Official Report (Hansard)
Date: 11 March 2009
COMMITTEE FOR FINANCE AND PERSONNEL
Scrutiny of Performance and Efficiency Delivery Unit
11 March 2009
Members present for all or part of the proceedings:
Mr Mitchel McLaughlin (Chairperson)
Mr Simon Hamilton (Deputy Chairperson)
Dr Stephen Farry
Mr Fra McCann
Mr David McNarry
Mr Adrian McQuillan
Mr Declan O’Loan
Ms Dawn Purvis
Mr Peter Weir
Mr Richard Pengelly - Department of Finance and Personnel
The Chairperson (Mr McLaughlin):
We move to the scrutiny of the performance and efficiency delivery unit (PEDU). I refer members to the Department’s briefing paper. Mr Pengelly will make some introductory remarks.
Mr Richard Pengelly (Department of Finance and Personnel):
I will not say very much, Chairperson. The work that PEDU has done can be divided into a couple of main areas. A formal delivery review of planning has been undertaken, which we touched on earlier. The development of a performance management framework in partnership with OFMDFM is also very important. In many earlier sessions, we have talked a great deal about the focus on a strategic cross-cutting Programme for Government with public service agreements. Our view is that the targets that are embedded in the Programme for Government require a mechanism to hold Departments and their Ministers to account for their performance against those targets.
That is not just about accountability; it is also a key mechanism by which to drive performance. If Ministers, officials and Departments know that they will be subject to some tough conversations with the First Minister and the deputy First Minister, that creates an incentive. Incentives on Ministers tend to flow rapidly through the Civil Service.
That framework had not been agreed by the Executive. In its absence, PEDU undertook some light-touch work to look at progress against PSAs. I am happy to say that at their meeting on 5 March, the Executive signed off on the performance-management framework. We will now try to add some teeth to the detailed logistics of that work in order to try to bring it back. In general terms, we envisage a system whereby there will be some form of regular accountability meetings at which we will get updates, take a specific look at PSA and PFG goals and commitments, look at progress and have some sort of dialogue at ministerial level about the rationale and understanding for that.
Those are the two main elements. I know that another element will be of particular interest to the Committee. Last night, Minister Dodds issued a press release in which he announced that there will be a PEDU review of Land and Property Services (LPS) to look at capacity issues. Work has started on the detailed logistics of that during the past few days. We are still working with the Minister to agree formally and finalise the detailed terms of reference of the report. I am sure that the Minister will want to share that with the Committee. Those terms of reference are not finalised yet, although, hopefully, they will be in the next couple of days.
Therefore, in its own way, that work with LPS is a type of pilot. Will it be informed by last week’s endorsement of the project-management framework?
We want to look at the nature of the work in LPS to gain an understanding of the challenges and issues that it faces. In many ways, we want to look at the organisation’s capacity — as regards its people, resources, skills and infrastructure — to deliver the objectives and targets that the Minister and, indeed, the Executive have placed on the agency. Our work is focused on capacity-type issues.
Yes, although it will not be the light-touch review that you mentioned. It will have a different context.
No. We have established a team that is based in LPS. It will be there for eight weeks with a view to report back to the Minister in early May. That is the end point. It will be a full-time piece of work.
That is a welcome announcement.
I certainly welcome the LPS review and the performance management framework. Until now, PEDU went into an organisation, did a specific task, and left. However, as you will know, Richard, the Prime Minister’s delivery unit had success from its ongoing process of review and constant scrutiny of delivery of targets. Unless there is that scrutiny, the level of delivery that is required will not be achieved. Efficiencies will not be achieved either. There is always concern that if a Department or part of a Department sees PEDU coming in, doing its work, then going out the door and producing its report, that will be it — it will not come back again. The fear factor, which is important, will be gone. It is quite useful to have an ongoing process.
You mentioned that you have a team in LPS at present. What are your resources in respect of PEDU? I was aware from previous conversations that you would establish a team, but that it would not be huge. What sort of numbers do you have? Have you drawn in people who have particular specialisms from elsewhere to do specific jobs, who will then return to their previous posts? What is your current system for managing resources?
As regards PEDU, four full-time staff, besides me, are dedicated to the unit. The nature of the specific LPS review is slightly different to that of any work that we have done before because it focuses on capacity and strategic issues. We have, therefore, brought an external person in to lead that piece of work who has previously worked in the Home Office’s police standards unit. He worked directly in the Prime Minister’s delivery unit. I suspect that he may be known to some members. He worked on the review of the Assembly Secretariat, which was a similar type of review because it looked at strategic capacity to manage and deliver organisational objectives. Therefore, there are five people on the team.
In addition, we have two colleagues on full-time secondment from LPS to contribute to the work, because we want to achieve buy-in and a sense of ownership. Therefore, in effect, the team consists of seven people who work full time on this particular study. There was a similar situation as regards our work on Planning Service; we had two full-time members of Planning Service staff to work on the study. That is our normal approach.
I realise that it is not part of your actual team, but there is also a ministerial advisory panel. Has it been meeting? Has it made any suggestions about the type of work that the unit should be engaging in?
We have regular discussions with the advisory panel, which comprises Frank Cushnahan and Dennis Licence. We have some dialogue with them. What we are doing with the LPS work — and this is an area that we have to work on — is to try to formalise the role of the advisory panel and to have a regular stocktake meeting with it. The Planning Service project was a new type of work; we were thrown into it with an eight-week timetable in which to complete it. With the benefit of hindsight, one of the issues that we could have handled better was our engagement with the advisory panel in order to get some external perspective.
Given the nature of the Planning Service work, I do not think that either of the individuals on the panel would have any concerns or issues about the work that we completed. They did have a legitimate concern in that they would have liked to have been a bit more closely involved in it.
The two panel members met our Minister and had a good discussion about our strategic approach, the direction in which the unit is going and the work on the LPS. We are working on that engagement and getting better at it as we go forward.
Just to clarify a point, PEDU is not allowed simply to say that it will examine a Department; that must be agreed with the Minister of that Department. That poses a problem. Maybe you can answer my question in the context of the performance management framework and how that might allow the unit to be more widely involved.
The two pieces of work that have been done so far were done at the invitation of the relevant Ministers, who asked you to examine a particular issue. However, there has been, for example, recent controversy about efficiencies in the Health Service — I will stay away from the politics — and about the trusts identifying efficiency savings that many people would identify as cuts. There is a difficulty in distinguishing between efficient operational management and simply cutting front-line services. You require the invitation of a Minister to examine such issues and identify efficiencies other than those that have been proposed. You cannot just walk in and do that. Will the performance management framework resolve that, or will it look specifically at targets?
PEDU has no legislative basis. It builds very much on our experience and on discussion that we have had with people such as Sir Michael Barber on the way in which the Prime Minister’s delivery unit worked. Having worked previously in the Northern Ireland Audit Office, I am particularly keen to ensure that there is clear air between our respective roles. PEDU is fundamentally about helping organisations to deliver the targets and objectives that have been imposed on them by the Executive. It is not a matter of doing a cold-blooded critique of their performance and reporting and subsequently criticising them. The Audit Office does that very well, and we do not need to try to replicate what it does. That is why we are very keen on partnership working. We work with organisations. That is why the model for PEDU will not involve it producing reports.
The conclusion of our work on the Planning Service was that we made recommendations, and Planning Service responded by producing a detailed action plan on how it would fix its problems. Planning Service has taken that plan away and owns it; we do not own it, nor have we published it. It is all about partnership working, and it is fundamentally important that we work with the Departments.
The performance management framework that has been agreed by the Executive does not specifically mention PEDU. That will be an issue as we develop our methodology. Speaking personally, because the Executive have not got to this level of detail, I would like to see some sort of accountability meeting at which the First Minister and deputy First Minister and, maybe, the Finance Minister would sit across the table from another Minister to discuss a particular PSA target.
Where performance is not rising to the expected level, the debate and dialogue should be about understanding why that has happened, and what the Department’s plans are to address and fix that. Maybe that meeting would result in some sort of agreement between the four Ministers that PEDU, as an intervention tool, could sit with the Minister in question and help his or her Department to achieve its target. It is not about holding Departments to account: it is about working together to achieve a shared objective. The partnership approach is of fundamental importance to that.
I agree; that is ideally how you would want to see things moving, but I can understand equally how, in the system that we have, that would not be as easy to achieve as it would be in Whitehall, for example, where an all-powerful Prime Minister dictates such matters. There has to be a partnership approach here.
It is more difficult, but from the work that we did with the Planning Service, the one thing that I took great heart from was that our Minister and Sammy Wilson met, and they were very pleased and impressed with the piece of work that had been delivered to them.
A couple of weeks after that, I happened to be at the regular meeting of permanent secretaries to give an update on the work of PEDU. The permanent secretary of DOE told his contemporaries that it was a tough examination and that his Department had been asked some very difficult and probing questions, which, in many ways, was painful. However, he also said that he would whole-heartedly and unreservedly recommend that every Department goes through that process, because DOE had definitely achieved better transparency in what it was trying to do and how it thought that it would get there.
That sort of endorsement is welcome, and I think that we need to build up a track-record of credibility and of helping Departments to achieve their targets, rather than critiquing and making life difficult for them.
Hopefully, that confidence will develop over time. I used the example of health efficiencies, and no doubt there are others, but it is useful to see the unit, not as a threat, but as an assistant, and to keep the politics out of it. At the end of the day, delivery of efficiencies is important to all of us.
As regards the point that you make about efficiencies, I was working through some papers yesterday. As you know, we are looking at reviewing the generic Budget process. One of the issues that has come from that is that where Departments are required to deliver efficiencies, we can try to get some better, earlier sight of their proposals as to how they might deliver them and get a more meaningful dialogue between that Department and both its Assembly Committee and the wider Assembly. That may be a stronger way to address the efficiency issue, rather than having an ad hoc unit speak to the Assembly. That piece of work will be coming before the Committee in the near future.
Thank you. I am sorry for hogging the Committee’s time.
Your past in the Audit Office is all coming out today, Richard.
I will focus on the PSAs, and I will bring the Audit Office into that. The report stresses the analysis and the assistance that PEDU is providing to the Departments. It is very much about looking at the existing PSAs, and trying to identify the areas in which performance may fall short of what was anticipated. Can we take that a step further and ask you what consideration you have given to the recent Audit Office report, ‘Public Service Agreements: Measuring Performance’, in which concern has been voiced about such issues as the accuracy of baselines, and the clarity of what the PSAs are asking for — is that something that you will consider? Who will take up the concerns that have been raised by your former boss, the Comptroller and Auditor General?
In our update to the Committee, we mentioned that our Minister wrote to his Executive colleagues on 7 January. In the absence of formal Executive agreement of the performance management framework, we wanted to do some work on measuring progress against PSAs. However, given that the PSAs that we are currently working to were only enforced from 1 April 2008 — because 2008-09 was the first year of that — our first intervention looked at the position around October/November.
Rather than focus on performance against the PSAs, which are six months into what are, in some cases, five- and six-year targets, and given the normal time lags in getting data, we thought that a better approach was to look at how they are planning to deliver: to look at their delivery framework and baseline data. As our Minister’s correspondence pointed out, we found the same issues that the Audit Office found: there was lack of clarity about what the baseline position was and what measures Departments needed to focus on to understand whether they were moving in the right direction.
Our Minister wrote to his colleagues in the Executive, outlining those generic issues. The DFP spending teams are engaged bilaterally with Departments in order to make those points. Hopefully, that issue will now progress to the formal mechanism under which it will be subject to OFMDFM scrutiny and will be given more teeth. DFP continues to support that.
Does DFP intend to work with Departments to clarify PSAs? With the benefit of hindsight, a year after those PSAs were originally drafted, is it time to clarify what they mean and to let others know? I am not sure whether I can recall some of the examples to which the Audit Office report referred, but concerns were raised about definitions, or the lack of them, and what was actually meant.
The answer to that question is yes, but that is a piece of work that OFMDFM is looking at as part of its mid-year review of the Programme for Government.
That touches on a point made previously. In the current absence of collective Executive agreement to embrace PEDU, I want to be careful that the only thing that PEDU does is look at PSA targets that have been agreed by the Executive. That is because nobody can dispute that there was unanimous agreement on those PSA targets. I do not want to go in and say, “The PSA target said x, but it would be nice if it said y, so let us work on that.” Concentrating on the agreed PSA targets keeps DFP away from any debate about the propriety of that work.
I appreciate your reluctance to open up a wider political debate. I am thinking more of areas in which a lack of clarity about what is meant by something can be corrected with the Departments. An example may be clarifying what is meant by “obesity”. I do not believe that the Department of Health stated clearly what was meant by that; therefore, if a starting point is not known, how can performance in tackling obesity be measured?
That goes back to the establishment of a baseline. We have made the generic point in ministerial correspondence. Spending teams under my control are making that specific point in relation to individual PSAs. That will be one of the key points that will be raised at ministerial level once we get into the formal scrutiny of PSAs. The foundation on which scrutiny must be built is clarity about a baseline position, about what we want to achieve and about the ways in which success will be measured. Dr Farry made a strong point.
This discussion is very interesting. Overall, I am disappointed in PEDU’s progress. I started off as a big fan and approver of the whole idea, because it very much fitted in with public-sector reform, about which I will say more in a moment.
I have a specific question about the advisory panel. I looked again at the statement made by the then Minister of Finance and Personnel, Peter Robinson, who told the Assembly:
“I have already secured the involvement of Sir Michael Barber, Frank Cushnahan and Dennis Licence as members of the ministerial advisory panel.” — [Official Report, Vol 29, No 6, p247, col 2].
There was a clear indication that the advisory panel would grow beyond that. You now seem to refer, essentially, to it having two members, although you later mentioned that Sir Michael Barber had some involvement. However, you indicated that he was not a standing member of the panel, which now seems to consist of only two people. Will you clarify that?
I am sorry. I may have inadvertently misled the Committee on that point. The advisory panel is made up of three individuals. The Minister’s original statement did not convey a definitive intention to grow the panel, but he did not want to rule that out in case a specific area of work required an expert external view that was not represented by those three members. However, there was no intention to expand the panel beyond the three members.
Sir Michael Barber is part and parcel of that panel. I talked about the two members because, in addition to Sir Michael Barber being a member of the ministerial advisory panel, the Department has been doing some work with him that specifically draws on his experience as head of the Prime Minister’s delivery unit. In the course of that work, I have had monthly conference calls with Sir Michael, during which we talk about the Department’s approach and methodology. When I talked about Frank Cushnahan and Dennis Licence, I meant that they had not been as fully involved. I should have made the point that Sir Michael is involved in a monthly dialogue and that we are securing his views and expertise. However, all three people are on the advisory panel.
I am not looking for bureaucracy for the sake of it — far from it. However, judging by his statement, the nature of the panel seems to have altered contrary to the Minister’s original intention. The active group of officials is very small compared to the size of the task of attempting a serious, major initiative in public-sector reform — for that is what is needed.
I am keen on such reform because I feel that there is enormous scope for it. The potential benefits are colossal. It could free up resources, which we could use to help the most needy; facilitate achievement of our strategic objectives; and help to shift spending from consumption to investment, development of infrastructure, skills and people — all the good things that we have been talking about.
I do not see much evidence of that kind of thinking in public-sector reform. Efficiency savings are not viewed in a positive light, and that is not a good attitude. Some efforts at efficiency operate at a very low level. There are across-the-board cuts, which are levelled throughout whole Departments: and it is left to individual managers to deliver them. That is done instead of taking a strategic oversight and — instead of taking a welcoming attitude to efficiencies — people often take a begrudging attitude. Managers implement efficiencies because they are forced to do so, and if they were not forced, they would not do it at all. That is fundamentally wrong.
All the work that you have done is good, including the review of the Planning Service and the light touch — which now is changing to a full review — on the Land and Property Services. I was particularly interested in what you said about the management system and the PSAs. That kind of strategic work is particularly important.
However, I do not think that we see enough strategic work; we do not see enough culture-change throughout the public sector. There is not enough political leadership to facilitate that. The political system often displays resistance in support when managers want to change things. We must take some of the responsibility for failures of the political system when it places obstacles in the way of a very necessary project.
I will steer clear of your comments on political leadership.
With respect to the resourcing of PEDU, I agree that, ultimately, we want and need a bigger unit. My longer-term aspiration is that we will not need this unit forever; we will complete the job and we will all get better at it. My vision for the unit is that we should grow it, so that it will have a set complement, but all those seats will not always be filled. It is important that we bring in people from other Departments and the wider public sector and let them work intensively for eight or 12 weeks on a specific delivery review, learning tips, techniques and best practice about focus on delivery and public-sector reform. They will then return to their home organisation, taking those lessons with them, and they will promulgate them throughout the Department.
The difficulty at the moment is that we did a piece of work on planning, and now we are doing a piece of work on the Land and Property Services. I do not have a ready supply of additional studies. Ideally, I would like to run two, three or four studies in parallel. However, because of the points that we have already discussed, I am still waiting for the flood of invitations and requests for help from other Departments. That does not concern me much at this stage, because if we can deliver two or three good pieces of work that are genuinely accepted by the host organisations as adding value, Departments will begin to open up and invite us in. I have had some discussions with other Departments, and I would like to think that, as time moves on, we will be able to grow the unit and bring in more people.
I have also had some preliminary discussions with some of the local accountancy firms on the basis that, in the future — without any commitment — it might suit us to take from such a firm a secondee who has a particular skill-set that could be brought to bear on our work. I told those firms that I would not expect to pay much, if anything, for that secondment, because the experience would go on the individual’s CV and make him or her more marketable. However, that is the way we work.
The public sector cannot compete with the private-sector salaries.
Not even in the Assembly.
Earlier, you mentioned the review of the Planning Service. Can you update us on that? When can we expect to see changes for the better at the front line?
I will talk you through the logistics first, and then I will address performance.
The piece of work that was completed at the end of November 2008 was time-limited to eight weeks. The chief executive of the Planning Service and I attended the ministerial sign-off meeting. I presented the findings and recommendations from our piece of work, and Cynthia Smith, the chief executive of the Planning Service, responded by presenting an action plan.
In a sense, there were some similarities to the Audit Office process in that we agreed what the issues were and what we would say before the process began. The Planning Service accepted that and developed an action plan on how it would respond to the recommendations. I saw the action plan before the meeting, because I wanted to finish the meeting by informing the two Ministers whether the plan would work from the PEDU perspective. I said that it was a good response, but that there were some areas in which we could probably do a bit more; however, as an initial response, it would get us working towards improving planning.
It was agreed that the two Ministers would meet again around 6 April 2009 to formally review progress and the change in performance. My folk are currently undertaking an interim update report on the Planning Service and evaluating how it is delivering the action plan. The signs are very positive.
As I mentioned earlier, we do not produce reports. The findings were the list of recommendations and the action plan from the Planning Service. My understanding is that the DOE has presented the findings to the Committee for the Environment. We told the DOE that we would not publish the findings, but that we do not mind if it wants to publish them. I did not want the host organisation to think that we would go out and tell tales. That is the agreement. Our Minister is very keen that we do not publish anything, but there has been some scrutiny of the individual findings.
At a generic level, we held a couple of sessions in which we brought rank-and-file staff from the Planning Service into a room and asked them what they thought was wrong and how they thought that those problems could be fixed. We were hugely impressed by the flood of ideas that we received and the commitment that was demonstrated.
At times, the whole strategic management of the organisation in relation to operational delivery could make better use of that enthusiasm and commitment. The clear evidence from the interim report is that that is happening. Not unexpectedly, there has been a slight dip in performance since we held those sessions. I say not unexpectedly because we asked the staff to focus on the complex, long-standing backlog of cases. They are getting rid of those, but, by necessity, they take longer to process.
If the Planning Service makes the progress that it seems to be making on the action plan, I am absolutely convinced that we will start to see real improvement in relation to planning-application times by April or May 2009. The organisation certainly accepts that, and there is no reason at all to doubt it. It was a very good piece of work.
If there is no improvement, will you go back to the Planning Service again?
Absolutely. We will undertake a formal review. I think that, on 6 April, the two Ministers will expect us to tell them about an improvement in performance. If there is no improvement in performance, I suspect that they will invite us to go back to the Planning Service immediately and evaluate ways in which we can build on that action plan. However, I am confident that we will see an improvement.
You said that no report was produced about the Planning Service, but can we expect to see a report on Land and Property Services?
The Minister has not yet agreed PEDU’s terms of reference in relation to what he wants as an output — whether it will be something similar to the Planning Service solution. However, LPS is slightly different because it is a DFP issue, whereas the Planning Service work was done for a different Department. The Minister is considering the terms of reference and the output that he wants at the end of the process.
A report on Land and Property Services would be a good way to show how that work is taking place and what the benefits are. Earlier, you said that there had not been a rush of Ministers knocking down your door. Have there been any invitations at all from any other Departments?
I have had some discussions with the permanent secretary of the Department of Health, Social Services and Public Safety. However, for us to investigate that Department, the permanent secretary would have to clear that with his Minister.
No substantive discussions have taken place on particular areas of concern, although a few permanent secretaries have said that they want to think about useful pieces of work that could be done; they want to have that dialogue at ministerial level. I believe that there is a growing acceptance that PEDU exists to work in their best interests and to help them to do what they do on a daily basis.
I am encouraged by what I hear.
I am not arguing against the voluntary nature of a co-operative approach, but when the Minister announced the establishment of PEDU in April 2008, he said that it would be tasked with identifying efficiencies over and above the efficiency delivery commitments that were made for 2008-2011. Does PEDU’s voluntary and co-operative approach dilute that goal, and if it does not, has PEDU identified any efficiencies over and above the agreed efficiency delivery projections?
PEDU’s starting point was about building collaboration with Departments and gaining wider acceptance. If I were to arrive at a Department’s door, saying that I was there to help it become more efficient, the door would probably be slammed in my face pretty quickly, because —
Your Minister put you in that box, did he not?
I might say, “I am here to help”, but Departments hear, “I am here to cut your budget”. In the early stages, we are working to get a sharp focus on delivery and achieving targets. Improved efficiency will be a natural consequence of that. For example, for the Planning Service to hit its targets, given the resources that it has, it must process applications more quickly. That is a better and more efficient use of resources. Indeed, given the current market conditions and the decline in the number of applications, the Planning Service will require fewer resources. That will free up resources.
At the moment, the efficiency agenda exists as a strong by-product of the work that we are doing on delivery. Efficiency is in our title, so we must look at that. We have not done that specific work. That issue will crystallise in 2010-11, and we are all aware of the Chancellor’s comments in his pre-Budget speech, in November 2008, about requiring £5 billion in additional efficiencies at UK level.
The plans for 2008-2011 will be an issue when Mr Dodds goes to Edinburgh tomorrow to meet the Finance Ministers of Scotland and Wales and the Chief Secretary to the Treasury. Our Minister is very keen to achieve more efficiencies on the basis that those savings will be recycled back into front line services in Northern Ireland, rather than being handed back to the Treasury. That is where PEDU will have a key role; we will try to increase and extend those efficiencies.
Recently, the Committee specifically considered the HR Connect project. It is clear that it is having teething problems connected to performance. We asked the Minister to consider involving PEDU in order to help resolve some of those issues. We recognise that, as with LPS, those were massive projects, and that people were asked to accomplish quite a lot within tight timescales, so it is not unsurprising that issues have arisen. Has any consideration been given to PEDU taking a look at HR Connect? Is that a feasible area of work for PEDU?
The Minister has not yet given any consideration to that matter. My colleagues in the Department, who discussed that issue with the Committee, alerted me to the fact that it had been raised. They are working on some advice for the Minister on that matter. My initial views were that such a review of HR Connect was not necessarily what PEDU was meant to do; it is meant to help Departments to focus on PSA targets. Having said that, the Minister wants to see the sort of improvements that we all aspire to on the matter of HR Connect.
Ultimately, it is for the Minister to play it whatever way he wants. Given that we are all part of the DFP family, he might look at other options. A formal PEDU review may not be necessary; we could move a couple of PEDU staff across to HR Connect in order to shine a spotlight on the matter. A wide range of options is open to the Minister, and we will work with him in whatever he wants to do.
We wrote to you last week to request an update on the result of PEDU’s work to date with the intention that members would be informed for today’s meeting. That request was made at short notice, and I accept that we did not give you much turnaround time. I appreciate the information that you have provided for us today, but will you follow up this discussion with a report that will give us some indication of the future programme and the timescales involved?
The Committee is very supportive of the issue in general, because it will help to roll out the efficiencies and to deliver the public service agreements. It is in all of our interests that that is done in the most collaborative way possible, and the whole process benefits if we provide support for Departments. I would appreciate it if you could give the Committee a follow-up report.
On behalf of the Committee, I thank Richard for his assistance this morning. Good luck.