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Smarter Government

My Lords, I thank the Minister for repeating the Statement made in another place. Noble Lords might think it strange that this Statement is made just two days ahead of the Pre-Budget Report. As usual, the press has been full of stories about what might or might not be in the PBR, but today the Prime Minister chose to steal the Chancellor’s limelight by announcing the efficiency component of the PBR and then sending the Chief Secretary along to the other place to explain it. This has all the hallmarks of dysfunctional government, and does not surprise us. I turn to the content of the Statement and the document, Putting The Frontline First, which basically sets out the Government’s efficiency stall in a pretty wrapper of citizen-centred jargon. We should recall the Government’s record on efficiency. The Office for National Statistics has confirmed that in the 10 years after 1997, public service productivity fell by 3.5 per cent. Private sector businesses improved productivity by 30 per cent in the same period. Put simply, the Government have mismanaged our public services to a shocking degree. Back in 2001, the Prime Minister told the Institute of Directors that, ""the efficiency we seek in the private sector we demand in the public sector…Government at every level–national, regional and local–must raise its game"." The only area in which the public sector has raised its game is announcing efficiency savings which are not delivered. In 2004, the Government announced £20 billion of efficiency savings following Sir Peter Gershon’s review. The NAO’s first look at those savings in 2006 showed that they were "provisional", which is code for "they don't exist". The Government then claimed that they had realised £13 billion of the savings. However, the NAO said in 2007 that only £3 billion had been achieved. The rest was to varying degrees a figment of the Government’s imagination. Since then, the Government have repeatedly boasted, as they did again today, that they have achieved £26 billion of savings. The Minister also said that the Government are on track to achieve £30 billion of savings between 2008 and 2011. The document refers to £35 billion. Can the Minister explain how £5 billion was lost between the document and the Statement? However, all these assertions are unaudited and, given past form, why on earth should we believe a word of them? Today, we have heard the final chapter of the Prime Minister’s long-running fairytale about efficiency savings. We are promised that another £12 billion a year will be realised. But there is precious little detail. The only figure found in the Prime Minister’s introduction to Putting The Frontline First is a saving of £100 million from streamlining the senior Civil Service. The Statement referred to a couple more figures, and various other figures are scattered throughout the document, but there is no summary of the savings and little information about when they will be realised. There is no mention of costs incurred in achieving those savings. My first question to the Minister is whether the Government will place in the Library a schedule which sets out the various savings mentioned in the report, analysed by the year in which they will arise and reconciled to the overall £12 billion. Will the Minister also undertake that the schedule will include the costs of delivering the savings? Secondly, I ask the Minister to say what contingency lies behind the figures. The Government will be aware that people, whether in the public or private sector, tend to be optimistic about the amount of savings and their timing. For what contingency have the Government allowed in announcing savings of £12 billion? Thirdly, I have one detailed question for the Minister. Yesterday, the Chancellor said on air that the NHS IT project would be put on hold. He said: ""I think that we don’t need to go ahead with it just now"." Three cheers for that; we have been saying for some time that it is a wasteful project. But today there is confusion, with a Department of Health official reported as saying that the Chancellor "misspoke". What, if anything, is included within the totals dealt with in this Statement relating to the NHS IT project? In many ways, we are immensely flattered by the document. It plays catch-up with many of the things that my honourable friends Mr George Osborne and Mr Philip Hammond have announced during the past few months. For example, we announced a complete re-think on quangos; cutting the cost of Whitehall by 20 per cent; and handing power to front-line professionals. In some other areas, the document does not go as far as us. We have gone further on signing off high levels of public sector pay and on cutting the consultants and communications budgets. Quite a lot of the document merely reannounces existing policies. We have heard before about community asset transfers, about patient-focused approaches in health, about e-auctions and about reducing ring-fencing in local authority finance. We have heard about the Tell Us Once programme three times already. There is also a lot missing from this document. One huge cost overhangs our future; namely, the cost of public sector pensions, but there is not a word about it. There is nothing in the document to give any confidence about delivery of savings; for example, about the role of incentives in delivering savings. We are yet to be convinced that the tentative moves towards cost transparency go anything like far enough. When the Prime Minister was the shadow Chancellor of the Exchequer in 1995, he told the Labour Party conference: ""We abhor waste and imprudence in public spending not because it is electorally convenient to do so or the markets don't like it—but because the victims of waste are not those with money but those who find it difficult to make ends meet and for whom the best form of kindness is efficiency"." What a pity that the Government have spent the past 12 years dishonouring that fine sentiment. The only reason for today’s Statement is electoral convenience. The Government calculate that they can convince the electorate that the years of failure on efficiency can be wiped out by a skimpy document. The only kindness that is now appropriate is to put this Government out of their misery and let a new Government, committed to real public sector reform and efficiency, take control of our economy.