Present:  The Rt Hon Michael J Martin MP, Speaker, in the Chair

  The Rt Hon Alan Beith MP, Chairman, Constitutional Affairs Committee

  The Rt Hon Lord Falconer of Thoroton QC, Lord Chancellor

  Lady Hermon MP

  Mr Peter Viggers MP

Apologies:  Mrs Angela Browning MP, Sir Gerald Kaufman MP, Mr Humfrey Malins CBE MP, and     The Rt Hon Nick   Raynsford MP, Minister for Local Government, Regional Governance     and Fire.

1. Reappointment of Electoral Commissioners

The Speaker noted that the motion to reappoint Sir Neil McIntosh and Pamela Gordon as Electoral Commissioners had been agreed by the House on 19th January.

2. The Speaker's Committee Review of the Electoral Commission

The Speaker reminded the Committee of two matters that remained to be finalised in relation to the review: the need for appropriate input of political experience, and how best to get it; and who should carry out the detailed work. On the first point, two options had been suggested: a small cross-party group of senior political figures; or a member of the Speaker's Committee acting as adviser. The Committee agreed that a small cross-party group of senior political figures (to include members of both Houses) should be appointed to advise the review team, and the Speaker undertook to seek appropriate nominees.

The Committee considered how the review should be conducted, with the choice in practice lying between outside consultants, or some kind of internal exercise. The latter option would be less demanding in resource terms, but might need to draw on DCA and ODPM expertise. It was generally agreed that it needed to be clear beyond doubt that ownership of the Review rested with the Committee, even if it drew on the staff resources of DCA and ODPM. It was agreed that the Review would be overseen by a Steering Group of officials, to be chaired by the Secretary to the Committee and with DCA, ODPM and outside representation, and that the Committee's preference would be for the Review itself to be conducted under the oversight of that Group by the House's Scrutiny Unit. The Lord Chancellor suggested that ODPM and DCA might assist the review by providing officials who would be seconded to the Unit to work on the review in that capacity, and not as departmental officials.

The Secretary to the Committee undertook to seek official nominees to the Steering Group and to convene a meeting with these officials, and the Head of the Scrutiny Unit, to discuss how best to approach the Review, and to circulate a paper to the next meeting of the Committee (expected to take place in April).

3. The Electoral Commission's Main Estimate, 2005-06 and Five-Year Plan, 2005-06 to 2009-10

The Committee considered the paper submitted by the Electoral Commission on its Main Estimate, 2005-06, and the accompanying Corporate Plan for 2005-06 to 2009-10.

The Main Estimate, 2005-06

The Committee noted that the Commission was seeking resources for the forthcoming year only for its core functions, and asked whether 2005-06 might therefore be described as a year of consolidation. Mr Younger said that this would be a fair description, but that the likely challenge of a General Election needed to be taken into account. There was also the prospect of a referendum on the European Constitution; if this materialised the Commission would seek further resources by way of a Supplementary Estimate. The Commission's focus was shifting from pro-active policy development and review to working with political parties and responding to needs. Mr Wardle added that the Commission had been in existence for some four years and was now moving beyond its 'start-up' phase; it would increasingly become a mature organisation over the next five years, with a baseline expenditure profile to match.

The Committee asked about the background to the Commission's planned changes of staffing within existing resources. Mr Wardle said that the Commission was taking on approximately 20 new staff, largely to strengthen middle management. It was expected that this would enhance the Commission's capacity for strategic work, strengthening management and corporate governance in the Commission, and improving relations with key stakeholders. There were expected to be consequential savings in expenditure on employing outside consultants as the Commission acquired greater in-house expertise. Mr Younger added that, now the Commission had been up and running for a number of years, it was expecting to find it easier to recruit staff of the calibre it needed. Lady Hermon asked whether efforts to make the Commission's staff more representative of ethnic minorities and women had been made. Mr Wardle said that 52% of the Commission's staff was female and that 14% had declared themselves to be members of an ethnic minority; in his view this was a solid base on which to build in terms of diversity and equality.

The Committee asked how the pattern of the Commission's proposed section 13 expenditure on public awareness would reflect the likelihood that the next financial year would include both a General Election and a national referendum on the European Constitution. Mr Younger said that section 13 expenditure was subject to a cap and that the Commission would make a separate application for funds for public awareness work in relation to any referendum, while public awareness work in relation to a General Election would be funded from within the existing Estimate. Mr Wardle said that the European Union Bill included a requirement that the Commission promote registration.

The Committee asked about the assumptions being made by the Commission in relation to the Estimate concerning likely transfer dates for the functions of the Parliamentary Boundary Commissions and about the estimated spend on preparatory work in 2005-06. Mr Younger said that the preparatory spend would be very small—a team of staff would undertake initial reviews of what was required—and would be met from within the resources being sought. The Commission needed to be ready for whenever the Government decided to make the transfers, but none was expected to take place before April 2006 and the only area in which early change was anticipated at present by the Commission was in relation to Scotland (where the Scottish Parliament constituency boundaries would be reviewed after the 2007 Scottish Parliament elections, in accordance with the provisions of the Scottish Parliament (Constituencies) Act 2004).

The Committee asked about progress in responding to the suggestions made in the Comptroller and Auditor General's 2002-03 'value-for-money' report in relation to the Commission's section 13 expenditure. Mr Younger said that the Comptroller and Auditor General had made two sets of recommendations. The first set—on administration—had all been implemented. The second set of recommendations involved developing better measures of effectiveness in relation to section 13 spending, and the draft Corporate Plan demonstrated some of the progress that had been made. While the Commission had developed a number of useful measures, tracking factors such as recognition and awareness, no direct connection with turnout could yet be made.

Lady Hermon noted that a Bill to reinstate 80,000 'lost' voters in Northern Ireland on the electoral register there had been introduced in the House of Lords and asked how the situation had arisen. Mr Younger said that in his view the discrepancy was due in part to the requirements of individual voter registration. More generally, he recognised that exposure to the Commission's publicity aimed at increasing electoral awareness did not necessarily equate to an increase in registration. However, an outreach tour of Northern Ireland universities before the European Parliamentary elections had led to over 1,000 young people registering to vote. The Commission acknowledged that more work was needed and to this end it was developing a link with the Royal Mail's redirection service. In the longer term, its joint initiative with the Hansard Society to conduct an annual audit of political engagement might shed light on the problem.

The Committee asked about the views of the political parties as to the adequacy of the global provision of £2 million for policy development grants and how the Commission sought to assess the effectiveness of this expenditure in achieving its own aims. Mr Younger said that all parties valued what they received from policy development grants, and that it was the Commission's policy to accept parties' certification of this expenditure at face value. In the course of the Commission's review of political parties, it had been suggested that the scope of the scheme might be broadened to include also European Parliament and devolved assembly work; such an extension would require the ceiling to be lifted. The Commission could see a case for greater public funding to encourage participation in political parties, perhaps by matching small contributions from other sources.

The Committee noted that there had been a significant reduction in the provision for publishing reports and asked whether that reduction reflected any shift of emphasis by the Commission in terms of the relative priority it gave to this aspect of its work. Mr Wardle said that there were two factors at work: the Commission was publishing reports at a slightly lower cost than it had done in the past, and the emphasis of its work had shifted away from reviewing and consultation to securing implementation of proposals already made.

The Committee asked why there was a sharp jump for 2005-06 in the proposed level of public awareness expenditure not allocated under any more specific expenditure head. Mr Wardle said that this reflected a change of focus, with an increased emphasis on general campaigns and Mr Younger added that some more specific expenditure, such as printing leaflets, was not necessarily needed every year. In response to a specific inquiry, Mr Younger undertook to check that the Commission provided leaflets for use in Northern Ireland in Chinese languages.

The Committee noted that the staffing profile of the Commission had changed significantly over the last year, with completion of the local government reviews and of the Periodic Election Reviews and an apparent net shift of about 20 staff into other functions. The Committee asked where the posts had been taken up and how this would strengthen the management structure and respond to new demands. Mr Wardle said that a great many of the staff had moved into the area of communications. There was also a drive to develop enhanced management expertise. The very flat organisational structure of the Commission hitherto had made it difficult to maintain an effective grip on its resources, and the strengthening of its middle management would tackle this problem. The Commission was also strengthening its work with stakeholders—MPs, political parties and local government officers—by deploying experienced staff with a clear remit. Mr Younger said that the induction programme for new staff now included time with political parties.

The Lord Chancellor noted that the Commission had increased its Communications and Corporate Directorate team by 11 people. Mr Wardle said that the increase was now 12 or 13, and the changes were part of a broader restructuring of the Commission's operations. Some of the apparent increase had come from organisational change, such as a policy team moving into the Directorate. The overall aim was to provide better outreach to stakeholders and also better quality research.

Mr Beith noted the sharp decrease in projected income from £1.5 million in 2004-05 to £22,000 in 2005-06. Mr Younger said that almost all of the Commission's recurrent income was generated by registration fees. The much higher income figure in the current financial year reflected the last tranche of special ODPM funding for the Boundary Committee for England's work on local government reviews in preparation for the regional referenda.

The Committee asked for a rough indication of the likely scale of the additional resources the Commission would seek if in the course of 2005-06 there was to be a national referendum on the European Constitution. Mr Younger said that the total amount required by the Commission was likely to be in the range £35-45 million, to include a contingency provision against non-designation of lead campaigning organisations. Mr Wardle commented that the overall cost of the North East regional assembly referendum had been estimated at about £10 million. The Commission's current estimate of the cost to it of a national referendum on the European Constitution had not yet been subject to rigorous scrutiny but was in large measure related to the cost of public awareness measures and administration, including additional staff. The comparable information for the 1975 referendum was not available, but the Commission would look at overseas experience to help refine its estimate of the cost.

The Corporate Plan, 2005-06 to 2009-10

The Committee asked how the Commission's latest Plan was an improvement on its predecessors. Mr Younger said that this Plan had a more strategic focus. It reduced the objectives of the Commission from six to three and also reduced the number of targets and measures, more of which were now out-turn rather than output based. Further reductions were anticipated in future. The Plan would be fleshed out as regards the forthcoming financial year by a separate one year operating plan, to be prepared by 1 April and setting a range of specific performance targets for the year which would be benchmarked with reference to the qualitative and quantitative performance indicators set out in the Five Year Plan.

The Committee raised the lack of detail in many cases as to the precise measures to be used to assess whether objectives had been met; and how the Commission planned to elaborate on these. Mr Younger said that it had been difficult to develop outcome measures in relation to public awareness but that the aim of the Commission was to work through the 2005-06 year towards a step change in this area and to provide more detail when it reported against its operating plan. He added that in some areas the measure of an objective had to be output rather than outcome but that within an improved framework of indicators these measures could be effective. The Lord Chancellor observed that in central Government the trend had been to move on from measuring response rates to examining people's views of the end result. Mr Younger said that the emphasis of the Commission's Operating Plan would be on feedback and on return of qualitative questionnaires.

Mr Beith asked why the Commission sought to use Government acceptance of its recommendations in some cases as a measure of its success—was this consistent with the Commission's status as a body independent of Government? Mr Wardle said that (like the number of breaches of electoral law) it would seem odd not to keep this record. The Commission valued its independence but taking no cognisance of the Government's judgements on its recommendations was not a necessary corollary of this. Mr Younger said that the measure was taken as a performance indicator because the Government's reaction to its recommendations was important; if the Government rejected all of them, then the Commission might need to look at how realistic or relevant they had been; if on the other hand the Government accepted them all, then the Commission might need to question its independence. The level of Government acceptance of recommendations was not an end in itself, but prompted important questions about the relevance and effectiveness of the Commission.

Mr Wardle undertook to make copies of the Operating Plan available to the Committee when it was complete.

The Committee noted that the draft Corporate Plan included no assessment of the risks that might prevent it achieving its objectives. Mr Younger acknowledged that this was a gap in the Plan and that the next plan would incorporate a risk analysis. The principal risks lay in the new management structures not delivering; unexpected events, or known events of unpredictable timing, such referendums and General Elections, disrupting planned work; and in the deterioration in the Commission's relationships with one or more key stakeholders. He would ensure that the Operating Plan included an appropriate risk assessment.

The Committee asked what assumptions underpinned the projected jump in staff numbers from 2007-08. Mr Wardle said that the transfer of responsibility for reviewing parliamentary constituency boundaries to the Electoral Commission would involve the appointment of five members of staff in respect of each of Scotland, England and Wales. Mr Younger said that these would in effect be jobs transferred from the respective Boundary Commissions, so the overall effect on the public purse should be broadly neutral.

The Committee noted that one proposed measure of compliance in the regulatory area was the number of breaches of the law and asked whether this was an appropriate measure to judge the Commission. Mr Wardle accepted that the Commission by its own efforts could not ensure that the law was always obeyed, but this was a way for the Commission to form a view on the transparency of the process for achieving compliance, and on whether it needed to take steps to make it easier for those to whom the regulations applied to comply with them.

The Committee asked about the basis for the assumptions in the Plan underpinning the objective on transfer of Parliamentary Boundary Commission functions and whether the Government had yet indicated a likely transfer date. Mr Younger said that the date of April 2006 represented a very tentative planning assumption, based on informal discussions with officials, but the Government had not formally indicated a likely transfer date. No major resource commitment was involved at this stage.

The Committee asked how the Commission intended to measure its objective to 'make a demonstrable contribution to increased public awareness of the electoral process' and what account had been taken in this respect of the comments made in the Comptroller and Auditor General's 2002-03 report on section 13 expenditure. Mr Younger said that it would be difficult to measure the Commission's progress towards meeting this objective but the annual audit of political engagement which the Commission conducted jointly with the Hansard Society would be helpful in this context.

The Committee asked about the Commission's statement that it will 'follow a five-year research strategy from April 2005 which is responsive to internal and external stakeholders' needs'. Mr Younger said that this statement signalled the Commission's intention to seek more formal feedback from stakeholders. It was important for the Commission to draw up a research plan so that it could avoid duplicating work done by others. As regards the statutory report on the next General Election, the Commission's researchers would keep in very close touch with the British Election Survey. The Commission could not simply prepare a research strategy in isolation because it was from outside that many requirements would be identified.

The Lord Chancellor thanked the Electoral Commission representatives for their attendance, and for their responses to the Committee's questions.

Decisions of the Committee

The Main Estimate, 2005-06

Having had regard to the advice from the Treasury, as set out in the Chief Secretary's letter of 31 January to the Speaker, that the Main Estimate reflected the resource requirements necessary to undertake its statutory duties, and the Comptroller and Auditor General's 'value-for-money' report for 2002-03, the Committee approved the provision sought by the Electoral Commission in its Main Estimate, namely, a Net Resource Requirement of £24,101,000, and a Net Cash Requirement of £23,974,000, with Operating Appropriations in Aid set at £22,000, as consistent with the economical, efficient and effective discharge by the Commission of its functions in 2005-06.

The Committee also agreed that the Commission may make, without reference to it, such minor and insubstantial adjustments to the Estimate as may be required for technical reasons, subject to Treasury agreement in each case.

The Corporate Plan, 2005-06 to 2009-10

The Committee noted that, in parallel with the statutory five-year plan, the Commission intends in addition to prepare for each year a twelve-month operating plan, which will include targets and measures for each of the performance indicators for that financial year. The statutory annual report will then include information on out-turn against these targets. The Committee accepted the Commission's undertaking to supply it with copies of these operating plans, which it agreed will usefully complement the longer-term overarching framework presented in successive Corporate Plans.

The Committee also noted the advice from the Treasury about the Commission's Corporate Plan for 2005-06 to 2009-10 that, while the way concerns it had expressed last year about the number of targets had been addressed were welcome, more work could be done to make the remaining targets more focussed, and that many of the supporting targets are still either expressed in terms of inputs and outputs, rather than outcomes, or are not measurable, and that there remains some lack of clarity of the absolute priority of specific objectives for the Commission.

The Committee agreed with the sentiments expressed by the Treasury, both as regards the progress that had been made in improving the nature of the Plan compared with previous years, and in terms of the scope for further improvement.

The Committee considered whether, in the light of this, the draft Plan was consistent with the economical, efficient and effective discharge by the Electoral Commission of its functions, or whether it needed to be modified to make it consistent. In his advice to the Committee, the Chief Secretary also stated that he would "urge the Commission to work over the course of the year to tighten up the objectives in the plan, aiming for a set of objectives and targets that is more similar in style to that of a central Government department". The Committee noted this advice, and also took account of the potentially damaging impact on the Commission's wider planning processes of delaying clearance, including the consequential delay in preparation of the 2005-06 operating plan. It also took account of the Commission's intention to develop further its focus and objectives as it moved beyond its start-up phase, and of the scope for the Committee's proposed review of the Commission to play a part in this process.

On this basis, the Committee agreed that it was satisfied that the draft Corporate Plan for 2005-06 to 2009-10 submitted by the Commission was consistent with the economical, efficient and effective discharge by it of its functions, but will expect to see in next year's Plan substantial progress by the Commission towards addressing both its own and the Treasury's concerns.

4. Next meeting

The Committee adjourned to a date to be fixed by the Speaker.