our view is that local authorities should be trusted. It is one of our most important democratic institutions and local authorities accountable to local communities ought to be entitled and trusted to decide priorities that reflect local needs rather than to reflect a view of Whitehall as to what local priorities are. The fact is that we need to do something to rejuvenate local democracy. Turn-out in local elections is falling. The powers of local authorities are being increasingly stripped away by earmarked funding or regeneration budgets that bypass the local authority. Our view is that if you trust local authorities to develop local targets, albeit within a national framework, accountable to the local communities, reflecting local needs, engaging with local communities, staff and users, on what the real priorities are, then that is the right balance of power in the delivery of these important services. We all have our own views on what local communities want. There has been a very recent view, and it is reflected in the way that resources are allocated to local government, that the only things that matter to local communities are health and education and yet there is now a growing realisation that what are described as some of the "livability" issues, the issues that local authorities are not being allowed to spend money on, are just as, if not seen by many members of the community as more important: street care, decent street lighting, clean streets, a decent environment, decent refuse collection and waste disposal. It is often in these areas that local politicians can reflect the needs and aspirations of their local communities and set their own targets, rather than being dictated to by the centre. I think that the PSAs are part of an important development in that process.

  814. We have heard in evidence, in the past few months that we have been taking evidence, people saying that the targets regime brings a tremendous pressure on local managers and local staff to fulfil the targets very often. We have heard quite worryingly that there is a lot of evidence of cheating when it comes to targets. Do you have any evidence of that?
  (Mr Wing) Outside of what we have put in our written submission, it is simply anecdotal. I suppose it is sub judice to talk about the case of the finance director who has recently taken his NHS trust to an employment tribunal on this very question. As the Chairman has said or implied, the benefits that can be derived to local authorities in particular of being labelled as a high performer raise the stakes considerably. There are two issues: first of all, do the targets which lead to the additional freedoms and resources reflect local needs, or do they simply encourage local authorities to meet central government targets that reflect Whitehall's view of the world? I think there are some concerns about that. As we have seen from the recent CPA, poor performing local authorities�and I use the words in inverted commas because the whole CPA process is being contested in a number of quarters�are threatening the careers of whole swathes of chief officers. I think the temptations to fill in the form correctly, or to fill in the form according to the way that it is going to be marked by the inspectors, or to be economical with the truth, are enormous. We have seen some of that. The stakes are very high. There has been evidence outside the one example I gave where there have been allegations as to whether ambulance services have been fiddling the figures in terms of response times. We must have an open and transparent system where we tolerate failure a bit more. We are told constantly by politicians that the public sector has to be prepared to take more risks. The problem is that when it takes a risk and fails, it is pilloried by the press and often by politicians. There is a problem with all this form-filling. In fact, one of my colleagues was saying earlier today that there are organisations out there who are helping public authorities ensure that they get a high performance rating, not on the basis of the way that they deliver services but in the way that they respond to the inspectorate and fill in forms, et cetera. It could be a problem. I do not know whether Karen has any examples on this point.
  (Ms Jennings) As Malcolm says, this is largely anecdotal, but one example is Wessex Ambulance Trust, which is heavily criticised, by the Audit Commission in fact, for being creative with the figures. Also, there are numerous accident and emergency departments that have ways of coping with trying to meet the targets. It is about what constitutes a bed and so on. There is evidence there.

Chairman: We are going to explore some of those after your session with Sir Nigel Crisp.

Mr Trend

815. You said that there are organisations that help public authorities, as it were, fill in the forms. What sort of organisations are they?
(Mr Wing) There has been a proliferation of management consultants and other sorts developing in the public services generally, as we have seen: new public management and the use of targets, et cetera. I was simply repeating the fact that there are organisations that will help�and I cannot name them�local authorities in adopting an approach to the inspectorate that will create a positive impression of the local authority itself. It is often about how you fill the forms in, how you prepare for inspections, and pushing all the right buttons to ensure that the things that the inspectors value are those that the local authority accentuates and promotes.

816. Is this only to be found in local authorities, hospitals and other such things?
(Mr Wing) I have very limited experience of the work of CHI and the other inspectorates. It is undeniable that the subjective views of the inspectors are open to influence and I think probably manipulation as well. We have just seen it in CPA and we have seen this through CHI. In CPA we have five categories of local authority from excellent to poor. APSE, as we say in our evidence, has produced a report highlighting the very different approaches that the inspectors have towards the job that they do of inspection. Some are very professional; some come completely unprepared for the process. There are some real concerns. John Stewart has written widely about who inspects the inspectors. Who ensures that the inspectors themselves are up to the job? Who ensures that we have maximum objectivity? Who sets the standard for the inspectors themselves? As I say, there are some real concerns obviously about the way that you fill in the form, or the way you receive the inspector, or the way you accentuate some of the more positive aspects of service delivery, given the high stakes, and that these could have a significant effect on whether you qualify for a lighter touch, or the way you produce your strategic plans or enjoy some of the freedoms that come with the label "high performance".

817. Can I turn to education for a moment. You seem still to have a fundamental problem with league tables. This is going back a long way now, but league tables provide evidence to the public which has been known by local education authorities and government bodies for years. It seemed at the time only reasonable that this information could be shared with the public. My own experience of constituents who have used league tables is that they use them intelligently�they have other factors in their minds when they are choosing a school for their children�and that overall probably league tables have done more good than harm, and yet you remain implacably opposed to them? Do you think we can put this cat back in the bag?
(Mr Wing) One of the problems is that if you support more information being made available to communities about the way that their services are performing�and I think we all support that and it is vital there is that degree of knowledge and understanding of the performance of local services�you then begin to ask some question about what that information is for. That information may simply be about informing the democratic process, that people are entitled to know how well the services provided by their public authorities are managed, and that is about informing their choices at the ballot box, or their choices or their activities as campaigning organisations. We do have a dislike of league tables. The problem is that if you put information in the public domain in a way that is quantifiable, then whether you put it in the form of a league table or whether the press do it, the fact is that you do categorise organisations as either high performing or failing. The question is: what is that for? Our evidence shows that less than 50% of the parents of children use league tables, or even look at them, in order to inform choices about where there children are educated. The real question is: is that information going into the public domain to inform choice or is that information going into the public domain as a way of naming and shaming poor performers in order to drive up standards? First of all, often that is crude and often this information is questionable. We have had many examples where public authorities, hospitals and schools have challenged the way that information has been interpreted and used. There are questions about the purpose to which that information is going to be put. I woke up one morning to discover that my local hospital was a no star performer, the worst in Britain. I do not know what I was supposed to do with that information, other than panic. I did feel like ringing the Department of Health and saying, "Look, I live in Brighton. According to these performance league tables, my local hospital is terrible. What do we do? Do we go somewhere else? Do we exercise choice? What do with that information?" It is demoralising for staff. If I had been someone contemplating applying for a job at the Royal Sussex, I think I would probably have cancelled my application. Why was it a poor performing hospital? Was it because of crude statistics or where there other reasons? This is just about the crudity of it. I have to say that often it is the local media and politicians who tend to focus on failure.

818. Can I bring you back to education at the moment? You talked about a value-added means of assessment. There are new systems. What do you think of those?
(Mr Wing) It is a criticism that was levelled and it is one that has been met. Of course, the more you refine the way that you put the information into the public domain and the more that you acknowledge that that school, by any standards, is doing a magnificent job in incredibly difficult circumstances, the better. I repeat the point I made, that not everyone can exercise choice. Is naming and shaming a strategy for naming and shaming public institutions in order to drive up standards? If it is, given that we have had it for a long time now, what evidence is there that naming and shaming in the form of league tables has driven up standards?

819. Some voluntary aided schools have been seen to be working in numeracy and literacy in some specific areas.
(Mr Wing) Numeracy and literacy are specific targets that were set by Government, that were driven by Government, that were rigidly enforced by Government.

820. There has been an overall improvement, though.
(Mr Wing) In fact, the Improvement and Innovation Unit raised some questions about whether the gains have been as significant as claimed by the DfEE. That brings us right back to our original point: if you have lots of targets and do not align target to resources, then all you are going to do is to set up people to fail. If you have focussed targets that you have proper resources, then you are likely to succeed. We find that in our organisation. The question I ask is: do school league tables help the most disadvantaged in our community or do they simply provide information by which those who can exercise choice, do so? What are the implications of saying that your local school is rubbish just so that you can drive your car across town, or you can move house? What are the implications for standards in those schools that are defined as poorly performing? Again, the evidence is not particularly encouraging that naming and shaming has improved standards.

821. The system in which you have both the league tables and a measurement of how much a school has improved year on year is, surely, not a bad system in terms of exercising what limited choice people might have?
(Mr Wing) As I say, it depends what the agenda is. I think if the Government's real agenda is to drive up standards, which it is presumably, and we all support that, the question then is: what contribution does naming and shaming in the form of league tables make to driving up standards? We do not see the evidence. We see the evidence is of very demoralised staff and communities whose children are often stigmatised and communities which lose confidence in their public services. Personally, I think it is bad politics. The present Government is fuelling what is almost an obsession with failing public services. I think that is a real worry.

Chairman

822. I will have to ask you to be a bit briefer and crisper with the answers if we are going to get through in the time. As a footnote to Michael's questioning, the impression that is created by some of what you are saying is that you sign up to the ends but you do not like any of the means. Do I understand you to say that you do not like crude league tables but you do like sophisticated league tables?
(Mr Wing) I think there is an issue. I do not think league tables is the appropriate way of informing communities?

823. Any kind of league table?
(Mr Wing) I do not think it is. To be honest, I think that the problem with league tables is that somebody is going to be at the top and somebody is going to be at the bottom.

824. Indeed, that is the point of the league?
(Mr Wing) Well, of course, but what is the point? You tell me what the point is.

825. There is no point attacking crude league tables if what you are really attacking is league tables?
(Mr Wing) We are saying it is important that communities have good quality information on the performance of their public services. Putting them into league tables we do not find at all helpful. It is like CPA, in a way. CPA compares local government with itself, and therefore you are going to have some at the top and some at the bottom. It does not really tell you anything about the performance of those local authorities, and it does not tell you anything about the performance of those schools or hospitals. All it tells you is that they are defined by some measure as not being up to scratch.

826. You do not think the CPA tells you anything about the comparative performance of local authorities?
(Mr Wing) I do think it tells you something about the comparative performance of local authorities. What I have said is that there is a real concern. What it tells you, if you accept the methodology is right, is that those at the top are better overall performers than those at the bottom, but there are questions about the methodology. I am saying that it does not really tell you anything about the performance of those at the bottom, in crude terms. It tells you that they are less well performing than those at the top, but does it tell you whether they are bad? They could be meeting the needs of their local communities but, relatively speaking, not as well as those at the top.

827. Even the CPA or more sophisticated league tables you are against but you are against all league tables?
(Mr Wing) If you want to characterise it like that, but what I am saying is that one of the problems with CPA is that it compares local government with itself rather than making an objective assessment of the quality of services that local authority is providing. We know that there are a few local authorities in desperate need of improvement. That is a given, and I do not defend poorly performing local authorities. They do a disservice to the argument for high quality public services. What I am saying is that this is an argument about relativities. Some people have argued that what a school needs to do is to produce an honest assessment of its general performance in the form of a prospectus. There are questions about the objectivity or subjectivity of that, but that might inform parents much more.

828. Presumably poorly performing local authorities should be booted out, should they not, by the democratic process?
(Mr Wing) Poorly performing local authorities should be helped to improve.

829. You were just talking about accountability to local electorates. Presumably local electorates who discover that they have poorly performing local authorities might feel like exercising some democratic power by kicking them out?
(Mr Wing) Of course.

830. Unison's view is that we should boot out all poorly performing local authorities?
(Mr Wing) You really do mischaracterise what I am saying.

831. I am trying to understand what you are saying.
(Mr Wing) I am trying to answer your question. What I am saying is that poorly performing local authorities need to be supported to deliver improved services. There are mechanisms to support that: the Association of Public Service Excellence and a range of organisations which can help local authorities to improve their performance. I have also said that my view is that local authorities should be accountable to their local communities for the delivery of high quality public services, and they should face their constituents or voters at the ballot box.

Chairman: It may be that we are saying the same thing.

Kevin Brennan

832. We will have to pick up the pace to meet our own target to get through the business. You said in your paper that performance monitoring can act as an aid to good management, enabling staff to identify strengths and weaknesses and evaluate progress; likewise targets can provide a useful focus for staff, if appropriately set and intelligently applied. Can you give us some examples of those sorts of targets?
(Mr Wing) In terms of useful targets, obviously there is a range of useful targets in the NHS which inform clinical audit and overall performance. They might be about the number of hours that patients spend on trolleys; they might be about re-admissions. That can be very useful in informing clinical audit and the overall performance of the hospital. It might be about waiting times for admission.

833. You have given me examples, and I am grateful for that. In principle, since you have accepted that targets can be a useful tool if appropriately set and intelligently applied, what are the criteria that make them appropriately set, and not just the examples, but what is it that makes a target appropriately set and what is it that makes a target inappropriately set?
(Mr Wing) Can we distinguish between national and local authorities? As I said earlier, there is a general view that the NHS is a national service and people expect national standards. It is appropriate, in those circumstances, that standards and targets are set at national level.

834. But you also said it is important that they are locally?
(Mr Wing) Are we talking about the NHS at the moment?

835. Yes.
(Mr Wing) In terms of local targets, if you look at any PSA between a local authority and the Treasury, or the Office of the Deputy Prime Minister, there is a process through which there is a national target but the local authority might decide to stretch that target at local level. So there might be a national target. We were looking at one for Tower Hamlets, which is about deaths on the roads, where, in terms of a national target, they can reduce the amount of deaths by X% but the local authorities say, "We would like to put additional resources in this area, because that represents a local priority and what we would like to do is to negotiate with you additional resources to raise that target or to pull those death rates down even more". It is about reflecting the needs of local communities.

836. We have had some interesting evidence from the Staffordshire Ambulance Trust during the course of our inquiry. Their Chief Executive, Roger Thayne, came along and told us about some of the reforms that have gone on in the Staffordshire Ambulance Trust. Were those the sorts of reforms that you supported?
(Mr Wing) I do not think the relationships between Unison and the Staffordshire NHS Ambulance Trust are particularly good.

837. Why is that?
(Mr Wing) I think it is about management style. I do not want to show any disrespect for someone without having a bit more information, but it is about management style. Our evidence clearly says that you have to engage with users and staff. At the end of the day, staff deliver these targets. Handing targets down from on high is a very different process to bottom-up targets that staff feel able to deliver and own.

838. Are not staff ultimately motivated by delivering successful, excellent public services? When you get a result, as in Staffordshire, which did involve rolling over perhaps some of the opposition to things like closing down ambulance stations in the wrong places, putting defibrillators out into the community and making sure ambulances were near the places they need to be when people have cardiac arrests, and that produces a result whereby if you have a cardiac arrest in Staffordshire you are 14 times more likely to survive it than in other parts of the country, that ultimately is what would motivate public sector workers, who are motivated by a public service ethos. What they really want to do is save lives and get the job satisfaction out of providing those sorts of excellent services. Ultimately, from what you have said to us today, is there not a conservatism about that approach and an unwillingness to be an innovator yourself, if you like, to be at the forefront of innovation actually to provide that excellence in public service?
(Mr Wing) I think the public sector's record of change and innovation is good. Health and local government have gone through huge changes over the past 15 or 20 years.

839. Can you give us an example of something that you have really initiated and supported?
(Mr Wing) The developments of home care, the re-skilling and skill mix changes in the Health Service, change in the boundaries between nurses and non-registered staff, taking on the responsibilities of medical staff: there are also huge community-based initiatives. The home help service has changed into a home care service. People are now being treated in communities who were previously treated in institutions. Psychiatric hospitals closed and there was the development of alterative community psychiatric services. Refuse collection in terms of wheelie bins is another innovation. There are so many examples.

840. Are these all things that you have initiated and supported from the outset and not opposed?
(Mr Wing) These are all issues on which we have worked in partnership with public authorities and with Government and we have supported, provided the right framework is in place. Those managers or leaders who make staff feel that they are going to be part of the solution and who do not see them as part of the problem are the most effective at delivering innovative change in our public services.

841. Do targets not have some role to play in that?
(Mr Wing) Yes, and that is why we said so in our evidence, but you seem to give an example�

842. It is difficult to tease out of you what you think are good examples.
(Mr Wing) We are trying very hard to give you examples. We get a bit tired of the assertion which lies behind some of the rhetoric about the services that our members provide in health, social care and education. Another example is teaching assistants. We have been at the forefront of developing that changing role between classroom-based teachers and teachers' assistants. You have given an example in Staffordshire, with which you are obviously familiar. My perception is that we had a Chief Ambulance Officer there who decided to throw out the textbooks on managing change. The Health Service is littered with the bodies of people like that, those who have decided that they can bully, cajole and threaten staff and force through change. They end up with a demoralised workforce and recruitment and retention problems. They might be able to deliver a quick fix but we will only deliver the public services that some of us want if we work in partnership and recognise that staff are the greatest asset and that staff need to feel part of the solution.

Kevin Brennan: So we need to re-visit that example and look at your prediction that what you have there is a quick fix and not an improved quality public service?

Chairman

843. As a Staffordshire Member of Parliament, you describe the Staffordshire Ambulance Service as a quick fix when it is demonstrably the best ambulance service in the country. That does not just come from them but from the Consumers' Association, which was here a week or two ago saying the same thing. This is not a quick fix but a turnaround of that service.
(Mr Wing) As I say, and you know more about that than I do, all I am saying is that I know if you are going to deliver effective change, and I have given lots of examples of where that has happened, unless people take a different view, it is about ensuring that the right framework is in place and staff do not feel the victims of change but part of the solution. All the evidence shows that effective change management is about taking people with you. You have described Staffordshire as a quick fix.

844. I am sorry, you described it as that.
(Mr Wing) I do not think I did. I think you did.

Kevin Brennan: The record will show who said what.

Mr Hopkins

845. I should say at the start that I am a Unison and a GMB member; I worked for Unison and one of its predecessors for 18 years and Karen and Malcolm are friends as well as former colleagues. I am also Joint Co-Ordinator of the Unison Group of MPs. I speak from that perspective. I have one major question. There is an implication in your paper, which I accept, that the whole regime of targets and performance indicators is about privatisation and trying to promote contracting; fragmentation of the public services with a view over the long-term to pushing people into the market and into the private sector. Do you not think it is an extraordinary irony that the one area where this has been pushed to extremes is the railways, and the sub-contracting of maintenance and railway construction in nine years has seen costs rise by three times for maintenance and four times for rail replacement? Do you agree with that irony for a start, that the Government is pushing the case for more private contracting and yet the evidence is completely against it? Do you have lots of other evidence from the public services you represent, health in particular, where privatisation and contracting out in local government, and so on, has actually had the same kind of result?
(Mr Wing) As I said earlier, it is clear that the inspectors in the process often have a privatisation agenda. We have come across numerous examples where inspectors promote models of service delivery with private sector involvement, strategic service delivery partnerships and PFI, forcing councils to test the market, even when there is a record of excellence. I think a real driver is the lack of capital investment. There is an ideological drive towards the privatisation of many public services, which is a mistaken belief in our view that competition drives up standards and drives down costs. But there are other issues as well, such as a lack of capital investment and a demand for revenue savings, that are often unrealistic. Specifically, in answer to the question, there is a growing body of evidence that the private sector is not delivering high quality, public services. Last week we had the Audit Commission's report on schools. I am not sure whether that will inform any of the deliberations of this Committee, but it demonstrates that PFI schools are not of a high quality and have not delivered the value-for-money savings that it was alleged would appear. We have produced reams of evidence to show the problems that PFI hospitals and schools have caught in their wake. A report was published yesterday on housing benefit, which showed that the results of private sector involvement have been very mixed. In the past, I think you have looked at some of the housing benefit failures of the private sector, which again in disadvantaged communities can wreak havoc: IT Nets' failure in Hackney was devastating. The IPPR Commission produced a report three or four weeks ago, which again questioned the value-for-money claims that were made. Audit Scotland has done critical reports. And there is our own evidence and research. We have produced and published lots of evidence to show that the alleged benefits of private sector involvement have not been delivered. That is why we are happy to stand by the evidence rather than to engage in a sterile debate about public good/private bad. We only have to look at the evidence, and the most extreme example is of course rail, in our public services. That is not to say that there is no evidence of some public sector failings. We have acknowledged those, but this view is that the private sector has the answers to failing public services. Indeed, most of these companies have now moved away from that original market bid when they said that they wanted to turn around failing services. For example, Capita has said it is not interested in failing services. I do not know if there are other examples.

Chairman: That takes us into a different inquiry, broader than we need to go at the moment. We have had a very useful exchange of views. I am sorry if it seemed a bit robust in places but, if you have seen our sessions, we do tend to be robust. That is the only way we can tease out the issues. We thank you for coming. We have profited from hearing from you.

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SIR NIGEL CRISP KCB AND MR HUGH TAYLOR CB

THURSDAY 30 JANUARY 2003

Chairman

846. Thank you very much for coming to help us with our inquiry. The health area is one that we have referred to many times in looking at targets, league tables and all the other measurements. We wanted a session with you to tease out some of that. Would you like to say anything by way of introduction?
(Sir Nigel Crisp) I thought it might be useful if I said something briefly about the Department's approach to target-setting and indeed on the question of numbers of targets, which I see has been in your evidence very considerably. I start by making one basic distinction, which is between standards and targets. The NHS runs an enormous number of different services, and in all those services we need to have standards. When we have our heart attacks, it would be very good to know that we actually have qualified nurses trained in the appropriate way and that they are working within best medical practice and using the drugs of choice to deliver services for us. Those standards are about providing a professional and appropriate service. They are not targets; they only become targets when we specifically say that we want to improve a standard in a particular way with a timescale and a target end point. In addition to those standards, of which there are many hundreds within the Health Service, and there should be, we have a small number of national targets, which are very specifically about driving improvement, as I have said, getting value for money, and frankly, of course, securing accountability to Parliament. Over the last year we have listened to, and understood, the concerns about the apparent large numbers of targets, and indeed some of the mythology in this area. My Secretary of State on a number of occasions has talked about the importance of bringing down the burden on the NHS and, as a result of that, we have been reviewing the number of plans we ask for, reviewing the number of targets and reviewing the whole question of monitoring. In doing that, we have taken a lot of advice and involved patients' groups and union representatives and others. We are therefore looking at how we can set the minimum number of targets compatible with securing proper accountability to Parliament. Where are we now? In the autumn, we published, and I do not know whether you have seen it but I have a copy here, our Planning and Priorities Framework for the next three years in the NHS, which shows how the 12 targets we have from Government convert into 44 targets for NHS and social care organisations and 18 for the NHS as a whole, a total of 62. I have copies of the definitive list of targets, should you wish to see them at any point. I can make that available to the Committee. These are the targets which we set nationally and which we then said that we would performance manage, monitor and expect to be reflected in all the local plans. These are the national targets. This is the minimum number we believe we need in order to secure accountability to Parliament. I have also included for you in that piece of paper 26 further assumptions about capacity. These are things, if I may put it like this, such as assuming if you are going to be able to deliver these targets, that you need to reduce bed occupancy, those sorts of examples. That is not a target; it is not mandatory; it is an assumption. There are actually 62 targets on which we performance manage people. I am sure lots of questions will arise from that but perhaps that might explain our whole approach, the fact that we have been listening to people's concerns about this, and the importance of having absolutely clarity about what we are talking about and what we expect in terms of performance from the NHS.

847. That is extremely helpful. Let me try to see if I have understood what you have told us. You are saying that there are 62 targets that come from the centre.
(Sir Nigel Crisp) May I make one qualification? From April 2003, from this year: the targets that we are setting now are 62 in number.

848. There are 62 from the centre through the system?
(Sir Nigel Crisp) Exactly.

849. How does this correspond with what the RCN witness told us last week, who said that nurses were working to something like 400 targets?
(Sir Nigel Crisp) I noticed that, and I do not know is probably the short answer. It is worth pointing out that there is quite a lot of room for confusion between standards and targets, as I indicated beforehand. Sometimes I hear people talking about targets, which are things they simply have to do as employers, like introducing the Race Relations Act Amendment Bill or breaking even or delivering their statutory duties. I think there is quite a lot of confusion in this field, and that is why it is very important that we have produced the definitive set of the national targets we expect the new money coming into the NHS to deliver for us over the next three years. The other point is that they actually run over a three-year period.

850. You gave the impression that you wanted to row back on numbers. Are you saying that the 62 now is the right kind of number, or would you like to row back a bit further?

(Sir Nigel Crisp) I think it is probably right. We think it is the minimum number because, frankly, the NHS is a big service and, let us remember, these targets do not apply to every organisation. We have mental health organisations, which of course do not have to do anything about the targets in cardiac surgery or about the targets for cancer, and things like that. We feel this is the right number, the minimum number, that you can do, frankly, to make sure that we preserve our accountability for delivering the improvement which Government is expecting us to do.

851. Clare Short when she came a week or two ago told us that she thought no department should have more than about eight targets. Do you think 62 is a bit over the top?
(Sir Nigel Crisp) Obviously I cannot comment on her views on the matter. I do not know whether you have looked at the 12 targets that we have been set by Government. They cover things as varied as cancer, coronary heart disease, mental health, care for older people and value for money. This is a very big organisation. We have a very big range of services. You will notice, when you look at our targets, that, for example for mental health, probably something like about ten of those targets apply to mental health trusts.

852. I do not want to go into too much detail here, but I notice that we have just had a National Diabetes Framework this last week that has its own set of targets?
(Sir Nigel Crisp) That is a very good example of our changed approach. You may or may not have looked at this in detail or understood what the diabetes groups have said to us. This is a national service framework which says: these are the standards. There are two targets in there and those are included in our 62. There are a lot of standards. In the diabetes groups, and this is a very important point with which your Committee will be very familiar, all the individual disease groups want there to be lots of targets. Everyone is pushing.

853. We have heard from many of our witnesses that they think that targets should, as far as possible, be locally owned. The NHS is very much top-down, centrally driven; that is the kind of service that it is. Are targets also being set locally that we would have to add to our 62 if we were doing any local tallying?
(Sir Nigel Crisp) Undoubtedly they are, but again let me just give you a national target so that we know what we are talking about. The target is to improve the management of patients with heart failure in line with the NICE clinical guidance and set local targets for the consequent reduction in patients admitted to hospital with a diagnosis of heart disease. The national targets, in many cases, are about saying to people that they need to set local targets to deliver this aim of improving the service for people with heart failure.

854. We may have to convert these into a number of local services?
(Sir Nigel Crisp) That again may be what people do, and in some areas, and may I take the example of the East End of London, and I do not know if there is anybody here from the East End of London, diabetes is a very big issue among the population. It would not surprise me at all if the health authority there did not decide to set some local targets and to go further and faster on the diabetes national service framework than perhaps in Shropshire.

855. I am sure colleagues will want to return to some of that. May I ask you about a couple of other things before I hand over to colleagues? I asked a written parliamentary question this last week of the Secretary of State for Health about when the Department's autumn performance report for 2002 would be published. I received an answer from Mr Lammy, which says that in December 2002 the Department published the Chief Executives' Report on the National Health Service setting out progress during 2001-02 for the first six months of the year. That is all very interesting, and indeed I have a copy of that, which I have looked at to great profit, but it is not the autumn performance report promised by the Chancellor in the Spending Review, is it?
(Sir Nigel Crisp) We have had discussions with the Treasury about both how we publish the Public Service Agreement and also about how we report on that, and we are working through the ways in which we are going to do that in a bit more detail. The discussion we are having is that the Planning Priorities Framework, which I referred to earlier, is in essence the same thing as the Public Service Agreement, because it shows how it is being translated into practice. We have also produced the Chief Executives' Report, which picks up most of the issues, and we are putting in an appendix to that, which will make sure that we cover all the PSA targets. We will do that on a continuing basis.

856. I am sorry to bang on about this, but the whole point about his reporting against targets was so that we could see across Government how it was all going. What the Chancellor said in the Spending Review was that the Government was "strongly committed to regular public reporting on progress against PSA targets" and that this would happen through the autumn reports. We have five departments which so far have not delivered these autumn reports, of which the Department of Health is one. When they are asked about them, they refer us to another document, which does not do the kind of reporting against PSA targets that we were told the autumn reports were going to do.
(Sir Nigel Crisp) It covers the majority of the issues within the PSA, and that is why we are developing it to make sure that it does cover the entire PSA because it is important that we report not just on the PSA but also on performance more generally in the NHS.

857. Is there to be an autumn report from the Department of Health, as promised by the Chancellor, on progress against PSA targets?
(Sir Nigel Crisp) There is, as I understand it, to be additional material added to this report, which will provide that information.

858. So there is to be an autumn report, even though now we are almost in February. Last autumn's report is still going to appear, is it?
(Sir Nigel Crisp) We are going to publish an annex to this document, which will cover the PSA, yes.

859. Do you know when this is going to happen?
(Sir Nigel Crisp) It will happen soon. I am afraid that I cannot give you a date.

860. In NHS terms, how soon is "soon"?
(Sir Nigel Crisp) Two weeks, I am reliably informed.

861. It will appear in February?
(Sir Nigel Crisp) I would be happy to say February.

862. Will it still be called the autumn report?
(Sir Nigel Crisp) We will make sure that it is cross-referenced so that it can be identified as the autumn report.

863. That is very helpful. Could I ask you a couple of other things very quickly? In terms of the validation of performance data, and this is always a big issue as to whether we can actually make all this stuff stack up, the suggestion has come that the new inspectorate, CHI, should have this role in the external validation of these performance data inside the Health Service. Can you confirm that in fact that is the role that CHI is going to have?
(Sir Nigel Crisp) Amongst other things, yes. The point about having an external inspector is its independence and that it will be reporting on the validity of performance, yes.

864. Queries have been raised in the Public Accounts Committee recently about the fiddling of figures. It is said that it was crucial that CHI should be able to have this validating role to make sure that all that is stopped. Is that going to happen?
(Sir Nigel Crisp) What we have said, and indeed I was there, to the Public Accounts Committee is that CHI, as the external inspector, will be doing just that and in the short term, as you may also be aware, partly in response to that Committee, I decided to ask the Audit Commission to review the validity of waiting list figures specifically. We take this issue extremely seriously.

865. So from now on questions of fiddling figures, the nature of the integrity of the reporting of data is all going to be taken care of by the new arrangements?
(Sir Nigel Crisp) Let me just be clear that they are not in place yet, but they will be be in place and the intention is to do precisely that, so when they are reporting on performance in the NHS, they will be putting their mark against the validity of the be information.

866. Let me just ask you about this recent report about alleged problems in meeting the key 2005 waiting time. In terms of the targets you are working to and the key waiting time targets, my understanding is that the Government is saying that it is on target to meet its interim target of the 12-month wait by 2003, but the leaked memorandum from Michael Barber, the head of the Delivery Unit, allegedly says that the Government is not on co