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Cabinet Office

Volume 516: debated on Wednesday 20 October 2010

The Minister for the Cabinet Office was asked—

Volunteering (Young People)

In the current financial year, the Department has provided £39 million in grants to the v organisation. On 22 July, the Prime Minister announced the introduction of the national citizen service to give young people an opportunity to develop the skills needed to be active and responsible citizens, mix with people from different backgrounds and start getting involved in their communities.

I thank the Minister for his response. At a fringe event at the Conservative party conference, I understand that the Minister for the Cabinet Office was quoted as saying that in his opinion the big society would be “chaotic and disorderly”. That being the case, I feel that his heart is perhaps not in it. How can he go on to encourage young people to volunteer so that they can pick up the right skills and be employed fruitfully in the future?

We are absolutely committed to that, and the national citizen service will be an extremely important opportunity to connect young people with their own power to make a difference in their communities. I know that the hon. Lady took a strong interest in that through her work on the Select Committee on Children, Schools and Families. If she had had the opportunity to talk to some of the young people who had taken part in this year’s pilot, she would have been as impressed as I was by the transformative effect that it had on them and on how they view their community and their own power to make a difference. We are very excited about it.

Voluntary organisations in my constituency rely on the great efforts of many people who are retired, and they are crying out for younger volunteers. Those volunteers need not just be teenagers, however. What plans do the Government have to facilitate opportunities for volunteering by people of working age?

We have planned a series of initiatives for the forthcoming years to promote wider volunteering and to connect people again with their own power to make a difference locally—that is the heart of the big society. I cannot be drawn on the detail of those plans, because they are subject to the spending review.

If voluntary service for young people is to work, the third sector has to still be alive. This afternoon the Chancellor is going to try to drive a steamroller over the big society. Can the Minister explain why, in answer to parliamentary questions from my hon. Friend the Member for Glasgow Central (Anas Sarwar), three quarters of Whitehall could not say what contracts they had in place with the third sector? How can the Department protect the third sector from cuts this afternoon if it does not know what contracts are in place? Is the Minister not, in effect, flying blind?

I suspect that the right hon. Gentleman will eat his words later when he hears the Chancellor. I do not see any steamroller in evidence in relation to the big society, which is absolutely central to the Government’s mission. A central strand of that mission is to open up the public services to a more diverse set of providers, including and specifically contributions from the voluntary and community sectors. As the right hon. Gentleman well knows, they are in a position to add a huge amount of value. That is a specific commitment of this Government, and we are going to deliver on it.

Government Procurement

2. What steps he has taken to increase the efficiency of his Department’s mechanisms for Government procurement. (18049)

8. What steps he has taken to increase the efficiency of his Department’s mechanisms for Government procurement. (18055)

Procurements of major projects by the British Government have typically taken 77 weeks. They have frequently involved the extensive use of external consultants. That process is costly and wasteful, excluding small businesses, social enterprises, and voluntary and charitable organisations. That results in procurements that are too often uncompetitive, delayed, expensive and ineffective. We are taking steps to streamline the process. In the meantime, we are renegotiating contracts with the bigger suppliers to the Government on a single-customer basis, thus leveraging the Government’s buying power. That will deliver some £800 million-worth of savings in this financial year alone.

Sir Philip Green’s report showed just how little time the previous Government afforded to the basic principles of cost-effective commissioning and procurement. Does the Minister feel that that attitude is embodied in the ill-considered note left by the ex-Chief Secretary to the Treasury as he left his old job?

If the last Government, including the right hon. Gentleman, had bothered to spend the time that we are spending getting into the unglamorous parts of Government spending to find out just how much money can be saved, he might not have felt it necessary to leave a note in quite the stark terms that he did, true though it was. The fact is that there is a huge amount of wasteful spending. Sir Philip Green has done a sterling service in picking up some stones and providing the evidence for that, and we will be acting on his recommendations to see how we can take costs out of the overheads of Government. That is the best way to protect front-line services and to protect the jobs of dedicated public servants, which the right hon. Gentleman claims to care about.

Does my right hon. Friend agree that small business has been locked out of the procurement process for far too long? Will he start to give small businesses, particularly those in Yorkshire, a fairer crack of the whip?

A big benefit arising from the changes that we are proposing to make to the way in which services are procured is that they will open the door to smaller businesses. Over-prescriptive procurements make it very expensive for small businesses to take the risk of committing to tendering, and they tend to be excluded on a self-selecting basis. We want to change that. It is our aspiration that 25% of contracts should be let with small and medium-sized enterprises. That is the direction in which we hope to go, and I am sure that my hon. Friend’s constituents in Yorkshire will take full advantage of it.

Will the Minister be able to publish information in future to show that his aspiration to help small business is not just an aspiration but a reality?

One of the stark conclusions of Sir Philip Green’s review was that the quality of Government data is lamentably poor. It is not easy to know exactly what the position is. The right hon. Member for Birmingham, Hodge Hill (Mr Byrne) referred to the lack of centrally held data about contracts with the voluntary and charitable sector; that merely begins to illustrate the problem.

The Minister talks about small and medium-sized enterprises gaining more from Government contracts, but can he indicate what he is doing to ensure that there is a good spread of that throughout all regions of the United Kingdom?

All regions and nations across the United Kingdom should be able to benefit from that aspiration. We are going to expose much more widely the tender documents that are available so that small businesses will find it much easier to take part in these sometimes quite intimidating processes that have excluded many of them in the past. [Interruption.]

Order. I understand that the House is eagerly anticipating later business, but when there is a constant hubbub it is very discourteous and most unfair both on the person wanting to ask the question and on the Minister deputed to answer it.

Non-departmental Public Bodies

3. What recent progress has been made on his Department’s review of non-departmental public bodies. (18050)

13. What recent progress has been made on his Department’s review of non-departmental public bodies. (18060)

Last week I announced the first results of the Government’s review of quangos. This is a work in progress; the principal aim is to increase accountability. We believe that where the state carries out a function it should be accountable to a Minister or to a local council unless one of three rigorous tests is met. To pass, the function must be purely technical, tasked with measuring facts or figures, or plainly required to be politically impartial. We reviewed 901 bodies and intend that nearly 200 will cease to be NDPBs, and we will merge a further 118 and substantially reform a further 171.

Does the Minister agree that the review should include the misuse of public funds by quangos and public sector balance sheet organisations in paying lobbyists to brief against the Government or elected Members in the execution of their mandates?

Guidelines already limit the use of external consultants for those purposes, and we intend to tighten them further, because the public find it quite offensive that a quango should be spending taxpayers’ money on hiring external consultants to lobby the Government to encourage them to spend more taxpayers’ money.

Will the Minister tell the House how many quangos were created by the previous Government and, of those, how many will remain as a result of the changes that he is introducing?

As I said, we will reduce significantly the number of NDPBs. The right hon. Member for Birmingham, Hodge Hill (Mr Byrne) was bragging the other day about how many quangos he was planning to get rid of, but sadly the last Labour Government failed to act on their intentions.

Last week the Minister announced that many quangos would be done away with and their responsibilities transferred to third sector organisations. Will he assure the House and myself that those organisations, such as citizens advice bureaux, will be properly resourced so that they can provide people with specialised advice? Will he dispel the myth that this is being done on the cheap?

The aim of the quango review is not particularly to save costs or money—although it will—but principally to increase accountability. When functions are transferred, such as consumer advocacy functions to CABs, there will be a transfer of resources. The hon. Gentleman will have to wait a little longer to hear the extent of those resources.

Why does the Minister intend to disembowel the Equality and Human Rights Commission? Does he not believe that its responsibility to promote equality on behalf of women and ethnic minorities is important? Why is he reducing it to a purely regulatory body?

Many people felt that that body was not spending taxpayers’ money well. Its function is important and we concluded that it justified the EHRC continuing to exist as an independent body, but given that we are facing a situation in which, as the former Chief Secretary helpfully pointed out, there is no money left, significant savings have to be made. The EHRC will have to play its part in that.

National Citizen Service

In July, the Prime Minister announced the start of the bidding process for providers of national citizen service pilots. We have been really pleased with the response, and in the next few weeks we expect to announce the successful bidders. We expect to provide places for about 10,000 young people, with a good geographical spread.

The national citizen service is a great example of how young people can make a difference in their local communities. What can I do to persuade people in Brentford and Isleworth to get more involved in the project?

I thank my hon. Friend for her interest. As I said, the successful bidders will be announced shortly. They will be responsible for recruiting local young people and communicating the opportunities in their area. If a pilot is run in her area, I urge her to support its provider, as I would urge all MPs to do. The experience of young people in the pilots that have already taken place just down the road from her in Hammersmith has been extremely positive.

In my constituency, some of the richest wards exist side by side with some of the poorest wards in the country. Can the Minister reassure me that children from more disadvantaged backgrounds will also be encouraged to get involved in the national citizen service?

I can certainly give my hon. Friend that assurance, and those children will be more than encouraged. Involving people from all kinds of backgrounds is a central aim of the programme and a key part of its value. As part of the commissioning process, organisations bidding to deliver a pilot next summer have been asked to set out their specific plans to support the broadest range of young people to participate. [Interruption.]

Order. There are still far too many private conversations taking place in the Chamber. I want to hear, and I hope the House wants to hear, Steve Rotheram.

As a former employee of a quango, I am following the Minister’s much-vaunted “bonfire of the quangos”, as he called it. Now that the comprehensive spending review is upon us, can he tell the House what the total savings will be?

Order. Unfortunately, that question suffers from the disadvantage that it bears absolutely no relation to the question on the Order Paper. We must have another go, so I call Stella Creasy.

The tender document for the national citizen service pilot sets out the Government’s refusal to meet the total costs of the programme. Just how much of the bill does the Minister expect the voluntary sector and young people themselves to meet?

The cost of the pilots will be revealed as a result of the spending review. We are committed to two years of pilots to test a range of approaches to delivering the service, which will help us to identify the most cost-effective way forward. We will have a clear idea of the likely costs of a wider roll-out of the national citizen service once we have evaluated the two-year pilot phase.

Social Enterprises

5. What assessment he has made of the likely effect on social enterprises of reductions in Government expenditure. (18052)

Of course, social enterprises will be affected by the spending review. However, as part of our structural reform programme, we are bringing forward huge new opportunities for the social enterprises of this country—indeed, for the voluntary and community sector as a whole—to participate in the delivery of public services.

I am heartened by my right hon. Friend’s response. He may be aware of the current uncertainty surrounding Foxgloves residential home, which provides respite care for families of children with epilepsy and autism. It is working well with the council to find a solution, but other solutions should come from the community. Are there are any plans to bring forward the use of unclaimed assets so that social enterprises can draw on them to provide alternatives, and the parents at Foxgloves can continue to use it and secure its future?

The sort of case that my hon. Friend raises is relevant to our concerns, and we are very focused on that. It is one reason for our introducing the big society bank, which will be partly funded in just the way that he describes, and can, in turn, fund social enterprises and voluntary and community service organisations that require funding in the interim.

According to research by the National Council for Voluntary Organisations, third sector organisations that provide education and training opportunities could be the most imperilled by public spending cuts. What is the Minister doing to ensure that training opportunities in the third sector remain? Has he pressed the Department for Business, Innovation and Skills and the Treasury on that?

I think that the reverse will turn out to be the case, in the sense that the Government are planning a huge and terribly important Work programme, which will focus heavily on not only getting people into jobs, but training them for jobs. We are also greatly enlarging the programme of apprenticeships, and there are various other elements, about which hon. Members will hear in the spending review announcement. Consequently, we anticipate more, not fewer opportunities for voluntary and community organisations to participate in training and employment.

Commissioning and Procurement

6. What recent progress has been made in delivering his Department’s policies on Government commissioning and procurement. (18053)

Commissioning is currently too prescriptive; tender documents can be immensely lengthy, specifying every detail of every step in every process. That stifles innovation, excludes new entrants to the market and adds wholly unnecessary cost. We intend that commissioning should be outcome-based, leaving much more scope for innovative providers from the social enterprise, voluntary, charitable and small business sectors to bid. Whenever possible, commissioning should be based on a payment-by-results model.

On procurement, I refer my hon. Friend to my reply to Question 2. [Interruption.]

Order. Once again, I understand the excitement and anticipation, but the House must come to order. Such conduct makes a bad impression on the electorate, whose support we so recently sought.

I thank my right hon. Friend the Minister for his answer. Following his earlier comments, I seek assurance that small and medium-sized enterprises in my constituency can access Government contracts. Can he give me any examples of practical help now or in future that would make that easier to achieve?

We certainly hope that that will be the case. It is our aspiration that 25% of Government contracts should end up in the small and medium-sized sector. We are committed to publishing online, in an easily accessible form, all Government tender documents. That will make it much easier for small businesses, which can otherwise be put off the process, to take part.

In terms of commissioning and procurement, the public sector procures £13 billion-worth of services from the charitable sector. On Monday, a think-tank suggested that the Government’s statement today will wipe out about £5 billion of that procurement—the whole of the increase that was achieved in the past 10 years. What are the Minister’s intentions for funding the voluntary sector? How does he reconcile cuts in that sector with the Prime Minister’s aspiration for the big society?

We are very aware of concerns in the sector. The Chancellor is very aware of them, and will have something to say about the matter a little later. However, there must be reductions in public spending for the simple reason that the former Chief Secretary set out with such uncharacteristic lucidity in his valedictory note.

Public Services (Third Sector)

9. What recent assessment he has made of the effectiveness of the use of third sector organisations by local authorities in delivering public services. (18056)

As I mentioned in my response to my hon. Friend the Member for Bedford (Richard Fuller), the Government believe that the voluntary and community sector has a huge role to play in providing public services. Indeed, our intention is vastly to enlarge the potential for that to occur.

Newcastle city council has reassured me of its commitment to using the voluntary sector, but what will the Minister do to ensure that the severe cuts to local authority funding do not mean that the big society is just an underfunded big con?

We are extremely conscious of the fact that there may be a gap between when we introduce the new reforms that I described and when the effect of the expenditure cuts is felt. My right hon. Friend the Chancellor will have very much to say on that when he makes his statement, and I would not want to pre-empt what he will say on how we will handle that situation.

Suffolk county council was recently part of the body that commissioned drug and alcohol treatment services in Suffolk. Unfortunately, a very small, excellent charity in my constituency—the Iceni Project—was excluded from that process because of its size. What can the Minister do to ensure that the Iceni Project will be included, and will he agree to meet it and me?

I would of course be delighted to meet my hon. Friend and the charity in question. As we restructure contracts in the way in which my right hon. Friend the Minister for the Cabinet Office mentioned—away from hugely prescriptive tender contracts and into payment by results—I hope we will find that there are huge opportunities for charities such as the small one in my hon. Friend’s constituency to participate and deliver excellent results. We should not have the huge bureaucratic burdens that prevent the smaller voluntary and community organisations from participating.

I am sorry to say that the Minister sounds rather naive. I went to visit Crisis in Sunderland. Three quarters of its money comes from a combination of housing benefit and local government grant. When both those are cut, how can it maintain its services?

I think the hon. Lady is ignoring the extent to which our programme of structural reform will enlarge opportunities for people to participate in services from the voluntary and community sector—[Laughter.] Opposition Members may not believe that, but that is because they did not try to find ways to deliver services on the basis of payment by results, or to find ways that actually work. We know that voluntary and community organisations are capable of that. When they do it, they will find that there is access to a large amount of revenue that is currently denied to them.

Departmental Procurement

10. What steps his Department is taking to share best practice in procurement among Departments. (18057)

Procurement of basic commodities was carried out without any effort to leverage the scale and buying power of the whole Government—[Interruption.]

Order. I understand the excitement, but I hope that that practice, which was discontinued some time ago, will be discontinued in future. The Minister must be heard.

That led to one part of the Government buying basic office supplies at seven and a half times the cost that other parts incurred. Allowing wasteful spending of that type to remain unreformed would mean that front-line services and the jobs of dedicated public servants would be more at risk. We are mandating that all Departments and public bodies should in future buy through supplier contracts negotiated on behalf of the whole of central Government. That will cut the costs of Government overheads by some—[Interruption]

Order—[Interruption.] Order. In so far as we could hear the Minister, I think we have got the drift of it.

I thank the Minister for his reply in as much as I heard it. It is sound commercial practice to maximise buying power by adding together the purchases of all bodies within an organisation and to use that to drive down prices from suppliers, yet Sir Philip Green found waste arising from huge variation in the prices paid by different Departments. What steps will the Minister take to co-ordinate Government procurement in future?

We will be mandating that all of central Government should buy through centrally negotiated contracts. That will save £500 million in the current year alone, and will drive savings running into billions of pounds in the years that lie ahead.

Will the Minister ensure that best practice in sustainable and green procurement is part of his briefing in ensuring best practice in Departments, and does he consider that the abolition of the Sustainable Development Commission will help or hinder him in that process?

We are committed to procuring in a way that is sustainable, but I do not agree with the hon. Gentleman that maintaining a quango is a guaranteed way to achieve that.