MR LEIGH LEWIS CB AND MR TERRY MORAN

15 MARCH 2007

  Q240 Mr Prentice: That is great. How many people are employed in the department? I see in 2004 it was 120,000. What is the number now?

  Mr Lewis: We have dropped. We are, in full-time equivalent terms, around 110,000. We have dropped by around 22,000 over the last two to two and a half years.

  Q241  Mr Prentice: One hundred and ten thousand, you say?

  Mr Lewis: Full-time equivalents.

  Q242  Mr Prentice: How many more people have you got to get rid of?

  Mr Lewis: The headcount reduction target from the SRO4[8] settlement is 30,000 full-time equivalents. We are almost at 22,000, so just over 8,000 in the SRO4 period.

  Q243 Mr Prentice: Remind me: when have you got to get rid of the other seven and a half thousand?

  Mr Lewis: The period comes to an end at the end of 2007-08.

  Q244  Mr Prentice: So at the end of this year.

  Mr Lewis: Well, literally. We have not quite started it yet, but at the end of 2007/2008; so by March 2008 we have to have achieved that 30,000 reduction.

  Q245  Mr Prentice: And you are confident you are going to be able to do that?

  Mr Lewis: Yes, we are. It is absolutely not easy, but, yes, we are confident that we will do that.

  Q246  Mr Prentice: What is turnover like in the department? You give the impression you are a happy band of brothers and sisters. What is the turnover?

  Mr Lewis: In most of our businesses it is around 5 to 6 %, but there is obvious variation by geography, by type of role, et cetera, et cetera, and, again, I do not want in any sense to pretend here that everything is wonderful. Does every member of our staff whistle on their way to work, if you see what I mean? No, of course not.

  Q247  Mr Prentice: Do you?

  Mr Lewis: No, I do not think I do, but I smile most days on my way to work. We still have staff who, in terms of the absolute scores of what they tell us, are not anything like as engaged with the department and believing that they are valued by the department as we, the top team, and I, the permanent secretary, would want. It is improving, but in terms of absolute levels of employee engagement, no, we are not at the place we would want to be. I just want to be clear about that.

  Q248  Mr Prentice: In your memorandum you talk about contestability of services and that contestability can lead to improved customer service. You go on to quote Jobcentre Plus, and, of course, we have met some of the Jobcentre Plus people. What analysis have you done of complaints that come from private sector providers, organisations that are doing the jobs now that used to be done by civil servants?

  Mr Lewis: Where we have gone for a mixed economy, for example, in our employment zones, we have done considerable evaluation both in terms of service and also, of course, in terms of the outcomes achieved in terms of how people fare by way of gaining job entries compared with the previous provision. Overwhelmingly I think we are learning that there is room for a mixed economy, that the private and the voluntary sectors, it is not just the private sector, can bring innovation, they can bring new ways of delivery, they can bring interesting challenges.

  Q249  Mr Prentice: Are there complaints to the voluntary sector providers and the private sector providers in a different category to complaints that go to the public sector?

  Mr Lewis: I do not in any way want to mislead the Committee. I just do not have in my head whether there is a different—

  Q250  Mr Prentice: Can we have that information, because given that Government policy is to bring in the private sector across the piece, we need to have that information?

  Mr Lewis: I will certainly write to the Committee and try and give you any information we have on that.[9]

  Chairman: That would be helpful. Thank you very much.

  Q251  Mr Prentice: Can you tell us a bit more about the functions that are currently provided by DWP that are going to be floated off to the private sector and the not-for-profit sector?

  Mr Lewis: No, not in that simple sense, because there is no sort of master plan sitting in the department which suggests that this should stay and that should go. I go back to the test that I think I apply and I sense that the Government and ministers wish to apply as well, and that is what means of service delivery will actually deliver the best outcomes for our customers.

  Q252  Mr Prentice: I understand that, but it has got to be more than suck it and see. You have told us that you run an enormously complex organisation, we know that the function of people providing help for those with disabilities in Jobcentre Plus is going to go to the private or voluntary sectors; you must be able to tell the Committee what the thinking is in the department about other areas that could profitably be handed over to the private or not-for-profit sector. You must be able to tell us that.

  Mr Lewis: I do not think there is a single departmental view and, moreover, this is a matter on which the Government of the day has the absolute right to make choices. We have only very recently—you have probably seen it and maybe had a chance to look at it—had a report done for Government. This is not Government policy, but it is a report done for Government by David Freud about the future provision of services for those who are furthest away from the labour market. David Freud has put forward a view that what he saw at Jobcentre Plus greatly impressed him, and he said that in terms, and he sees it as providing a very high quality and effective service to its core market. He has proposed that, in terms of those hardest to help, those who, for example, have been with Jobcentre Plus on their books for a year or more, he would like to see the private and voluntary sectors take on responsibility for intensive support to that group.

  Mr Prentice: I understand that. I raised the issue of the Freud Report over there with the Work and Pensions Secretary, and I asked him the same question that I asked you, and he said that no decisions had been taken. I am just astonished that there has not been more systematic thought in the department, but I do not want to labour the point.

  Q253  Chairman: The Government Strategy Review cites Australia as a sort of model of where employment services have been successfully done by the private sector. It is talking about implicitly moving in that direction, is it not?

  Mr Lewis: David Freud's Review, actually, refers to the Australian experience and says that in his judgment—I merely put that judgment before the Committee—that there are plusses and minuses in that experience, but actually the Australian experience is sometimes, I think, slightly misquoted. I do not regard myself as an expert on the Australian experience, but the Australian experience still has a very large front end, which is called Centre Link, which is publicly owned, behind which there is a group of private and, very much in Australia, voluntary sector providers, if you see what I mean. I do not hold myself out as an expert to be able to give the Committee a view on the success of that or not.

  Q254  Mr Prentice: Very briefly, you tell us that you buy IT functions in from the private sector, the premises are owned by Trillium and you rent them off Trillium. What happened to file stores? I have a huge file store in my constituency, and I think the attendance allowance files for the entire country is absolutely amazing, but the contract was awarded to Iron Mountain, I think, a few years ago. My question to you is this. Have you got any figures about the number of files that have gone missing and how does that compare with the situation that applied before when the files stores were run by civil servants?

  Mr Lewis: I can only apologise, but I most certainly have not got those figures in my head. Probably you did not quite expect me to have them in my head, but I most certainly will write to you and let you know if I have any information on that. [10]

  Chairman: That will be helpful.

  Q255  Mr Walker: Following up on one of Gordon's questions, you said your staff turnover is about 5 % or 6 % a year. Could you write to the Committee confirming that, because that would mean that your average staff tenure is 18-20 years against a national average of about six or seven? It would be interesting to know how you achieve that?

  Mr Lewis: Yes. [11]

  Q256  Chairman: It will be a long letter to us, but very useful. Can I come to the end? We have kept you a long time. Is the Independent Case Examiner model one that you think should be extended across government as a whole? If it is good enough for one department, why is it not good enough otherwise?

  Mr Lewis: That is an interesting question. I do not want to be presumptuous enough to suggest what might be right for other departments whose businesses may be very different in terms of what they are seeking to deliver and structure. I know, for example, you have taken evidence from my colleague in HMRC, Paul Gray, but I would not want to say, no, this has to be the right model for another department or agency. I do very definitely think, otherwise we would not have decided to go down this route, that it is the right model for us.

  Q257  Chairman: Finally, the ombudsman said to us once in an evidence session, and I have not got the words right but this is the essence of it—do you remember the Citizen's Charter—that she thought it was a good thing and she could not understand why we had taken our eye off that particular ball because that was setting service standards. You have announced in a sense what you are going to do on the service side, but that was actually telling the users of your services what standards they could expect and giving some kind of guarantee. Why did we take our eye off that ball?

  Mr Lewis: There is a major review of the Citizen's Charter underway at the moment, so I kind of think we are awaiting the response to that. I do think that the Citizen's Charter initially had some real value. I think the risk with any of these things is that over time, however—Terry Moran referred to wallpaper at some point—they become a piece of the wallpaper and if they go on for too long in a stereotyped way they cease to become a motivator. So, I think it is a good time to be looking at the Citizen's Charter scheme. It is a long time since it was introduced.

  Mr Moran: If I may, Chairman, it is worth adding that each of the agencies of the department have commitments about service standards that are enshrined in their own leaflets of their business, so we commit to timescales and things like that. The fact that it may not be under a charter banner does not necessarily mean we have lost our way on it.

  Q258  Chairman: But it is the perspective. Those are managerial commitments that you are making to service. The point about the Citizen's Charter was that it was a set of entitlements that were given to the users of the service. That is the difference of angle on this, and that is why I raise it.

  Mr Moran: I understand that.

  Q259  Chairman: We have had a really interesting session. I can see why the ombudsman wanted us to talk to you, because it is clear that you are taking this whole area seriously. You have come from a place that you did not want to be and you are moving in clearly the right direction, and so I think on a number of fronts it has been very useful to talk to you, and it is good to know that you sleep well and smile on the way to work! Thank you very much indeed.

  Mr Lewis: It has been a pleasure to appear before the Committee.

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