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The Holy Roman empire was neither holy, Roman nor an empire. So it is with the independent review of public sector efficiency by Sir Peter Gershon; it is neither independent nor a real review, and it does not have much to do with efficiency in the real world. Gershon's review is a form of gesture politics, politically inspired by the Chancellor to con us that he is serious about inefficiency and wastethe inefficiency and waste to which he has contributed over the past seven years.
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Let us take civil service numbers. More than 500 new civil servants were hired every week in 2003. Civil service numbers increased on the Chancellor's watch from about 475,000 in 1997 to more than 515,000 at the end of 2003. Have we any faith that he will achieve civil service head count cuts of up to 100,000? Not really. It is much more likely that those posts will be rebadged and recycled. Serious cuts to the level that the Chancellor is predicting will not happen.
"it's all a bit of a jokeGershon did a PowerPoint presentation a few months ago and made a few telephone calls to Departments on the back of it. You will find the document produced on the day of the CSR a bit thin."
Gershon is short on serious detail. Why? Because Departments will not be able to tell us until the end of October exactly how those efficiency gains will be delivered. Why did the Chancellor not wait until that work had been done before announcing his figures? I will tell the House why. He was running scared of the Tory attack on waste. He was behind the game, and he realised that the James review was making the running. We will identify how profligate the Chancellor has been in the use of taxpayers' money over seven years.
As my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke) made clear, smarter IT systems, better procurement and even cuts in the headcount will not in themselves deliver £21.5 billion in efficiency savings. As he and those on the Conservative Front Bench identified, that requires policy change, which is what the James review is about and why our approach is so different from Gershon's. Yes, it involves looking at closing down, in whole or in part, Departments such as the Department of Trade and Industryany residual function can be moved to another Departmentand, yes, it involves closing down wholesale the regional development agencies: policy change, not paperclips.
Only nowperhaps the Minister will reply to thishave the National Audit Office and the Audit Commission been enlisted to draw up detailed plans on how each Department should meet its targets. Why did the Chancellor not do that years ago, or, better still, a few months ago? That would have been nice and helpful. All that looks like seat-of-the-pants stuff from where I am standing. Even worse, no one is sure how the monitoring of Departments' success or failure in meeting those targets will be measured. It is estimated that only 60 per cent. of the £21.5 billion target for savings is cashablethat is, a monetary value can be ascribed to each cut. It is very easy to identify what will be saved by cutting the headcount. It will probably be easy to identify more efficient, cost-effective procurement. However, let us take a look at the documents produced in relation to the Home Office, whose target for efficiency gains includes
"substantially increasing the proportion of officer time spent on front-line policing".
Amen to thatan aim that we all sharebut the Government cannot tell us exactly how it will be measured so that those efficiency gains can be counted towards the £21.5 billion efficiency savings total.
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Everyone agrees that measuring public sector productivity is a complex intellectual inquiry, but why has the Chancellor taken seven years to get round to it? Farcically, the Treasury failed to meet its own target, set in 1998, of delivering 2.5 per cent. in efficiency gainsironically, the same target for savings as that given to Departments in this year's CSR. At that time, the Treasury said that it could not work out how to measure its own output, and it cannot do so today. We must wait until October before it even gets close to telling us how that will be delivered and measured adequately. Ministers might reply that Sir Tony Atkinson will deliver his interim report. Yes, but he will do so next week, and the report is unlikely to give us the detail, Department by Department, on how the targets will be met. That is not just my point; it has been made on behalf of the Treasury Committee by the right hon. Member for Dumbarton (Mr. McFall), having heard all the objective evidence from witnesses this morning, and the point was echoed and reinforced by my hon. Friend the Member for Sevenoaks (Mr. Fallon).
The documents produced this week demonstrate that the Chancellor's approach is to spend first big time and ask the really detailed and important questions latervery much later. I trust that, when we publish the James review before the next general election, we will do what this week's set of announcements has not done: explain how serious efficiency gains can be delivered. That will require programme change and, above all, involve the introduction of the right to choose in our great public servicesschools and hospitals. I look forward with relish to debating the James review and the Conservative alternative later this year.
Mr. Dominic Grieve (Beaconsfield) (Con): It has been a pleasure and, from my point of view as the shadow Attorney-General, an education to sit in on the debate and hear hon. Members' contributions. Generally speaking, my role confines me to the spending end of things, rather than looking at how money should be allocated.
Mr. Grieve: As I have a heavy involvement in the departmental responsibilities of the Home Office, in addition to my responsibility as shadow Attorney-General, which does not relate to a heavy-spending Department, I thought that it might be interesting to scrutinise the way in which the Chancellor has approached spending in the Home Office, which I shall address in a moment.
The debate has highlighted several interesting points of view, and I was struck forcefully by its aspects on which there was cross-party consensus. The right hon. Member for Dumbarton (Mr. McFall) pointed out with great care that he was extremely concerned about how the Chancellor was going to meet his golden rule on expenditure. His speech was made all the more compelling and interesting because it immediately preceded that made by my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke), who said exactly the same thing and expressed exactly the same concerns, albeit using slightly different language.
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It is apparent that the Government have taken on a phenomenal task. On the belief of speculative receipts, they intend to continue to increase public expenditure further. At the same time, they clearly feel constrained because they are worried about whether that can be delivered, so they are having to ratchet up more than £20 billion of savings to help to subsidise it. I can think of few worse moments to try to make efficiency savings in Departments than the time at which they are also asked to expand their expenditure. That will maximise the likely stress that such Departments will be under. The Government have thus taken on what can be described only as a mammoth project.
I listened carefully to the Chancellor on Monday. His speech contained all the traditional new Labour-speakwe heard of more bureaucrats, seven new agencies and 110 further targets. There will undoubtedly be more borrowing and we can be satisfied that there will be further taxation. We already know that higher council tax is inevitable and, although the Prime Minister tried to suggest today that that would affect only the wealthy, I am rather doubtful. I suspect that the council tax squeeze that will be experienced throughout the country will affect everybody, including the poorest. That is an inevitable consequence of the expansion of expenditure that the Chancellor has projected.
The publication of the Gershon report represented the first occasion since I came to the House when I suddenly realised that I was not at a significant disadvantage as a member of the Opposition. The Minister will know that Oppositions go through periods, especially close to elections, when they have to set expenditure targets, which the Government usually rubbish. That process inevitably involves shadow Ministers identifying savings that might be made in the Departments that they are about to take over. I have been through that process at least once and I daresay that we are embarking on it again. I have been struck that, after meeting and speaking to people, one is always left with two situations. First, when nothing else can be cut, we say that we will make efficiency savings because that always sounds like the easiest thing to do. Secondly, we say that we are not confident that all our fact and figures are right. Of course, we say that because we do not have hordes of civil servants helping us. Yet when I opened Sir Peter Gershon's proposals, I saw that, in terms of content, the document is identical to the sort of document that I would expect an Opposition to produce without all the support services. It is about as thin a document as it could possibly be.
I do not know whether the Minister intends to publish the details of how the efficiency savings will be carried out, the guidance documents and the dialogue that has taken place. I simply say to him, in the spirit of co-operation, that if he wishes to persuade the House that the savings are deliverable, we will need something better than the managerial gobbledegook contained in the document which, frankly, does not amount to a row of beans. It is easy to claim that it is possible to make £20 billion of efficiency savings, but how those are carried out in practice is another matter.
If one reads Gershon or listens to the Chancellor, the one thing that does not appear to be the case is that the Government are carrying out a spending review that completely reassesses the activities in which they intend to get involved. There is none of that and, in those
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circumstances, Gershon is an extremely shallow document. I hope that the Minister will enlighten us on whether he will provide us with further information on which we can make a judgment as to its efficacy. My hon. Friend the Member for Sevenoaks (Mr. Fallon) also commented on that.
What brought me to the Dispatch Box was the matter of my own shadow spending Department. When one looks in detail at what is proposed, one can assess whether what is being offered by the Government is valid. The Treasury released a press statement on the Home Office that makes entertaining reading, including the statements on how everything is so wonderful in the best of all possible worlds. It went on to identify what the extra money will be spent on. It was at this point that my antennae started to quiver as I considered the astonishing omissions from future Home Office spending.
Let us start with the most basic, most important and probably least popular problem. The Government face the biggest crisis in prison numbers ever experienced. Some 75,000 people are in prison and the prisons are at breaking point. The Government cannot deliver the programmes that the Prison Service needs to rehabilitate offenders because of the churn, which means moving prisoners around from one prison to another. As long as that continues, all the Government's aims to reduce crime through rehabilitative sentences cannot work, but the press release makes no mention of a prison building programme.
We are told that correctional services will be modernised by creating the National Offender Management Service and reducing reoffending. That does not exactly reflect a Government who are getting to grips with one of the key issues in a spending Department.Then we are told that the money is going to be used to increase neighbourhood policing and provide 20,000 community support officers, from which I infer that the current increase in police numbers, which has generated 11,000 officers, is not going to be pursued.
We have had endless debates with the Government about the efficient use of resources, but if they want to reduce crime, which costs the country £60 billion per annum, they will have to target investment in the right place. My belief has always been that only a substantial increase in police numbers will enable the Government to introduce community policing on the American scale, which has a proven record of crime reduction. That is a classic illustration of the Government's failure on expenditure. They intend to spend more money but, when it comes to the crunch, they are unwilling to make difficult decisions that could result in long-term, substantial savings to the Exchequer as well as benefits for the national economy. It beggars belief that they should come up with a series of ersatz solutions to crime problems.
Most extraordinarily, we have been told that the money will be used to curb illegal immigration, as I mentioned earlier, even though the Government have never given us a target and cannot enlighten the House about the levels of illegal immigration. I would therefore be grateful if the Minister would ask the Chancellor of the Exchequer to tap the Home Secretary on the shoulder and say, "How can I measure your success in reducing illegal immigration when I have no statistics on
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the problem or, indeed, your efficiency in dealing with it?" In a spending review, such basic issues need to be addressed.
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