House again in Committee on Clause 20.
106: Clause 20, page 9, line 25, at end insert—
“( ) The Board shall charge for any services provided under this section and the charge for any service shall be not less than the full cost of delivering the service.”
The noble Baroness said: The amendment is a probing amendment. Under Clause 20, the board can provide various statistical services to anyone, anywhere. I am not sure that this should be in any way a priority for the new board, but we have no objection to it. Amendment No. 106 would add a new subsection to Clause 20 and require the board to charge for services provided on a full-cost basis.
The Explanatory Notes state that the ONS provides statistical services to developing countries. I am sure that that is laudable, but I hope that any such service would be funded out of the budget of the Department for International Development and not that of the Statistics Board. As far as I can see, the board has no function that would authorise it to absorb such expenditure.
By tabling the amendment, I am seeking to find out how the charging arrangements are intended to work. I hope that the Minister will assure the Committee that the board will not use its resources for purposes other than the functions set out in the Bill or that, if it does, it will recover its full costs. I beg to move.
The services that the ONS currently provides—that is, providing information and advice and undertaking surveys—are those that we envisage the board undertaking. The services will be discretionary; there is no obligation to provide them. Any charging is permitted by Clause 24 as expedient in connection with the exercise of the board’s functions.
There is no need for an express charging power or a duty to charge for any services being provided. As with any government department, the board will be subject to cross-government rules and guidelines on what it may charge for services. These rules are designed to ensure that government departments and public bodies charge appropriately. For example, as with any government department, the board will be subject to the Freedom of Information Act, competition law and the Re-use of Public Sector Information Regulations so far as selling information for commercial re-use is concerned. The board will be subject also to a range of cross-governmental administrative rules that set out when it would be able to charge.
The problem with the amendment is that the board would lose this flexibility. The amendment is unnecessary, as the board will be covered by the wider detailed framework on charging for services that applies to all government departments.
The noble Baroness may be right that services may be provided to third-world countries on the basis of funding from the Department for International Development, but it is not for us to specify such arrangements in the Bill. The board will fit into the pattern of all public bodies and be subject to the same rules governing the basis on which it may charge. It has the right to do so; none of its functions is obligatory. I hope that the noble Baroness will therefore recognise that we have taken into account the concerns that she expressed and have addressed them in the Bill.
Only within the framework of the government rules and regulations that cover departments. It is the same as for any public body in those terms. Departments have different relationships with the client groups and bodies with which they are concerned. The board is no different from any other in that respect.
The rules set out certain areas where charges are obligatory for what the Government provide. However, there are elements of discretion within the framework. The noble Baroness will recognise that there might be a body to which the board relates where it was deemed part of public policy that no charging be effected. That would be against a general background of charging in the same way as other public bodies, however.
I regard the Minister’s response as somewhat unsatisfactory. We are told that the board is to be independent, yet I cannot get a clear answer as to whether it is to follow government policy elsewhere on providing services at full cost or otherwise. The Minister has not really answered the question of whether it should be charging for all services. The issue is not that it is not right sometimes for government to subsidise services, but whether the Statistics Board should be using its clear financial envelope—set out in this five-year settlement that we keep being told about—for the statistical functions in the Bill. I seek to ascertain to what extent the board may, should or could divert its resources elsewhere. Can the Minister clarify that further?
The noble Baroness is quite right that the board has a five-year settlement. She will also recognise that there may be opportunities for additional receipts from its charging for services commissioned from it, and that those are additional resources.
I confess to the noble Baroness that I stumbled a little on her question about pro bono, which is a particular concept. I will write to her on that point, but I am glad that she has drawn attention to the board’s five-year settlement on its own resources. She will also recognise that, like the ONS, the board will have the capacity to charge and increase its resources where appropriate.
I thank the Minister for offering to write, and welcome that. He will be aware that I was not so much worried about the Statistics Board increasing the resources that might otherwise be available for its proper purposes as about those resources being diminished. I hope that he will take that into account when he writes to me. I look forward to that letter, and beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 20 agreed to.
Clause 21 [Statistical research]:
[Amendment No. 107 not moved.]
Clause 21 agreed to.
Clause 22 [Delegated functions]:
[Amendments Nos. 108 to 110 not moved.]
Clause 22 agreed to.
Clause 23 [Census etc]:
[Amendment No. 111 not moved.]
Clause 23 agreed to.
[Amendment No. 112 not moved.]
Schedule 1 agreed to.
113: Before Clause 24, insert the following new Clause—
“Access to the Prime Minister
The National Statistician shall have right of direct access to the Prime Minister on any matter involving the integrity of official statistics or a dispute with a government department regarding official statistics.”
The noble Baroness said: Amendment No. 113 would insert a new clause before Clause 24. This new clause would give the National Statistician a,
“right of direct access to the Prime Minister on any matter involving the integrity of official statistics or a dispute with a government department regarding official statistics”.
When the noble Lord, Lord Moser, who is not in his place this evening, was our statistician, he valued his direct access to the Prime Minister; he has spoken about that several times in your Lordships’ House, including on our first day in Committee. It enabled him to sort out difficult issues with government departments without any publicity or undue fuss.
The Cabinet Office has now been accepted by the Committee as the lead department for the Statistics Board, but that does not of itself guarantee access for the National Statistician to the Prime Minister. In another place, Mr John Healey, the Financial Secretary, said that the National Statistician would have access to the Prime Minister through the Cabinet Secretary; that is, she would have to negotiate a gatekeeper first. We do not think that that gives sufficient prominence to the independent role of the National Statistician, which is why we have tabled this amendment.
The amendment is tabled as a new clause before Clause 24. I was not particularly keen to table a new clause that sat under the heading before Clauses 28 and 29 of “Organisation and administration”, although that would be the other natural home for this clause. The other amendment in this group, tabled in the names of other noble Lords, is to Clause 28, which is entitled “advisory functions”. I do not think that we are talking about an advisory function. The National Statistician is not in this instance advising the Prime Minister, though that may also be involved; rather, she is seeking the support of the Prime Minister in her endeavours in relation to statistics.
I am sure that the Minister will seek to reassure the Committee that the National Statistician need have no fear about his or her access to the Prime Minister where necessary. But we fear for the access of the National Statistician. I beg to move.
It does not matter to us whereabouts the sentiments behind the amendments in this group might find their place in the Bill. As the noble Baroness, Lady Noakes, said, the Government envisage that the chief statistician will, in order to meet the Prime Minister, have to negotiate with a Cabinet Secretary who might just say, “No, I’m terribly sorry, but he’s going to be busy for the next few weeks or months”. That is not adequate. It does not reflect the situation that obtained when the noble Lord, Lord Moser, was chief statistician and it does not reflect the importance of the chief statistician, particularly in the circumstances set out by these amendments.
I, too, regret that the noble Lord, Lord Moser, is not here to argue this case with even greater force than the noble Baroness, Lady Noakes, and the noble Lord, Lord Newby, have just done. The National Statistician has a right of access to the Prime Minister through the head of the Civil Service under the terms of the framework for national statistics, and we intend that this right will continue.
We have already argued these points during the Bill’s progress in this House and the other place. The role and status of the National Statistician is strong in this Bill. The nearest comparators are the Government’s Chief Medical Officer and Chief Scientific Adviser. While neither of those is a statutory appointment, and while both are leaders of their respective professions in government, they have no statutory right of access to the Prime Minister, nor are there requirements on the Government to follow their advice or to give reasons if they do not do so.
The bedrock of this system is transparency and accountability to Parliament. The board and the National Statistician are required to act openly, which includes publishing the results of assessments against the code. They publish any advice or concerns about statistics across government. Open discourse is the best assurance of the role of the National Statistician, but we intend that she shall continue to enjoy the right of access to the Prime Minister if so required.
The Minister is contradicting what his honourable friend the Financial Secretary said in another place. Can he confirm that the National Statistician does not have to negotiate access via the Cabinet Secretary and that this is a direct right? Can he clarify that for the record?
I do not have a note on that point, but I am indicating that the current National Statistician does not go through the Cabinet Office. For obvious reasons, I understand the importance of the amendment that was carried in Committee the other day, but I do not think that that affects the right of the National Statistician and the significance of his role. If an issue exercises him to the extent that he feels that the Prime Minister has to be approached directly, that right exists.
I do not want there to be any lack of clarity. The amendment has nothing to do with the amendments that we moved successfully last week, which replaced “Treasury” with “Cabinet Office” on the residual functions that reside with the Government. This is a question of whether the National Statistician gains access to the Prime Minister through the Cabinet Secretary or goes directly to the Prime Minister. It is a matter of extreme importance because, had Mr Healey not said that he had to go through the Cabinet Secretary, I suspect that there would not have been such concern about the arrangements intended to operate for the National Statistician under the Bill. I should be grateful for the Minister’s clarification.
I understand that the right to access is through the Cabinet Secretary as head of the Civil Service. That is the basis on which the National Statistician has operated and we do not seek to change that process. I reassure the noble Baroness that, whatever is contended as having been said elsewhere, we are sustaining the arrangements that have obtained for the National Statistician through the years for right of access to the Prime Minister through the Cabinet Secretary. That is how it works.
I, too, have discussed the matter with the noble Lord, Lord Moser, and I do not believe that he ever had to go through the Cabinet Secretary. He had direct access to the Prime Minister. It is a pity that the noble Lord is not here to make that point to the Minister, but that was the position as he outlined it to me and to others who have met him and discussed these issues.
I do not think that the Minister is right in saying that access has always been through the Cabinet Secretary. It may have been since 2000, when the new framework was established; if so, that is a pity. However, we are looking to see the full practice reinstated with the right of direct access. One can understand that a strong Cabinet Secretary, approached by a Permanent Secretary when he knows what will be criticised directly to the Prime Minister, can make it extremely difficult for the National Statistician to see the Prime Minister, unless the National Statistician has the statutory right of direct access.
I hear what the noble Lord says. Of course it would have helped to have the benefit of a contribution from the noble Lord, Lord Moser, but I am reflecting what the present National Statistician enjoys. I am aware that the noble Lord, Lord Moser, goes a long way back in terms of his service to government and it may well be that he had a somewhat different arrangement. It certainly was not a statutory right, but that is what the amendment seeks to achieve. I was reflecting what I understood to be the National Statistician’s rights of access. It may well be that the noble Lord, Lord Moser—such is his reputation and the recognition of his significant role—enjoyed privileges that might not be vouchsafed to everyone. But we are discussing legislation here and I was faithfully reflecting the legislative position that governs the National Statistician.
I am grateful to my noble friend Lord Jenkin for reflecting the conversations that he has had with the noble Lord, Lord Moser. They seem to be almost the same as the conversations that I have had with the noble Lord. He served three Prime Ministers, so there was not an isolated instance or a case of having a special relationship with one Prime Minister.
The noble Lord, Lord Moser, has been quite clear to me, to others and to the House about the value that he placed on direct access in order to get difficult things to happen, often involving other departments that were, for one reason or another, not observing best practice. The Minister will be aware that the most important influences are often those behind the scenes, and this was a way of ensuring that the National Statistician could operate through the Prime Minister behind the scenes.
The Minister’s response, which echoed that given in another place, is extremely disappointing and does not line up with the position that the noble Lord, Lord Moser, wants to see and which we support. However, I will not press the matter this evening. I hope that the Minister can go back and reflect on the matter with his colleagues, because, like the noble Lord, Lord Moser, we place a great deal of emphasis on it. On Report, I hope that we can make some more positive progress on the issue. In the mean time, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 24 [Ancillary powers]:
On Question, Whether Clause 24 shall stand part of the Bill?
The Minister will, I hope, be relieved to hear that my purpose in initiating a clause stand part debate is probing in character. As I implied with my earlier amendment, my motivation stems from my concern about the extent to which the Government envisage that the board should, or should not, become a conduit for the wider dissemination of raw data, rather than statistics, throughout Whitehall and conceivably beyond.
The Minister sought earlier to offer me some reassurance on the point by referring to Clause 44(9). However, I am not convinced that that provision affords me all that much comfort. Clause 24(1) states:
“The Board may do anything which it thinks necessary or expedient”.
Its potential scope therefore, in so far as it is not confined to “statistical” function, is extremely wide. I acknowledge that up to a point it may be constrained by virtue of the reference to “ancillary” powers, but, by the same token, there is no indication in the Bill as to what these may be. Accordingly, it is mildly tempting to suppose that the clause offers an open invitation to function creep.
It may well be that I am being unnecessarily obtuse. Nevertheless, it would be helpful to know whether the Government’s intention is that the power granted is to be limited to “statistical” function alone or whether it is intended to go wider. If it is the latter, it would be helpful to know the sort of circumstances in which the Government envisage the power being exercised. Indeed, I should be grateful if he could provide some practical examples.
As the noble Earl said, this is a probing Motion. The purpose of a clause of this nature is to give the board the necessary powers to transact its day-to-day business. It does not widen the scope of the board’s activities, nor does it provide any powers of compulsion. If it helps noble Lords, I will list some of the things that we expect the board may do under the power—enter agreements, acquire and dispose of property and promote or assist the promotion of publicity about the work of the board. These powers will also entitle the board to charge for certain services on a discretionary basis as ONS currently does; for example, for paper copies of its publications, for any statistical services it provides and for services promoting statistical research.
The inclusion of such a clause is fairly standard when creating independent statutory organisations such as a board. Such provision is included in, for example, the Utilities Act 2000, giving the offices of gas and electricity these powers. The clause in no way widens the scope of the board; it is there because it is necessary; and there is no interpretation of it other than it is a fairly standard clause that is found in many government Bills.
Before my noble friend decides what to do with his Motion, will the Minister explain a little more about Clause 24(2)? It states:
“Anything required to be published by the Board may be published by it in such manner as it thinks fit”.
Are there any restrictions on the board’s power under subsection (2)? For example, would it have to provide items in other languages—say, in Welsh? Could it get away with publishing everything on the internet? Are there any restrictions on this extremely wide power? I am puzzled by the breadth of the power.
I shall say two things. First, I will go back to the point that this is a non-executive board composed of people with experience in other fields, who have a certain independence and who are not in the business of doing anything other than what the Government intend the board should do. Secondly, all the board’s functions are statistical; anything it does must be in line with that basic premise. There is little for the noble Baroness to worry about.
116: Clause 25, page 10, line 25, at end insert—
“( ) The report under subsection (1) shall include an appraisal of the discharge of the Board’s duties under section 26.”
The noble Lord said: As it stands, Clause 25 ensures that the Statistics Board will report annually to Parliament and to the devolved administrations. The amendment seeks to add to what is included in that report. Clause 26 requires the board to act efficiently and not incur unnecessary costs or burdens, or impose them on others. This is an important clause. Its effectiveness will be considerably enhanced by making the board examine its own efficiency and cost-effectiveness, and include that appraisal in its annual report. The requirement to report on how burdens on others are being kept to a minimum will encourage the board to think twice before imposing unnecessary demands on other organisations and individuals. I beg to move.
Clause 26 obliges the board to have regard to efficiency and cost-effectiveness when deciding on the exercise of its functions, and to limit the costs that individuals, businesses and other organisations bear as a result of its activities; for example, when requiring them to fill in a survey. ONS has a long history of working to minimise the survey burden on respondents. It is right that this valuable work continues and that the board builds on this in assessing the burden that it places on others for the necessary supply of information.
I do not think that it is necessary to have an explicit requirement that the board should report on this one particular aspect of its functions. After all, the board has a wide range of functions and its job is to present a report to Parliament on how it fulfils its obligations. If it was clear that the board was failing in the respect to which the noble Lord draws attention, there is no doubt that that report would be subject to criticism.
We have got the board properly accountable for its work. It has a range of functions; it would be invidious to single out one function on which we laid legislative emphasis. I hope that the noble Lord will recognise that we also have precedent in how the ONS goes about its work. The board will inherit some working practices germane to its operations which have stood the statistical service in good stead.
I thank the Minister. The board has not a function but a duty. There cannot be much wrong with asking the board to report on its efficiency at the same time as the many other things that it is obliged to report on. If the board does this at least how it is getting on, what it is doing and how it is managing its business will be able to be examined. In the mean time, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
117: Clause 25, page 10, line 25, at end insert—
“( ) The report under subsection (1) shall include a report on the work of the committee established under section 32(2A).”
The noble Baroness said: I shall speak also to Amendment No. 169. Amendment No. 117 amends Clause 25 so that the board's annual report must include the work of the committee established under proposed new Clause 32(2A). Amendment No. 169 introduces new Clause 32(2A), requiring a committee to be set up to review the board’s internal financial controls and whether they secure the proper conduct of the board’s financial affairs. Proposed new subsection (2B) ensures that the committee comprises only non-executive members of the board.
In common parlance, the amendments require an audit committee. The drafting is based on that for the Pension Protection Fund set up under the Pensions Act 2004—a fairly recent precedent but there are others, such as the Bank of England Act 1998. It is now commonplace that organisations have an audit committee comprising non-executive members. The idea has been largely developed in the private sector, but is widely used in the public sector. There cannot be a rational argument for the Statistics Board not having an audit committee responsible for overseeing the internal financial control of the board.
I hope that the Minister will not say that not all ministerial departments need audit committees or that they should exist on a statutory basis as an adjunct to the role of the accounting officer, because that calls into question why the non-ministerial government department model has been used if the laws of corporate structures, otherwise lauded in describing the structures of the Statistics Board, are to be bypassed. I beg to move.
As we have heard, Amendment No. 169 would require the board to establish a committee consisting of non-executive members of the board, to keep under review whether the board’s internal financial controls secure the proper conduct of its financial affairs. Amendment No. 117 would ensure that the board’s annual report included a report of the work of the committee.
The Government believe that corporate governance is of fundamental importance. Good corporate governance includes embedding effective risk management at all levels of the management of government organisations, increasing the need for explicit assurance about risk, control and governance in organisations. As the noble Baroness knows, the work of audit committees is a key part of that.
To promote good practice across government, the Treasury publishes Corporate Governance in Central Government Departments: Code of Good Practice. The code contains as one of its basic principles that,
“the board should ensure that effective arrangements are in place to provide assurance on risk management, governance and internal control. In this respect, the board should be independently advised by an audit committee chaired by an independent non-executive member”.
The corporate governance code also sets out that audit committees should be established by and function in accordance with the Audit Committee Handbook, another Treasury publication.
Clause 32 empowers the board to establish committees to exercise its functions, give it advice, and support it in transacting its business. However, rightly, it does not specify the names and functions of specific committees that must be established. The Government fully expect that the board will use that power to establish an independent and objective audit committee, chaired by an independent non-executive member, as set out in the code on corporate governance and following the guidance set out in the Audit Committee Handbook.
In addition, the Government expect Parliament to play the central role in holding the statistical system to account. There will be full accountability to Parliament as much for this aspect of the board’s work as for others. For example, in the extremely unlikely event that the board failed to establish an audit committee, I have no doubt that that would be a matter of fundamental concern to Parliament and it would call the board to account for that failure.
In those circumstances, we do not think it necessary to legislate for an audit committee. It is for the independent board to determine how it sets up its committees, including the details of their membership, and it is not appropriate to stipulate so much detail in the Bill. The board will be expected to follow best practice guidance, but it would not be appropriate to put that in legislation.
As I have said in previous debates, we do not think it necessary to stipulate the contents of the board’s annual report. Clause 25 already requires the board’s annual report to cover what it has done and what it has found each year, and within that remit, we think we should allow the board to use its own judgment, following good practice guidance, to ensure that the most pertinent information about its activities are reported each year. I hope my explanation is satisfactory to the noble Baroness.
I am concerned about many points in this Bill and I shall seek assurances on many aspects. I am grateful for the Minister's comprehensive reply, which I shall consider carefully alongside his last comment. I am mystified why some Ministers, including Treasury Ministers, stand at the Dispatch Box saying, “We have to legislate for this”, and on other occasions they say, “Of course, we have to let the board do it”. The Minister might accept that that is inconsistent government. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
118: Clause 25, page 10, line 27, at beginning insert “both Houses of”
The noble Lord said: I shall speak also to Amendment No. 119. The Bill as drafted does not require the annual report to be laid before both Houses of Parliament. The amendment ensures that that will happen, giving both Houses the opportunity to debate and to scrutinise the work of the Statistics Board. It would be unwise to disregard the enormous experience and knowledge of this House when scrutinising the annual report. I cannot believe that that is the intention of the Government. I hope that the Minister will accept the amendment. I beg to move.
These amendments relate to the board's duties to prepare reports. The reports under Clause 25 are reports primarily to Parliament and, where relevant, the devolved legislatures, although of course the reports published under this clause will also be published and made widely available. The reports are particularly important given Parliament’s central accountability role, and should be one of the main mechanisms by which Parliament might hold the statistical system to account.
The annual report under Clause 25 should include the board’s forward work plans, including that of the executive office of the National Statistician and—as with the annual reports produced by all departments—the board’s audited annual accounts. Although we strongly hope that Parliament will play an active scrutiny role throughout the year, and not just once a year at the point of the publication of the board’s annual report, the annual reporting system will help Parliament to assess whether the board is effectively and efficiently discharging its duties.
Reports under Clause 25 will allow the board to inform Parliament about: the advice and guidance it has provided to others, including Ministers of the Crown and Ministers in the devolved Administrations, under other duties and powers it has in the Bill; the response it has received from those to whom it has provided that advice; and its views on the adequacy of the response where appropriate.
Amendments Nos. 118 and 119 would put an explicit requirement on the board to lay its reports before both Houses of Parliament. This is unnecessary. Section 1(1) of the Laying of Documents before Parliament (Interpretation) Act 1948 already provides that a reference in any Act to the laying of any instrument, report, account or other document before Parliament is to be construed as a reference to the laying of the document before each House of Parliament, unless the contrary intention is stipulated. The reference to Parliament in Clause 26 therefore will ensure that reports will be laid before each House, without the need for further elaboration. I hope that the noble Lord is reassured by that answer.
120: Clause 25, page 10, line 39, leave out “as soon as possible thereafter” and insert “concurrently”
The noble Lord said: This is a relatively minor amendment but I think it would improve the wording and, possibly, the practice. The board, as we have been hearing, has to lay reports from time to time to this Parliament and to the other Parliaments and Assemblies in the UK. The amendment says that reports should be published,
“as soon as possible thereafter”.
Given that we have the internet, there seems no reason why it should not be published, literally, at the same time. Therefore, “concurrently” would be more helpful than the more ambiguous,
“as soon as possible thereafter”.
I beg to move.
As we have heard, Amendment No. 120 would require any report produced under Clause 25 to be published at the same time as it is laid before Parliament. Those reports are particularly important given Parliament’s central accountability role and should be one of the main mechanisms by which Parliament holds the statistical system to account. As I said in reference to the last amendment, the reports are primarily to Parliament and, where relevant, the devolved legislatures—although they will be published and made widely available.
We envisage that, in most cases, the laying of a report before Parliament and its publication will happen almost simultaneously. The Bill provides for publication as soon as possible after laying the report before Parliament. However, the procedure set out under this clause, under which the reports are available first to Parliament and then more widely, is the correct one. I am sure that noble Lords will agree that that is proper. With this explanation, I hope that the noble Lord will not press the amendment.
I am very grateful to the Minister for that reply. He was doing all right until he suggested that Parliament should have a period of grace. I thought he was going to say that there was no real difference between the Bill and my proposal, which would have been easy to accept. I will read again what he has said but, in the mean time, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 25 agreed to.
Clause 26 [Efficiency etc]:
[Amendments Nos. 121 to 124 not moved.]
Clause 26 agreed to.
124A: After Clause 26, insert the following new Clause—
(1) The Board may locate its statistical activities in any place within the United Kingdom which it thinks necessary or expedient for the exercise of its functions.
(2) In choosing a location or locations under subsection (1) the Board must take into account the need to—
(a) recruit and retain suitably skilled and experienced employees;(b) maintain effective contacts with users of statistics, in particular within central government; and(c) maintain the influence of official statistics on policy.”
The noble Lord said: The Government should be able to accept Amendment No. 124A. First, it would affirm that the board may locate its statistical activities in any place in the UK if it thinks it necessary or expedient for the exercise of its functions. I affirm the importance of spreading public services, including Civil Service work, around Britain, and I have been involved in a good number of such exercises. However, a certain finesse is needed where the function is by its nature a central Whitehall function; hence the three factors in the amendment which we say the board must take into account: first, the need to recruit and retain suitably skilled and experienced employees; secondly, the need to maintain effective contacts with users of statistics, particularly in central government; and, thirdly, the need to maintain the influence of official statistics on policy.
In making the case, I am relying substantially on a briefing from the Association of First Division Civil Servants—the FDA—which is the union for senior civil servants. It is a TUC affiliate, so I am told that I should declare an interest in that FDA members also help to pay my pension. The central issue raised by the amendment relates to the location of the ONS and whether the board will have a coherent job of work to do. If the determination of the location of ONS staff is excluded—if, for example, the board is precluded from deciding that the national accounts section must be at the heart of Whitehall—I fear that the standing and reputation of the board will be negligible from the start.
An ONS-commissioned survey of 2006 on the business case for ONS relocation from 2008 onwards states on page 7:
“Looking beyond March 2008 the Government’s plans to convert the statistical side of ONS to become a non ministerial department reporting to an independent governing board … These organisational changes will have little or no impact on the ONS relocation programme … however any decision taken after the conversion will be the responsibility of the independent governing board”.
That raises two important questions: one about reversibility; the other about responsibility. The survey also states:
“There is some reluctance on behalf of the National Accounts Group and the Methodologists to embrace the proposed change to re-locate outside of London and they hold strong views on the likely risks to the business if this change is adopted. Their concerns are mainly around the ability to retain existing staff and recruit new, suitably qualified and experienced staff outside of the London area. This may have an impact on the quality of statistical output in relationships with key customers and stakeholders”.
I submit that it must be part of the board’s scope to conclude, if it so wishes, that the current move to take all ONS activities out of London, mainly to Newport, has caused a loss of morale and efficiency. The survey’s figures on senior civil servants are quite astounding—I shall give them in a moment. All colleagues who have taken part in these debates will have seen the FDA’s evidence to the Treasury Select Committee to which I am referring. The FDA points out that it is not simply making a trade union point, by any manner of means; it is expressing deep dismay at the impact on professional standards. It points out that no other country in Europe, with the exception of Germany, which has a highly federal structure, has a significant national statistical office presence in its capital city. Moreover, the demotion of ONS is not just from the outskirts of London, but from what we have always known as the Treasury building just across the road. We all know that in whatever walk of life we come from, access to and location close to the highest level correlates with the degree to which our function is taken seriously. If, in effect, none of the functions of the staff of the ONS is located in Whitehall, it looks a bit like a circus animal. The ONS will have a small presence here just to serve the board, with everyone else somewhere else.
The other point made is that the Newport labour market is not going to produce the specialist skills required to draw up, for example, the national accounts. The FDA concludes as follows:
“The FDA believes that the ONS is at crisis point. The cumulative impact of the need to deliver efficiency savings, the requirement to locate many key areas of work away from London and poor management of people and processes is putting the future delivery of the ONS’s outputs at risk”.
I shall mention two of the survey results. Only 11 per cent of ONS senior civil servants think that the organisation is well managed, which is 40 percentage points lower than for the Civil Service as a whole. The second result is that 11 per cent of ONS senior civil servants think change is well managed in the organisation, which is 22 percentage points lower than for the Civil Service overall.
I have some sympathy with an observation that could be made: this is most unfair on the senior managers of the ONS. I think it is most unfair, but I have quoted the facts. It is most unfair that they are the people carrying the can in these circumstances—we have all been there and got the T-shirt—and have to take all the opprobrium of such a relocation.
I want to put on the record my personal thanks to the director of ONS for her courtesy and ready agreement to arrange for a senior colleague from Newport to come to the House of Lords and discuss with me over a cup of tea some factual questions concerning statistics on income distribution and how the £30 billion or £40 billion paid out in City bonuses fit into the published data based on averages for all employment pay increases widely quoted in inflation analyses, or excluded as the case may be. This is against a background where the board, if it is to have any authority, needs to have the whip hand over the Treasury on the publication of statistics on things like income distribution, not the other way around. Is that sort of signal being sent at this point in time? The answer to that question, in the vernacular, is “You must be joking”. The ONS seems to have been set efficiency targets by Gershon, on top of Lyons, hence the relocation targets. But I have to say that if anyone were to define cost-cutting as synonymous with efficiency, we would call it a caricature.
To recapitulate: first, after these changes, will there continue to be a significant London presence? I think the answer is no. Some 700 ONS staff are still here at the moment, but they will virtually disappear. Secondly, will it be possible to get staff with the specialist skills needed if London is closed down? The answer, I submit, is no. Thirdly, will there be a significant loss of experience through people resigning? The answer to that is yes. Fourthly, was there or is there still room for a compromise, such as keeping national accounts in London? That was rejected out of hand, so everybody will go. I do not see why that proposition has to be rejected out of hand.
My noble friend should be able to find a way to show ONS staff some light at the end of the tunnel—and I do not mean just the light at the end of the Severn Tunnel on the Great Western Railway. The location changes must not be set in concrete before the board gets to work. An assurance is needed that if—I believe when—the board concludes that the comprehensive nature of the relocation has gone over the top and that it is damaging the quality of national statistics, the board will be able to make the necessary adjustments. So the changes cannot be set in concrete and some may need to be reversed, as the Irish found—it is mentioned in the FDA memorandum— when they initially moved all their parallel functions from Dublin to Cork. I shall consider carefully what the Minister has to say. I beg to move.
I am grateful to the noble Lord for bringing forward this amendment. At Second Reading and in Committee last week I raised the issue which he has raised in greater detail today. Since last week I have had a chance to read for the first time the FDA evidence to the Treasury Select Committee. That is the most damning document one could read of a decision to relocate any department anywhere in the UK given that one is talking about the FDA. It is not the miners’ union led by Arthur Scargill. One has to take what it says extremely seriously.
As a matter of principle, we on these Benches have been great supporters of relocation. Indeed, my noble friend in another place Dr Cable has argued that the whole Treasury should move to Liverpool—a suggestion of which the Treasury has not approved with the alacrity with which it is forcing people from ONS to go down to south Wales. But there comes a point where, however much one might favour the principle of relocation, the cost and benefits weigh the other way. It seems to me that in respect of certain of the functions of the ONS, as the noble Lord, Lord Lea, explained, the argument for moving to Newport has not been made.
Last week I referred to information which had been passed to me from someone who currently works for the ONS. It was claimed that, as of a fortnight ago, of the division which produces the RPI and the CPI—it has a staff of 35—not one of them had chosen to relocate to Newport and that there were serious risks to the production of those statistics over the coming months. Does the Minister recognise those figures and that danger? What action will the Treasury take if it believes that there is a serious risk that major statistical series will be disrupted if the move, as currently planned, goes ahead?
As regards the role and powers of the board, if the amendment were passed, to reverse the changes, I fear that that could be extremely difficult unless it were possible to relocate back at a cost saving. As we have heard from the Minister, a five-year financial settlement has been agreed with the ONS which is predicated on the move to Newport being successfully concluded, with the reductions in costs that that brings with it.
While I support the amendment and the sentiments underlying it, unless the Minister is about to tell me that the settlement can be re-opened, I have some doubts that it is a reversible situation.
We have considerable sympathy with the amendment. We have debated several times the issue of relocation to Newport. I do not think that anyone has yet found any comfort in the situation in which the ONS finds itself.
There are two issues in relation to the amendment. First, in relation to Newport, is the position reversible? Does it have to happen? What are the cost implications for the five-year settlement? That is one range of issues for the here and now. The noble Lord, Lord Newby, and the noble Lord, Lord Lea, referred to the serious practical difficulties that the ONS appears to be encountering in being able to carry on its ordinary work given the unattractiveness to many of the ONS staff of relocating to Newport. It is, in fact, a very nice place to go, but I do not think that it could be regarded as somewhere we would expect statisticians to want to congregate in large numbers. It is not a natural statistical centre of the world or surprising that existing staff will not want to go there in large numbers. That is one set of issues.
My second set of issues concerns the future freedom of the board, which is also very important. We are told that this is a non-ministerial department, but we have never really had teased out what goes with being such a department. Does it mean that you get bullied by Lyons mark 2 or Goschen mark 3 into doing something you do not want to do or does the board actually have freedom? We have been told many times in Committee that the board will be trusted to do the right things, but we have never really had spelt out the constraints on the board’s freedoms, so I welcome the debate that the amendment tabled by the noble Lord, Lord Lea, has allowed us to have on this issue.
I, too, support the amendment tabled by the noble Lord, Lord Lea. The Government should listen very seriously to what he has said. The comments made by the noble Lord, Lord Newby, reflect the seriousness of the situation; that is, the statisticians who compile the CPI and the RPI will not be moving, which is a very dangerous situation. There will be a board, but no employees. The noble Lord, Lord Lea, is right to recommend that the board has the power to move to wherever it is necessary to get the right quality of employees.
Perhaps I may briefly refer to cultural change. The noble Lord, Lord Newby, raised this issue at Second Reading and I referred to the 29 targets that the Office for National Statistics is bidden to meet. The noble Lord, Lord Lea of Crondall, has thrashed out the bare bones of what we were asking at Second Reading. We have not had any answers to those worries. I referred earlier today to whether it is possible for the Statistics Board to hit the ground running. I simply do not believe that it is. I feel very strongly about the combination of where the Office for National Statistics is coming from, the regime under which it has been controlled to date and what is expected to happen with all this independence and rebuilding of public trust as the objective. Quite frankly, it will not happen unless someone takes a serious look at this Bill and makes many important changes between now and Third Reading.
I am grateful to my noble friend for this amendment, which has triggered an interesting and important debate. We are in transition at present and, in any cost-benefit analysis, rather more of the costs are obvious than the benefits which accrue. I want to put in context the Government’s policy on relocating activity outside London and the south-east. It developed following Sir Michael Lyons’s independent review of relocation, published three years ago, which argued that government was located too much in London and the south-east, to the detriment of other nations and regions within the UK. The Government welcomed that report.
The Lyons review argued that relocation offers value-for-money gains, with departments able to take advantage of significantly lower rents and potentially lower labour costs in other regions by aligning pay with local labour market conditions. Unnecessarily locating government activities in the most expensive part of the UK does not make sense. I ask whether anyone quarrels with those important propositions. Relocating posts out of London also increases opportunities in other parts of the UK, such as allowing people from other locations to join the Civil Service. Relocation delivers economic benefits for an area by creating valuable jobs. New locations can be a spur for new ways of working, adopting better business practices, processes and technology, and reforming organisational culture. That is why the Government are making steady progress across departments in terms of relocation. The Ministry of Defence has moved 1,900 posts, the Home Office is moving 1,300 posts and the Department for Work and Pensions is moving 3,900. They are not just operational posts; policy work is also moving. For example, DfID has moved various policy teams from London to Scotland. Specialist work is also being moved: 150 posts in the Department of Health and a former NHS information service have migrated from offices in London and the south-east to Leeds.
The ONS has a part to play in this wider strategy. It is relocating jobs out of London. I might add that accommodation costs are five times higher in London than they are in Newport, where most of the relocation is going. In circumstances where we all recognise the burden of London housing costs when it comes to the question of recruitment, the advantages that Newport offers will be recognised. This gives the ONS an opportunity to create a new structure, which will effect efficiency savings.
I recognise that my noble friend has rightly identified the concerns of the FDA about the dislocation caused by the move. Of course there are concerns at this stage, and it is important that the ONS responds to them. That is why there are significant relocation packages to encourage staff to relocate to south Wales and to provide support and additional training for them. It is recognised that asking staff to do this involves a degree of sacrifice on their part. But these are issues that the FDA and the other unions involved are well equipped to deal with, with regard to managers. I recognise what my noble friend is indicating; namely, that there is some dislocation that is causing anxiety at this stage. These issues need to be addressed, but he will also recognise that the current process is at probably its most stressful position.
I might add that Newport is not the end of the world, certainly not for statisticians. There is a significant ONS office already in Newport, so we are asking people to relocate not to a new site but to a well established office with much statistical expertise already in place. I recognise the commonsense point that my noble friend expressed so graphically, that the closer one is to key policy-makers, the louder one’s voice may be—or one thinks that it is—and that one does not need such a loud voice when one can whisper around the corner rather than calling from afar. That is a matter to take on board. The board will have to take responsibility for ensuring that this relocation does not adversely affect the quality of its work. But there is no evidence that that has been the case in other departments, and I see no reason for thinking that ONS managers will be any less successful than the Department of Health, for example, has been in moving its specialist workers.
However, the concerns need to be met. I would be more concerned if my noble friend had had neither sight nor sound of any comment from organisations representing the workforce involved. Far from that being the case, he said that a great deal of activity is being carried out by the First Division Association, which is not a negligible influence on the Government or the Civil Service. I am fully aware of the anxieties that my noble friend expressed, but we are at the most difficult point in the process and machinery is in place to meet the difficulties that have arisen.
If the move to Newport were stopped, it would create a very difficult situation. The board would be unlikely to think that that was a judicious action to take. The ONS is fitting into a pattern followed by many government departments. Therefore, the problems associated with relocation are widely known throughout government, as are the benefits. I reiterate that many of the benefits accrue in the longer term. An ONS office exists in the relocation area. Staff will find housing costs in that area a good deal less expensive than they are elsewhere. That represents for many a real improvement in their cost of living although I accept that relocation costs apply in any move. That is why we have packages in place to address that.
Concern has been expressed on all sides of the Committee about an aspect of policy that generally achieves widespread agreement; namely, that we should seek to spread government functions and Civil Service jobs more widely than has been the case in the past. However, there are always anxieties about the disruption incurred in that. Nevertheless, I have every confidence that the service will meet the requirements imposed on it by these changes. The Office for National Statistics—and, in due course, the board—needs to wrestle with anything that impacts directly on the success of its work. Neither the ONS nor the board would fulfil its duties if the relocation resulted in a deterioration in the work of our statisticians. I have no reason to believe that that will be the outcome, but I appreciate that the needs of the staff should be taken seriously. These are serious issues concerning a service that is of great importance to the nation. The ONS, and subsequently the board when the Bill becomes an Act, is obliged to ensure that this transition is effected in a way that allays the fears of my noble friend and all Members of the Committee who spoke about this issue.
I am afraid that I did not find that a very satisfactory answer. I hope that before Report my noble friend will ensure that there is very full consideration of the outstanding questions. He said that the board would not be doing its job properly if this move resulted in a deterioration in the work of statisticians. I am afraid that he contradicted himself by implying that there is no way in which this thing can be reversed. Government doctrine has to be reversed before Report.
I thank all noble Lords for their helpful contributions. The central point that has been brought out and is now ready for drafting is that the board must have employment location as one of its central functions. In all areas of employment, that must be a central strategic function of senior management and strategic management; everyone knows that.
The central fallacy in my noble friend’s brief, which comes from the Treasury, is that it does not compare apples with apples. The first rule of statistics is that you must compare apples with apples. What my noble friend has done—he is a great friend of mine, so I can say this—is compare the minimal move of certain people out of the Ministry of Defence, or the agriculture department or whatever, with a lock, stock and barrel move of the ONS. That is not comparing apples with apples, and no self-respecting statistician would make such an error. Is the Bank of England going to move lock, stock and barrel? Of course not. The same goes for the Ministry of Defence.
I beg my noble friend to look at the three criteria, which have been carefully drafted; they are not just done off the top of someone’s head. The Treasury has not begun to deal with this remotely satisfactorily in the notes that it has prepared. As regards the idea that things are over the hump and will get better, I am afraid that the FDA says that it could all get worse. I see no evidence to support the Panglossian view that the relocation has gone through the worst. I regret to say that I will have to table an amendment very much like this on Report, unless my noble friend can think of a way of meeting half way the very logical points that I have made. In the mean time, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 27 [Directions]:
[Amendment No. 125 not moved.]
126: Clause 27, page 11, line 6, leave out “Chancellor of the Exchequer” and insert “Prime Minister”
On Question, amendment agreed to.
[Amendment No. 127 not moved.]
128: Clause 27, page 11, line 17, leave out “Chancellor of the Exchequer” and insert “Prime Minister”
On Question, amendment agreed to.
[Amendment No. 129 not moved.]
130: Clause 27, page 11, line 24, leave out “Chancellor of the Exchequer” and insert “Prime Minister”
On Question, amendment agreed to.
[Amendment No. 131 not moved.]
132: Clause 27, page 11, line 31, leave out “Chancellor of the Exchequer” and insert “Prime Minister”
On Question, amendment agreed to.
[Amendment No. 133 not moved.]
134: Clause 27, page 11, line 33, leave out “Chancellor of the Exchequer” and insert “Prime Minister”
On Question, amendment agreed to.
135: Clause 27, page 11, line 36, leave out “in writing” and insert “by order”
The noble Baroness said: I shall speak also to Amendments Nos. 144 and to Clause 27 standing part, which are in the same group. Clause 27 creates the usual draconian power of direction which the Government reserve for public bodies. Our natural instinct is to oppose this power remaining in the Bill because it is the very antithesis of the independence that should be created by it. How can there be proper independence for the Statistics Board if it has to look over its shoulder the whole time to see whether it is upsetting the Government or the devolved Administrations? The Government have not made their case for this power to be established in the Bill, which is why we have opposed the Question that Clause 27 stand part of the Bill. The Explanatory Notes offer no specific assistance either. Why is the power needed and in what circumstances do the Government believe that the clause will be activated?
The Bill refers to a “serious failure” by the board to comply with its objective or to perform any of its functions, but the judgment is that of one man: the Prime Minister, now that our earlier amendments have replaced the Chancellor. Let us suppose that the board had reached a judgment on the proper calculation of efficiency in the National Health Service that showed that the Government’s policies were resulting in a massive waste in the NHS—noble Lords will recognise that this is not a fanciful example—or that the board decided that changes were needed to crime statistics which had the effect of showing the Government’s achievements in a bad light. Again, this is not a fanciful example. What is to stop the Prime Minister stepping in and saying that he considers that the board has not complied with its objective in this regard? He might argue that it would not serve the public good if public trust in the NHS or in the police were so undermined by the new statistics that it would perhaps create social unrest.
It is not only the Prime Minister who has this power, but also the devolved Administrations. They have the power to step in and exercise the functions of the board if the direction is not complied with. I believe that this is an unusual component of the conventional power of direction, which is why our Amendment No. 144 would delete subsection (12). What precedents exist for such a power—not the power of direction but of step-in? In what circumstances has such a power been used in practice?
Clause 4 contains the usual, wide-ranging grounds for the removal of the chairman and the other non-executive members. Can the Minister envisage a situation where Clause 27(12) could be invoked to allow the Government to step in and act, but where Clause 4 did not allow the removal of the chairman and the non-executives? I remind the Minister that Clause 4 allows removal where a member is,
“unable, unfit or unwilling to perform his functions”.
Why is that power not good enough to change the board? Why does there have to be a power of direction backed up by the power to step in as well? The Bill is weighted towards circumscribing the independence of the board. That is why we believe that if the power is to remain in the Bill, and especially if it is to include subsection (12), more parliamentary oversight is required.
It is helpful that the direction is to be laid before Parliament, but that does not amount to a parliamentary process. Accordingly, Amendment No. 135 would require a direction to be made by order. This is a modest amendment, because it requires by virtue of Clause 62 only the negative resolution procedure, of which the Minister will be aware we are normally dismissive. The important point is that it would not impede the operation of an order, if it were ever determined that one were necessary and urgent, but it would allow a parliamentary debate if appropriate. That is an essential protection for the Statistics Board.
Powers of direction are important not because they are often used—history shows that they are used rarely in the public sector—but because the threat of their use is a subtle, or even overt, bargaining counter between the holder and the object of the power. That secret weapon of control will be made less sinister if all parties know that Parliament will have a proper role if the power is used. I beg to move.
I echo the last point of my noble friend about the power of direction standing as a very real threat over the board. It will always be looking over its shoulder at the possibility of a direction being issued under the clause. If it knows that the Cabinet Office, or whoever, must produce an order before Parliament which could be debateable—albeit by the negative procedure—that would be a considerable reassurance and a further indication of the distancing of Ministers from the day-to-day operation of the board.
Almost the first statement that the Government made about the Bill was that the board distances Ministers from the operation of the statistical system. My noble friend’s amendment would be a tangible expression of the Government’s own philosophy. I hope that we will be able to support it.
On the face of it, the clause is pretty draconian. The definition of a “serious failure” could be pretty flexible. If the Minister believes that his colleagues here are always reasonable and sensible, perhaps he might contemplate the fact that Mr Salmond gets rather fed up with the Statistics Board producing statistics which inaccurately reflect the future of oil reserves in Scotland. The noble Baroness is therefore right to raise serious questions about the broad sweep of this clause.
It would be helpful if the Minister gave us some idea of what the Government consider the kind of circumstances in which it might be invoked, particularly those in which the Government would not simultaneously invoke the earlier clauses about removing either the chair or non-executive directors. In many circumstances—relatively rare ones, I suspect—that would be the more logical way of doing it. If the Government wish to retain the power, having to come to Parliament to do it would serve as a break on their willingness to do so, as noble Lords have said.
I assure the noble Lord, Lord Jenkin, that the clause is as far removed from the day-to-day operations of the board as it is possible to get. It embraces the ultimate sanction against the board when there is a failure of such seriousness that the Chancellor acts. In acting, it is inconceivable that there would be no parliamentary response to such a dramatic development.
The clause, which the noble Lord, Lord Newby, suggested was draconian, is actually less powerful in its impact upon the body as a final sanction than exists for the Food Standards Agency, where the Secretary of State can give such directions as he may consider appropriate for the purposes of remedying a serious failure. Similarly, Section 40 of the Environment Act empowers the Secretary of State to direct the Environment Agency on the implementation of any Community obligations or international agreements. That is what this clause does in the event of such neglect on the part of the board of its obligations under a European directive. Far from having anything to do with the day-to-day operations of the board, it is the final sanction when there has clearly been a complete breakdown of understanding of what it is necessary for the board to do such as to trigger the Chancellor of the Exchequer’s action. It is inconceivable that such an event would take place without the most widespread public debate and parliamentary response to it. We would be reflecting a very serious crisis in the operation of a board. Moreover, that board, more than the other bodies I referred to earlier, is recognised in terms of its independence and its performance—I refer to the individuals who have held the office of National Statistician and to the Office for National Statistics, which is due to be developed and subsumed into this board.
I assure noble Lords as strongly as I possibly can that this is the ultimate fall-back position necessary for the Minister responsible for the overall operation of the board—the final sanction that he or she has in circumstances where there has been a significant dereliction of duty and failure. Such a failure, being massively in the public domain, would need to be open to reporting. It is inconceivable within that framework that there would not be the fullest parliamentary debate upon such an act. We are describing the position of crisis in the ultimate situation, where there is a breakdown.
One or two noble Lords indicated that they hoped that this would never arise. It is highly unlikely that a body as responsible as this board would ever get into these circumstances, but there is a need for a failsafe mechanism for the Minister who is responsible for Parliament and to the people for the discharge of the functions of the board. Therefore, a reserve power is necessary. Otherwise, it must be contended, what is being suggested is that the board could get into a very serious circumstance indeed, without a Minister having any direct responsibility for putting things right.
We asked the Minister for examples and he gave us none. We asked him to explain why Clause 4 did not give the Minister sufficient powers. The Minister has given other examples of directional powers and I do not believe that they are as severe as this clause, which allows either the relevant Minister or the devolved Administration to step in and exercise the powers of the board. We are less than convinced that this is the right way to go. My amendment proposed a modest parliamentary procedure which would have acted as a backstop. I do not want to carry this over to Report; I would like to seek the opinion of the Chamber.
136: Clause 27, page 11, line 40, leave out “Chancellor of the Exchequer” and insert “Prime Minister”
On Question, amendment agreed to.
[Amendments Nos. 137 and 138 not moved.]
139: Clause 27, page 12, line 5, leave out “Chancellor of the Exchequer” and insert “Prime Minister”
On Question, amendment agreed to.
[Amendment No. 140 not moved.]
141: Clause 27, page 12, line 8, leave out “Chancellor of the Exchequer” and insert “Prime Minister”
On Question, amendment agreed to.
[Amendment No. 142 not moved.]
143: Clause 27, page 12, line 12, leave out “Chancellor of the Exchequer” and insert “Prime Minister”
On Question, amendment agreed to.
[Amendments Nos. 144 and 145 not moved.]
146: Clause 27, page 12, line 18, leave out “Chancellor of the Exchequer” and insert “Prime Minister”
On Question, amendment agreed to.
Clause 27, as amended, agreed to.