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Cabinet Office

Volume 564: debated on Wednesday 19 June 2013

The Minister for the Cabinet Office was asked—

Work Programme

1. What recent discussions he has had with civil society groups on the effect of the Work programme on their organisations. (160374)

I have regular discussions with organisations that deliver the Work programme. I recognise that they operate in a challenging environment, but I salute their collective early success in getting more than 200,000 long-term unemployed people into work, as I am sure does the hon. Lady.

I thank the Minister for that response. A recent report by the Work and Pensions Committee on the Work programme found that many voluntary sector organisations that are listed as sub-contractors do not consider themselves to be involved at all, leading to suspicions that specialist organisations are being used as “bid candy”, rather than to deliver services. What will the Minister do to ensure that such charities are treated fairly?

It is for the Department for Work and Pensions to respond to that report; my role is to ensure that the relevant Minister understands the concerns of the voluntary sector. We should recognise that more than 350 voluntary sector organisations in the supply chain are doing incredibly valuable work to get long-term unemployed people back into work. My other role is to ensure that we learn the lessons from that programme in forthcoming payment-by-results programmes, not least in the transforming rehabilitation and probation programme.

Has my hon. Friend noted the figures from the Department for Work and Pensions that show that voluntary and community based organisations, such as Whitwick Community Enterprises in my constituency, make up the largest proportion of workplace providers under the Work programme at 47%?

My hon. Friend is right that almost 50% of the supply chain is in the voluntary sector. We all know from our experience of such organisations what extraordinarily valuable work they do to get people ready for work and into work. We want to make the programme work.

Surely the Minister knows that New Philanthropy Capital has advised the Government not to repeat the mistakes of the Work programme. What lessons will he learn so that those mistakes are not repeated and so that third sector organisations and charities that want to help unemployed people are encouraged to do so?

I do not necessarily recognise that mistakes have been made. Payment-by-results is a tough and challenging regime, but each exercise will be different and the process will evolve. It is a better regime than paying for failure and mediocrity, which is what the Labour Government did. The next test is the probation reforms. If the hon. Gentleman looks at the detail of what the Ministry of Justice has produced, he will see that lessons have been learned on having more contracts, paying much more attention to how the supply chain is managed and investing in capacity building in the voluntary sector so that it can do more.

Anti-fraud Activities

The National Fraud Authority estimates that the public purse loses more than £20 billion a year to fraud. That figure has been far too high for far too long. Last year, the Departments that engaged with the cross-Government taskforce that I chair saved an estimated £5.9 billion. However, we know that there is much more to do.

I pay tribute to the Minister for the billions of pounds of cross-departmental savings that he has achieved. In targeting that £20 billion, I urge him to look again at the risk-averse legal advice in Whitehall that is stopping data-sharing between the public and private sectors, because fraudsters who commit fraud against the private sector often do so against the public purse.

I am grateful to my hon. Friend for those remarks, for his interest in this area and, more generally, for the brilliant forensic work he does on the Public Accounts Committee to protect the taxpayer’s interest. He is right about the legal advice that is often given in this complex area of law, which is a mishmash of common law and statutory provisions. There are many opportunities to share data, which would protect privacy but promote the public interest by saving money. We need to look at that area and have a rather more open approach.

Will the Minister also consider the proposal to establish a register of private sector companies in receipt of public sector contracts that have been involved in fraud?

I will certainly consider that. We need to get much better at sharing information about fraud and attempted fraud both within the private sector and between the public and private sectors. That has been done far too little, but we are getting better at it. There is still much to do and I am grateful for the right hon. Gentleman’s thoughts.

Public Sector Contracts

It is Government policy to dismantle the barriers facing small companies, charities and voluntary organisations to ensure they can compete for contracts on a level playing field. We have taken a number of significant steps specifically to support charities and social enterprises to bid for and win public sector contracts, such as the implementation of the Public Services (Social Value) Act 2012, a community right to challenge, and reforms of procurement processes that make them more open and fair to charities.

The Foundation for Social Improvement today reports:

“Looking to the future of the commissioning process, it is clear that the current situation is not sustainable. Only around one quarter of respondents indicated that they felt they could carry on bidding for—and carrying out—local authority contracts over the next 5 years.”

Is it true that the Government’s plan to break open public services is merely benefiting a handful of large companies that use charities as “bid candy”, as my hon. Friend the Member for Ayr, Carrick and Cumnock (Sandra Osborne) said, and as the report concludes?

As the Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for Ruislip, Northwood and Pinner (Mr Hurd) made clear in an earlier answer, many charitable organisations are already taking part and there are opportunities for more. What I take from the hon. Gentleman’s question is his willingness to work with me and others who care about making procurement better throughout the whole public sector, and encouraging local authorities to do their bit alongside the reforms we have achieved in central Government.

I applaud the Government’s steps to encourage charities to win public sector contracts, but does my hon. Friend believe there is a threshold to the proportion of income that charities receive from the public sector, above which they stop becoming charities because they are merely agencies of the state?

My hon. Friend makes an interesting point, and it may be just as much the responsibility of trustees of an organisation to look at such issues within that organisation. The Government welcome the diversity of the sector and the opening up of Government procurement to those who can do the job well for value for money.

The Justice Secretary is a man who appears to be in something of a hurry. The Minister may be aware of growing concern among small voluntary organisations that provide services to ex-offenders that under the Justice Secretary’s plans their work will be undermined as large contracts are given to a small number of private providers. What reassurance can be given to those important small charities?

The right hon. Gentleman may wish to direct that question to the Justice Secretary himself, but the Parliamentary Secretary has had many discussions with Members across Government about opportunities for the voluntary sector, and we are passionate about getting that right.

In strongly applauding my hon. Friend’s work in this area, may I suggest that it needs to go beyond the procurement process itself? The other danger is public sector bodies—both locally and centrally—taking on employees to do work that could be done more effectively by voluntary sector organisations.

My hon. Friend makes a good point about the value for money that the state would seek to achieve at all levels. Alongside that, our reforms include measures to build the capability of the third sector, which I am sure we would all want to see strongly succeed.

Is it clear that not only have the Government failed to deliver more public sector contracts to charities, but after three years in office the big society project has now become a shrivelled society, except in one area—charitable activity and supporting people whom the hon. Lady’s Government have driven into poverty? More than 13 million people are now in poverty, two thirds of whom are in work.

I thought the hon. Gentleman would welcome the notion that more charities are getting involved and more people are volunteering. Surely that is a good thing.

It is a sad thing. In the past year, the number of people dependent on food banks tripled to almost 350,000, of whom—listen to this figure—126,889 are children. There is no doubt that the Minister is a decent human being, but did she really come into politics to increase the scale of the third sector on the back of a disgraceful rise in the number of children in poverty? Is she ashamed of that record?

What I am ashamed of is the hon. Gentleman’s attempt to turn an important issue into a political football. Like many others in the House, I have stood alongside excellent volunteers at food banks in my constituency. I applaud their efforts, their goodheartedness and their contribution, but I do not applaud his blindness to the notion that the use of food banks in fact soared under the previous Labour Government.

National Citizen Service

The National Citizen Service is a fantastic opportunity for our young constituents to make a difference in the community and to develop really valuable skills. Demand is growing rapidly, so we are making 50,000 places available this year and 90,000 in 2014.

I frequently meet with the Challenge Network, which is the principal provider of the NCS in Pendle, and I am looking forward to taking part in a “Dragons’ Den” exercise with it later this year. Will my hon. Friend say what the outcomes are for young people who have so far taken part in the NCS programme?

I thank my hon. Friend for his positive engagement with the programme. As he would expect, we commissioned independent research on its impact, and it tells us that so far we are getting £2 of value for every £1 of public money we spend. The most significant impact has been on what might be called work-ready skills: in particular, helping young people to develop confidence and teamwork, leadership and communication skills, all of which are very important in the workplace.

Youth work budgets have been slashed throughout the country, but the amount the Government are spending on a six-week programme for 16-year-olds would fund a 52-week-a-year service for 13 to 19-year-olds. Will the Minister rethink the NCS and instead put the money into a year-round youth service?

I think the hon. Lady should speak to her Front-Bench team, who recently said they were not against the NCS. I think they saw the numbers on the very positive impact it has on young people, and I hope she will support that too. Youth services around the country do not have to be cut. There are lots of other options for local authorities—to mutualise, to look at other delivery models—and we stand ready to support them in that.


To date, the number of public bodies has been reduced by more than 240, through abolitions and mergers, and by the end of the spending review period in March 2015, the Government will have reduced their total number by a third.

I congratulate my hon. Friend on what he has managed to achieve so far, but how will he ensure that we never see the explosion in the number of these unaccountable bodies that we saw under the last Government?

That is absolutely the right question, and part of the answer is that in the future any new proposal for creating a public body will have to get the approval of the Minister for the Cabinet Office, and I think I can reliably inform the House that the answer would likely be no. Furthermore, in the future, every public body will be subject to triennial reviews set up to justify their continued existence. It is about changing the culture that we inherited from the last Government.

One set of so-called quangos that was immediately abolished were the very accountable regional development agencies, and since then regional assistance has noticeably been a pale shadow of what it was. What steps is the Cabinet Office taking to audit the effectiveness with which the subsequent bodies—the regional growth fund, the local enterprise partnerships—are delivering regeneration to areas that desperately need it, such as mine in north Staffordshire?

I am puzzled by the hon. Gentleman’s question, particularly in relation to exactly whom the RDAs were accountable to. I do not think that anyone is weeping for their absence, and I think that he should give LEPs a chance. My impression is that they are doing increasingly valuable work. We have new city deals and a whole new era of localism, with more and more decisions being taken locally and accountable to the communities they serve. I hope he will welcome that.

Co-operatives and Mutuals

The Government are committed to supporting public service mutuals in providing public services. We know that mutuals can bring significant efficiencies that benefit not only public service users and the taxpayer, but the staff who form them. Our mutuals support programme is tracking more than 120 emerging and established public service mutuals across 13 different sectors.

Does my right hon. Friend share my view that, in line with the original Rochdale principles, co-operatives should be politically neutral and not make contributions to political parties?

I hear what my hon. Friend, who is extremely knowledgeable on this topic, says. He is a passionate supporter of mutuals and co-operatives, and his point deserves further scrutiny and study.

The Minister talks about supporting mutuals. What is he doing actively to encourage them to apply for public services, especially at year-end, when they do not give large bonuses to executive and non-executive directors?

I do not entirely see the connection between those two phenomena. We actively encourage groups of public sector workers to come together to form new entities that continue to deliver public services, but on a contractual basis, not a line-managed, bureaucratic basis. I am delighted to tell the hon. Gentleman that there is a lot of interest in the public sector. Many entrepreneurial leaders are looking for the opportunity to lead the service in an innovative and less-restricted way.

Does my right hon. Friend agree that the current difficulties at the Co-operative bank should in no way deflect the Government from the coalition agreement to promote greater corporate diversity in Britain?

I can reassure my hon. Friend that those difficulties have in no way deflected us from that commitment. Indeed, there is a growing interest in the public sector in the process of mutualising, which can take many forms and is to be encouraged.

On the Government’s support of co-operatives and mutuals, what discussions have taken place with colleagues in the Department of Energy and Climate Change on support for co-operative and mutual energy in the Energy Bill?

Permanent Secretaries

7. What plans he has to reform the procedure for the appointment of permanent secretaries of Government Departments. (160380)

The Government wish to strengthen the role of Ministers in permanent secretary appointments to reflect Ministers’ accountability to Parliament for the performance of their Departments. We believe it sensible to allow a choice of candidates who are judged by the Civil Service Commission to be above the line and appointable. The Civil Service Commission’s recent guidance is capable of strengthening the Minister’s role. We will review how it works before deciding whether to seek further changes.

Does the Minister agree with the two recent excellent reports from the Institute of Government and the Institute for Public Policy Research, which say that for there to be proper accountability Secretaries of State must have a say in who runs their Department, albeit from a shortlist agreed in the normal way? Will he reassure us that, contrary to press reports, he is not caving in to the mandarins on this vital reform?

I do not think that that is a phenomenon that would be recognised in Whitehall. The right hon. Gentleman makes a powerful point. The relationship between permanent secretary and Minister is very important. Ministers are accountable in this place for their Department, and it seems to us to make sense—it clearly makes sense to him, too—that a Minister should be given a choice of candidates, as long as they are deemed to be politically impartial and capable of doing the job properly.

I commend my right hon. Friend for encouraging a lively debate on the leadership of the senior civil service, not least because senior appointments have led to a great deal of churn and discontinuity at the top of Government Departments in recent years. May I also congratulate him on publishing the IPPR report? We look forward to him coming before the Public Administration Committee to discuss it.

I look forward to one of my regular attendances at my hon. Friend’s Committee with barely concealed impatience. I am grateful for the interest he and his Committee take in this important area. I would like to take the opportunity, while answering this question, to pay tribute to so many hard working civil servants who do a fantastic job, and to the support that so many of them have given to the programme of reform we have set in train.

Topical Questions

My departmental responsibilities include responsibility for public service efficiency and reform groups, civil service issues, industrial relations strategy in the public sector, transparency, civil contingencies, civil society and cyber-security.

What steps will my right hon. Friend take to accelerate the pace of efficiency savings in Whitehall, and what further action will he take to slice out the accumulated waste of the previous Government?

I was able to announce a couple of weeks ago that in the last financial year, 2012-13, we made over £10 billion of efficiency savings. It is a pity that it has taken so long to get on with this. If the present Leader of the Opposition had started on the process when he was in my position, the country’s public finances would now be in a much better state.

The single biggest source of new social finance for charities and social enterprises would be a UK community investment Act that required banks to lend into areas that they are not currently lending into. Why are the Government blocking such reforms?

I think that is the first Labour policy announcement I have heard in three years. In answer to the hon. Gentleman’s question, this country is the acknowledged world leader in developing a new source of finance for social organisations. It is called social investment, and it was the subject of a special meeting of the G8 this week, at which everyone stood up and said that Britain was recognised as a world leader in this regard, not least because of our creation of big society capital, which has £600 million on its balance sheet, to make it easier for charities and social enterprises to access capital.

T2. Too often, Government Departments exist in their own silos and fail to share services and skills. What steps is the Minister taking to address that and to ensure that that silo mentality stops? (160390)

Way back in 2004, Sir Peter Gershon recommended the introduction of shared services to try to break down that silo mentality and to make efficiency savings. For eight years very little happened, but we are now breaking through and making big progress on legal services, on internal audit and on back-office, transactional, human resources and finance services. There is much more to do, however, and I am grateful to my hon. Friend for his support.

T6. Bolton community and volunteer services have congratulated Bolton council on preserving funding for the voluntary sector, but projects are still at risk owing to rising costs, increasing demand and reduced access to funding. What will the Minister do to save community and voluntary sector projects in Bolton West? (160394)

The hon. Lady should direct her first inquiries to the council, because not all councils are cutting funding to the voluntary sector. She should be aware of the broad national picture, in which volunteering is up, giving is stable and social investment is rising. There is a whole range of Government programmes to support and strengthen civil society and help it to maintain its resilience through this very difficult period.

T3. In 2010, the Smith report suggested that substantial cost savings would result from moving parts of the civil service from London to the regions. It suggested a target of moving 15,000 civil servants by 2015. Will the Minister update us on progress? (160391)

By last year, there were already nearly 12,000 fewer civil servants based in London. Our priority is to exit excess space and we have now exited 1.6 million square feet of office space, but there is much more that we can and will do.

T7. In 2010, cybercrime cost the Welsh economy £974 million. What steps are the Government taking to protect online shoppers and the small and medium-sized businesses that tend to trade online? (160395)

Repeated reports show that the best protection that can be given to individuals, households and businesses is basic online hygiene and safety. We have increased spending on cyber-security at a time of great financial stringency, and we are generally regarded as being well placed in the international rankings on cyber-security, but there is absolutely no room for complacency.

T4. Keighley town council is currently running a £160,000 deficit and has a liability of £1 million. Is my right hon. Friend aware that there is no accountable body for town councils and therefore no one to protect taxpayers’ money? Will he look at this issue as a matter of urgency? (160392)

I am sure that my right hon. Friend the Secretary of State for Communities and Local Government will have taken note of the concern that my hon. Friend raises, but I have always thought that town councils were meant to be accountable to the residents of the town.

T9. Given recent criticism by various organisations of the accuracy of Government statistics, will the Minister advise the House on what steps he is taking to promote trust in Government statistics in future? (160397)

We have appointed as chair of the UK Statistics Authority a very distinguished figure, now Sir Andrew Dilnot, who exercises his task with great rigour, which we welcome.