PUBLIC ADMINISTRATION (ECONOMY) (Hansard, 12 February 1954)

§ Mr. Ronald Russell (Wembley, South)

I am glad to have this opportunity of raising the subject of efficiency in Government Departments, and I must also thank my right hon. Friend the Financial Secretary for coming here this afternoon at very short notice.

This is a wide subject and one of great importance to our future. It is often said that our ability to earn our living as a nation depends on continually raising production. I know that is a problem chiefly for private enterprise, but public authorities—and especially the nationalised industries—do play a considerable part in our productive activities. It has been said that one of the greatest dangers to our export trade is inflation, and I think that nobody will deny that one 1609 of the main causes of inflation is excessive Government expenditure.

I therefore make the plea that constant attention should be given to the question of efficiency in every department of every public authority. We ought to see that every job which needs to be done is looked at very carefully to make sure that it is being done in the best and cheapest way. It should be emphasised that one of the biggest improvements may be obtained by examining our various organisations at the highest level, and I am sure that all would like to congratulate the Government on their amalgamation of some Ministries—the Ministry of Pensions with the Ministry of National Insurance, and the Ministries of Transport and Civil Aviation.

It is probably too early yet to judge the results of those amalgamations, but no complaint seems to have come from the other side of the House, as I am sure there would have been some had there been any to raise. It will be surprising if those two amalgamations do not result in a substantial saving of staff without reduction in the standard of service; in fact, let us hope with an improved service.

The Government have also made one or two improvements on a rather lower level. The Ministries of Labour, Pensions, and National Insurance, and the National Assistance Board are combining some of their small local offices in some of our smaller towns. All these examples suggest that the Government are continually examining their organisations at different levels and in different ways. This must result in some saving of money, and I hope that the Financial Secretary would be able to tell us something more of what is being done in that direction.

I think that the Government are to be congratulated, too, on the reduction in the number of civil servants in the last two years. In October, 1951, there were 685,000 civil servants, and in 1953, 660,000—a reduction of about 3½ per cent. That may not sound very much and probably would not satisfy my hon. Friend the Member for Orpington (Sir W. Smithers). At least, it is progress in the right direction, although, admittedly, some of this reduction must have been due to the removal of unnecessary restrictions and controls, a subject 1610 which I shall not touch on today because it would rather confuse the issue.

It clearly shows that the Government are keeping their eyes on the possibility of making minor as well as major improvements. One thing is abundantly clear and that is that my right hon. Friend practises, at home, the doctrine which he preaches in this House and elsewhere namely, economy in the Treasury Estimates themselves, which were reduced by about £75,000 in the Estimates for this year, compared with those for last year. Let us hope that this reduction will continue, without impairing in any way the Treasury's watch over economy and efficiency in other Government Departments.

Then there is the question of local government. The experiment of the very go-ahead Coventry Corporation has received a good deal of publicity in the Press. It may not be quite so widely known that many other local authorities, large and small, have employed staff on setting up organisation and methods divisions. For instance, the London metropolitan boroughs have combined to appoint an organisation and methods team, which has done valuable service to the 28 individual London boroughs.

Neither the Ministers in the Treasury nor those in the Ministry of Housing and Local Government would wish to say anything which might be taken to be interfering with the independence of local government, and I was glad to see the encouragement given to local authorities—by recent answers to Questions—to study the Coventry experiment. I hope that the recommendation that local authorities should continue to form organisation and methods teams will be speedily adopted all over the country, especially in view of the great anxiety which is felt at the rise in rates which is taking place almost everywhere.

The Coventry experiment was concerned mainly with the administrative side, but there is a much wider field than this. Undertakings such as municipal transport systems may also provide a field for experiment of this kind. Then there is the National Health Service, especially the hospital service, which is costing, at the moment, £ 270 million per annum of the taxpayers' money. We should all agree from our own knowledge that 1611 hospitals show a varying degree of efficiency—I do not mean with regard to the standard of equipment or medical skill, but in regard to their management. If all hospitals could be brought up to the level of the best there would be a substantial saving of Government expenditure. Small improvements added together would make a considerable total, and I hope that the Government will give consideration to this matter.

Then there are the nationalised industries. I do not want to say too much about them, because we had a debate on the subject early this week, but they should be absolutely unremitting in their efforts to improve efficiency and economy in administration and productivity. There is a story of a bright person who was supposed to have saved a certain railway many thousands of pounds by suggesting that the carriages should be labelled "G.W." instead of "G.W.R."— or it may have been "L.N.W." instead of "L.N.W.R."; I do not know which.

That story reminds me that, even today, there could be a saving in the same field. When one goes to Victoria Station the first thing one sees, outside, is a large notice which says "British Railways: Victoria Station." Inside the station one finds that the tender of every engine, and every coach, has a panel on each side which bears the words "British Railways" and a crest. There are also many thousands of notice boards scattered about railway stations, bearing, at the top, the words, "British Railways." I do not say that they are all hand-painted, but they have to be produced in some way or another, and as it is fairly obvious that our railways are British railways and not any other country's, we could surely dispense with those words and be content with "B.R." Perhaps that could be looked into by British Railways.

There must be many other examples of similar and other kinds in nationalised industries, which could be looked into and which might give plenty of scope for saving and economy. I hope that the Government will continue their present policy of being ever more watchful of public expenditure and of making economies whenever possible.

§ The Financial Secretary to the Treasury (Mr. John Boyd-Carpenter)

As my hon. Friend the Member for Wembley, South (Mr. Russell) said, this is both an enormous and an enormously important subject, and it is one which, as he and the House will appreciate, is difficult to treat adequately during the time at one's disposal in a half hour Adjournment debate. I fully share my hon. Friend's desire that there should be the utmost efficiency and economy in all forms of public expenditure. That has always been important, but perhaps never more important than in these days, when the Government play so large a part in the lives of the community and spend so large a proportion of the community's money.

There are two main ways in which efficient and economical administration can be sought. One is by changes in policy which result in it being possible to govern less; changes in policy, that is to say, which reduce the functions of Government. I do not propose, except indirectly and obliquely, to deal with that aspect of the matter, partly because it raises such large issues, and partly because I imagine that most of such changes would involve legislation, and so would not be in order in debate now.

The essence of my hon. Friend's clear, helpful and interesting speech, was the emphasis that he put on the second side of the matter; that is, given roughly the present level of Governmental activity, how so to organise that activity as to secure its being carried on in the most efficient and economical way. There are one or two things on that aspect which I would like to say, and I start by fully endorsing my hon. Friend's objectives and adding that we do seek to the best of our ability to secure those aims. We seek to secure them in a variety of ways.

My hon. Friend, for example, mentioned the merger of certain Departments of State. The merger, for instance, of the Ministry of Transport and the Ministry of Civil Aviation has already resulted in a saving of some 40 posts, and it may be possible to make some more. That is one example taken out of many of how a reorganisation of the system of Government does achieve some 1613 economies. Such changes are reflected, as my hon. Friend has indicated, in the reduction it has been possible to make in the total numbers employed in the Civil Service.

My hon. Friend quoted the figures of the reductions so far published since 1952. A quarterly White Paper is laid setting out the size of Departmental staffs. If one takes the latest one, that published in October last, one sees shown a reduction of some 28,000 since 1st January, 1952. The White Paper which will embody the figures as at 1st January, 1954, is not quite ready, but I can tell the House with safety that it will show a further reduction during the last quarter of some 3,000, making with the 28,000 about 31,000 since 1st January, 1952.

Expressed as a percentage of the total Service that, if my mathematics are right, works out as a reduction of 4.5 per cent., but I do not know really whether that percentage gives an adequate representation of the reductions that have been achieved. In the total from which this figure is calculated, roughly half the figure of Civil Service staffs consists of Post Office staffs, and, as the hon. Member for Walthamstow, East (Mr. Wallace), who is on the Front Bench opposite, will agree, they are in a somewhat different position in that the Post Office is perhaps the oldest of our nationalised industries.

These people are engaged in an activity more equivalent in many ways to an industrial service than strictly to the business of government. Reductions in Post Office staffs are perhaps quite a different matter from reductions in Governmental staffs in the strict sense, and if we exclude them we find that the reduction in the numbers engaged in the business of central Government works out at very nearly 10 per cent. since 1st January, 1952. In the trade and industry group of Departments the percentage is appreciably higher.

It is, of course, relatively easy to save quite a considerable number of staff when a big block of work goes, such, for example, as the abolition of identity cards, certain forms of Governmental trading or certain systems of rationing; but many of the savings which have been made in the public service during the last 1614 two years have been made not merely in that way but also by administrative savings—that is to say, prunings in one direction or another and reorganisations of work. These are the savings which are achieved only by a great deal of hard, applied work.

Although it falls to a representative of Her Majesty's Treasury to present these figures to the House, I should not like to give the impression that the Treasury seeks to claim all the credit for the results so far achieved. There has been a great concerted effort by all Departments, and I want to pay tribute to my right hon. Friends and their advisers for the efforts which they have made in this direction. I would go further and say that the effort has been made right down the line to the most junior members of the staff, and pay tribute to the efforts of the staff at all levels for the successful exertions which they have made in the direction of streamlining and making more efficient and more economical the vast Governmental machine.

In this connection, it might be convenient for me to mention and pay tribute to what are known in the Service as staff suggestion schemes. These schemes are roughly equivalent to those adopted by some progressive industrial firms in which the staff themselves is encouraged to put forward any ideas they may have for improving efficiency. I understand that in many Departments these schemes have produced excellent ideas, some of which it has been possible to adopt and all of which have been most helpful in their intention and in the ideas embodied in them.

My hon. Friend referred to another aspect of this work, which, as he said, has attracted—and very properly attracted—considerable attention in the Press and elsewhere; and that is the activities of the Organisations and Methods Division of the Treasury. Considerable attention has been attracted by what my hon. Friend described as the Coventry experiment. I should make it clear that the Treasury Organisation and Methods Division was concerned in the affairs of Coventry only at the express invitation and request of that city. It is, of course, the fact, as my hon. Friend said, that the organisation and affairs of local authorities are entirely their responsibility and concern, and our rôle in this context is 1615 simply that, having been asked to provide advice and assistance, we were very glad to be able to do so.

Although it is not the first occasion on which I have done so, I should like to pay tribute to the Coventry Corporation for their enterprise in having suggested that we might be able to help them in this way and to express the hope that the recommendations which the Treasury Organisation and Methods Division was able to make may be of assistance to the city in achieving the economies in administration which it has shown that it desires to make. The recommendations, of course, are in themselves confidential to the city corporation which asked for them. But they have in fact become pretty well known, and I was glad to see that the city corporation is seeing its way to accepting, as I understand it, the great body of them.

The matter has attracted almost embarrassing kindly attention inasmuch as the attention which has been focused on this has exposed us to many demands for assistance of a similar nature, bigger demands, I am afraid, than either staff or staff time will permit us fully to meet. It is a fact that much as we desire to help organisations throughout the sphere of public administration, there is, I say frankly, a limit, and a limit which is very easily reached, to the amount of trained manpower that we have available for this purpose.

Indeed, I have suggested to one or two organisations and authorities who have been good enough to approach us on the matter that perhaps the method most economical in staff which we could adopt for giving assistance in this way is by rendering assistance to groups of authorities in the forming and training of their own organisation and methods divisions. There is a very good example of this in the Metropolitan boroughs, which have been applying a system of that kind.

I should perhaps say a word about how the Organisation and Methods Division itself works. Its first duty is concerned with promoting in every possible way efficiency in the Government service. The central body so concerned is, of course, the O. and M. Division of the Treasury itself which, on an advisory basis, serves some 50-odd Government Departments. Some of the major Departments of the 1616 Government also have their own organisation and methods units with which the Treasury O. and M. Division keeps in close touch.

In addition there are certain fields of common services, such as office machinery, where Treasury advice is generally taken throughout the Service. We also act as a common information centre and publish in co-operation with the Departmental O. and M. officers monthly O. and M. bulletins. Perhaps the most important function of all is training on behalf of the whole Government organisation and methods service.

The main job of the organisation and methods service is a continuing one. It is a job which continues and is never finished. With the assistance of the O. and M. service of the Treasury, full-scale reviews of the great majority of Government Departments have in fact taken place over the past few years. I would in this context pay tribute to the businessmen who have in some cases provided independent and authoritative opinions as members of the review committees. Some of the reviews take months, some take years to complete, some are being completed, but it is not a once-for-all job.

The plan is that, after a reasonable interval, after one review of, say, five years, another starts. We have already started a second systematic review in the case of several Departments and we intend to go ahead with others. Methods will be continually improved and new methods will be applied to new circumstances. Organisation is never a static thing and it would be a great mistake to suppose that we shall ever reach finality in this process of investigation and review. In addition to the services I have mentioned our men are always available to any division or department that asks for them to deal specifically with any particular problem that may arise. This also is a very valuable aspect of the work that is done.

I noticed that my hon. Friend, going a little outside the central machinery of government, referred to the possibility of savings in the Health Service. I am sure that my right hon. Friend the Minister of Health will give these suggestions all the consideration which they deserve, but, as my hon. Friend will appreciate, it is 1617 not a matter which I can, or should, answer.

I hope I will not have left the impression on hon. Members that the Government are complacent on this subject or believe that no improvement is possible, or that O. and M. can provide a complete answer to everything and to all problems of organisation, machinery and the rest. Of course, we are under no such impression. We believe that the idea which organisation and methods has established is a good one, and that some such organisation is, and should be, a permanent and valuable part of the Government machine. We are convinced that it has done a modest but useful job, both during and since the war, in tightening up the efficiency of the Government machine. We think there will be a continuing need for it.

The staff required are people of very special qualities, and this, apart from anything else, limits their numbers. It would be improper for me at this Box to refer to names, although those experienced in this matter will recall several very distinguished public servants who have rendered great service in this connection. I should like to say myself, and I know that the Departments they have served will agree, how very much Government and good government in this country owes to public servants who have done this pioneer work of such value in this division.

1618 I am well aware that in the limited time which my hon. Friend and I have had at our disposal we can cover but a corner of this matter, but I hope I have said enough to indicate the great and continuing concern of the Government that Government machinery, vast, complicated and expensive as it is, should be constantly reviewed with a view to maintaining the greatest possible efficiency and economy in numbers and in cost. We seek to do this partly by policies which make the task of Government actually less but also, as we have been discussing this afternoon, by the other method of continual review, continual improvement and the application of the latest and most progressive techniques of public administration.

I hope I have made clear our continuing concern in the matter and the fact that we are always only too glad, whether from my hon. Friend, with his experience, or from other hon. Members, to have advice and suggestions as to what can be done to carry on with a job which continues to be important and the very importance of which means that it will never be completed.