MR PETER HOUSDEN

14 NOVEMBER 2005

  Q40  Anne Main: Do you currently have a list of what is provided free and what is charged for as an asset base?

  Mr Housden: Yes. Let me provide you with further information.

  Anne Main: I do not have any idea whether that would make a huge difference or not, because I do not know—

  Chair: We will be getting an answer subsequently on that.

  Q41  Sir Paul Beresford: Each year, Ministers tell us greatly about their efficiency savings and how they are going to manage them. We got the feeling that in the last financial year they were deliberately kept somewhat lower than they might have been. Is that correct? Second, are they increasing these for this year? Do you think you are going to manage them, and how real are they?

  Mr Housden: I have no reason to believe that they were artificially increased or depressed in previous years. As you know, there are two strands to the efficiency programme that we are responsible for: our own targets and those of local government. They are very important. You have been having a sustained conversation with the Department about the likelihood of successes; and of course I have followed that conversation. I personally am confident that they are real estimates, and the signs are encouraging that we will secure them. I noticed in your earlier conversations you asked about contingencies. I think that is good practice because it means that we have a wider range of potential efficiency targets being pursued to make sure that if circumstances mean that in area A we do not get what we want, area B will compensate it. The final point is that when you are planning to secure efficiency savings, you need to do that planning within the heart of your business; so it is not something separate that you do, a hoop that somebody is making you go through. I put in my own note to you earlier on that that needs to be a way of life in a government department, rather than something you do as a programme; so you want everybody all the time to be thinking hard about whether you are really getting the outputs for the investment that we are talking about, where people's time is really used productively. I just think it is about a professional approach to doing the job.

  Q42  Sir Paul Beresford: Will it mean staffing reductions?

  Mr Housden: Yes. Part of the programme explicitly is about the reduction of staff, not only in ODPM but in our partner bodies. There will also be relocation of staff out of Central London and the South-East to other parts of the country.

  Q43  Sir Paul Beresford: Are these savings real or are they just going to be recycled, as they have in the past? Is the taxpayer going to see a reduction in the costs of your Department?

  Mr Housden: The cost of areas of public spending that we are responsible for, as you know, is set within the spending review; but the purpose of the efficiency programme, as we understand it, is to make sure that whatever levels of expenditure we are allocated, that the public benefit most from it. Hence the desire to see smaller government departments, smaller agencies, more resources concentrated on the front line; and that for any given public pound the outputs are maximised. This is about procurement; social housing is a good example where, by pressing hard in those areas, greater outputs can be secured for all given levels of investment. This is what the programme is designed to achieve.

  Q44  Sir Paul Beresford: If I read between the lines, the answer is "no"; the taxpayer is not going to see a reduction—yet you are expecting local government to cut the Council Tax. As I understand it, the Audit Commission is auditing them and their efficiency reductions—is that correct?

  Mr Housden: Yes, just as ours are audited by the National Audit Office and supported by the Office of Government Commerce, the Audit Commission will be looking at local authority efficiency savings.

  Q45  Sir Paul Beresford: In doing so, are they allowed to recycle in the same way?

  Mr Housden: Local government?

  Q46  Sir Paul Beresford: Yes.

  Mr Housden: Yes.

  Q47  Sir Paul Beresford: And yet you are going to cap them and you are trying to keep their level of the Council Tax down.

  Mr Housden: I think it is important to allow local authorities the flexibility to get the maximum value for their Council Tax payers from the Council tax that they pay and the government grant they receive. This is the purpose of the efficiency programme.

  Q48  Sir Paul Beresford: When you were looking at capping in the past, the way in which it is measured is as a percentage increase, and yet you will recognise that some councils are more efficient than others, and therefore to look at capping on an efficiency basis, purely on percentage increase, is fraught, is it not?

  Mr Housden: That is not the basis that I understand capping is considered. The legislation requires that the specifics of the individual case of the council concerned are considered in relation to the particular year that has been dealt with.

  Q49  Sir Paul Beresford: But Ministers say, "We are setting a 5% capping level; your Council Tax must not go over". Obviously, there is a drastic influence on the way in which the ground has shifted around, but some councils are distinctly more efficient than others, and they still get clobbered with the same 5% or whatever it is. If you have a council with a very low Council Tax, a 5% increase can be pretty minimal; whereas for its neighbour a 4% increase would be horrendous. Efficiency and judging of Council Tax levels on a percentage basis, which is the way they have done it in previous years, is wrong, is it not?

  Mr Housden: I am not in a position to comment on that, I am afraid at this stage.

  Q50  Sir Paul Beresford: Perhaps you could look at it and let me know.

  Mr Housden: I am very happy to do that.

  Chair: It has to be said that there are other issues to take into account in a council's efficiency in the capping.

  Sir Paul Beresford: I am aware of that, but I was asking him . . .

  Q51  Mr Betts: You say that the Department should have an overview. We have been told that the Audit Commission audit looks at these things, but what is the process? Is it a formal audit or is it a brief skip through what authorities are saying to ensure that they are broadly doing something?

  Mr Housden: I do not know precisely what the process is for looking at the totality of local government savings, but, again, I am very happy to let you have a note of that.

  Q52  Anne Main: There are two things. On your asset management agenda it says: "Maintain ODPM's asset base in condition necessary to meet objectives": can you tell me if that is a spending commitment, and, if so, how will we know how much it is? The other one is, "ensure assets are retained in the public sector only where it is effective and including strategies for disposing of assets". Will there be some kind of map or list of assets that will be looked at in order to be disposed of, and where will they be based? There are two things: one, on the assets that will be maintained in condition—is it a spending commitment, and, if so, how much, and which ones; and, two, which ones would you be looking at for disposal, and would people know about them and so on? Where would the money go from disposed assets when they were disposed of?

  Mr Housden: The first point is that it is not a spending commitment because it relates to the specific assets of particular policies and circumstances that relate to it. This is a commitment to keep those issues under review to make sure we make the best use of public money.

  Q53  Anne Main: I am sorry, but I am no wiser—"specific assets" and "specific things"—which ones and how? Will we have a list?

  Mr Housden: There is an asset register for ODPM, and those two points that you drew out are part of the way in which we decide the principles that we apply in ensuring that we continue to get maximum value out of those assets.

  Q54  Anne Main: Will there be a list of ones up for disposal? Will there be a list of ones which will be maintained in condition, and will those be spending commitments that we can look at as a balance?

  Mr Housden: They are not spending commitments, but it is an acceptance of the responsibility that where ODPM maintains public assets, they should be in appropriate condition. Secondly, when those assets in the delivery of the service would be better located outside the public sector, then we would look at that. It is very much on a case-by-case basis. There is not a list of assets to be disposed of.

  Q55  Anne Main: You are getting a strategy for disposal of assets, so if somebody is developing a strategy you must be looking at your asset base and deciding which ones can or cannot stay or go, and what happens to them when they are disposed of. Does the money come back in? Somebody has developed this strategy for asset disposal, so I would like to know more about it.

  Mr Housden: Let me give you a further note on that.

  Q56  Mr Lancaster: Would you regard English Partnership assets as ODPM assets?

  Mr Housden: They are a partner body of ODPM.

  Q57  Mr Lancaster: Here, it says, "actively explore the scope of securing greater value from assets including through . . . " You talked about not having specific examples. Can I give you a specific example of where there is a school that wanted to expand its sixth form and a chunk of land that was owned by English Partnerships was then revalued by English Partnerships at residential values, and the value went from some £13,000 to £249,000. Is that the sort of thing that you mean by different techniques to extract maximum value of assets? Do you think that is a positive use of assets?

  Mr Housden: It is difficult to comment on the specific case.

  Q58  Mr Lancaster: I use it as an example.

  Mr Housden: English Partnerships will be under a legal duty to make maximum value from public assets, so it is difficult to comment on.

  Q59  Mr Lancaster: But there you see the trade-off between expanding a school as opposed to building houses, and preference is given to building houses rather than expanding the school. You can see the potential problem that that creates.

  Mr Housden: Indeed, and there is important work, for example, going on—successful work—to enable English Partnerships to exploit redundant hospital sites. An important deal was struck with the Department of Health around that. This is about the effective use of recycling publicly-owned land and assets as a very important part of English Partnership's business.