TREASURY CONTROL OF ESTAB LISHMENTS (ESTIMATES COM MITTEE REPORTS)

HC Deb 23 February 1965 vol 707 cc243-96

4.6 p.m.

Sir Eric Errington (Aldershot)

I beg to move, That this House takes note of the Fifth Report and of the Ninth Special Report from the Estimates Committee in the last Session of the last Parliament relating to Treasury Control of Establishments. I think that the fact that the Estimates Committee has an opportunity to deal with these matters in the full House is of very considerable advantage, because the debate can take place after a lapse of some months and some of the recommendations can be dealt with as a result of experience during that period. This Report, together with the Special Report, is, on the whole, a very satisfactory subject, but it is quite clear that, as the result of it, there are from time to time matters for consideration on the basis of differences of emphasis, which are nearly as important as differences of principle.

May I mention one of the matters which is a matter of pleasure, I am sure, to everybody on the Estimates Committee? That is that the Report was published in May and the replies to that Report were published in July. There have been prior occasions on which the replies had been delayed for over a year. It is very satisfactory that the Treasury, at any rate, realises that it is important that these matters coming from the Estimates Committee should be dealt with by the Departments promptly.

The Report divides itself easily into two. The first part is the complementing procedure which is contained in Recommendations 1 to 8, and the second is the management functions of the Treasury in Recommendations 9 to 13. Dealing with the questions of the complementing, the modern position of the Treasury is based, in the opinion of the Estimates Committee, on Treasury Circular E.C. No. 2/49 of 29th July, 1949. I think that it is only right that I should read this, as this is the basis on which, one understands, the complementing of the Treasury is based.

Paragraph 2(ii) says: The functions of the Treasury in the financial control and oversight of staff matters are most effectively carried out by concentration on broad issues and avoidance of matters of detail. The Treasury will therefore direct itself chiefly to the central control and scrutiny of the exercise of their responsibilities by the Departments. Then, paragraph 2(iii) says: In addition to exercising its general control over complements and numbers, the Treasury also has an important responsibility for securing an even standard of grading of posts throughout Departments. This is a very important matter into which the Estimates Sub-Committee went very carefully. The quotation of the 1949 circular went on: This may necessitate rather closer examination of particular branches and posts than would be required from the point of view of numbers alone. The position was that the Sixth Report of the Estimates Committee, 1957–58, recommended that there should be an investigation into the Treasury control of establishments, and that was followed by a Report of the first Committee under Lord Plowden on the Control of Public Expenditure. Following that, in November 1962, there was a reorganisation of the Treasury. That reorganisation was directed not so much to complement and establishment problems as to the general management by the Treasury of Government organisation. There seem to have been some departure in principle from the 1949 document. The Estimates Committee takes the view that the Treasury must continue to control numbers and complementing and must, in accordance with the 1949 document, have a duty to inspect and survey the activities of the Departments.

As a result of the expression of these views, the Estimates Committee has been described as "Gladstonian counter-revolutionaries". I am not sure that that is a very accurate description, and the answer of the Treasury, at page 8 of the Special Report, confirms the views which I have expressed. I quote the last paragraph of the Report: The Committee may be assured that the Treasury remain conscious of their ultimate responsibility for the control of complements and grading. A departmental Minister is answerable to Parliament for the efficiency of his department, and can reasonably expect to be supported by staff of numbers and types adequate to carry out Government policy in his departmental field; but the Treasury are not unmindful of the principles laid down in 1949 as to their relationship with departments over the control of complements and grading, and are fully conscious of their responsibility to the House of Commons in these matters. That is a general principle which seems to be agreed, and it would be of value if the Financial Secretary would confirm that that is the case.

There are one or two detailed questions which have arisen since the publication of the Treasury replies about which I should like to ask. The first is contained in Observation No. 3, which deals with the question of the Establishments (Complementing) Division. It states that it is being strengthened to meet the tasks which fall to it. I should be glad to know in what way it has been strengthened and whether the Government are satisfied that it is now strong enough to deal with the problems which arise and which to some extent have been increased by the fact that there are a number of new departments.

The next question arises under Recommendation 1, which was that the Treasury should require Departments to submit their October returns in a regular sequence. According to the evidence given before the Sub-Committee, it was often found that returns were made late and were not satisfactory, and it was felt that there should be arrangements to make it quite clear that the returns should be made regularly at certain times in October.

Observation No. 2 deals with the question of delegation of authority. It reads: In addition, Departments have been asked whether they desire to have a measure of delegated authority or an extension of present delegated authority in relation to their departmental classes. It would be very helpful to know whether there has been any change in the delegation of authority. Has it increased or decreased?

The final recommendation on which I should like an answer is Recommendation 3—the question of preparing a programme for the systematic and regular inspection of Departments. There was much concern in the Committee about this. It was felt that a regular inspection would have the result of keeping Departments on their toes.

Recommendation 4 is one of the recommendations which we felt in the Estimates Committee was of considerable importance. It raises the question of the Diplomatic Service, and it arises from the decision following the second Report of the Plowden Committee that there should be a 10 per cent. reserve of manpower for the Diplomatic Service which would not be tied to any establishment.

During the Committee's investigations it appeared that a decision had been taken to reduce the 10 per cent, reserve of manpower to 7½3 per cent., which meant that between 300 and 450 bodies would be outside a definite establishment. The Committee took the view that the percentage basis was a very unsatisfactory way of dealing with this situation, in spite of the fact that the Foreign Service had certain characteristics which were not present with other Departments. It seemed to us that the instruction on establishments was, in principle, the same as that outlined in a 1949 Treasury circular, the words of which I must repeat, because that document stated: The Treasury also has an important responsibility for securing an even standard of grading of posts throughout departments". I would like to think that it is considered that this percentage addition to the departmental staffing of the Foreign Service is not satisfactory and that it will be looked at again by the Government. The matter could easily be dealt with by the creation of adequate establishment posts. This establishment idea is very unfortunate and might have considerable repercussions. It would appear that the Estimates Committee will need to examine with greater care than it would normally look at establishments the affairs of any Department which has increased its staffing percentage-wise.

I come to Recommendations 5 to 7, concerning the Defence Ministry, and I would like to say at the outset how glad I was to note paragraph 189 of the Statement on the Defence Estimates, published today. There was not as much involved as was thought would be necessary in the combining of the Services under one Defence Ministry and there was not the necessity for the number of bodies anticipated. I believe that it was thought that 312 bodies would be necessary for this purpose but, as things turned out, only 70 were needed over and above the combined totals of the Services.

I note that in paragraph 188 of the Statement there is to be a substantial reduction both at headquarters and at out-stations, and it is a matter of some satisfaction that we read in paragraph 189: It has been accepted, in accordance with the recommendation in the Fifth Report of the Estimates Committee … that there should be a specific inquiry into the organisation and establishments of the Ministry within two years. I am sure that that will be a satisfactory way of dealing with the matter.

I come to Recommendation 8, which states: The Treasury should ensure that work study units are established in all Departments employing large numbers of industrial staff". This is an important matter and something about which we did not take a great deal of evidence. However, it speaks for itself, because the numbers of industrial staff in the Ministry are substantial and the advance in the knowledge of work study is something giving considerable benefits. Could we be told whether the Ministry of Aviation and the Ministry of Public Building and Works, as well as the Ministry of Defence, deal with work study?

I cannot recall this matter having been raised previously, but it is worth noting that work study is accompanied by another form of technique which is of considerable importance and which, I believe, will be of growing importance, particularly in defence matters—value engineering and value analysis.

Having referred to the establishment side of our Report, I come to Recommendations 9 to 13, which deal with management. It is not unlikely that this should be so because it is fair to say that Lord Plowden's Report dealt strongly and ably with the question of management from the Treasury point of view. This subject is of very great importance because we must have the right sort of management methods.

I do not propose to mention the subject of recruiting for the Civil Service, because Sub-Committee E of the Estimates Committee is going into that matter. On the subject of training, it would be interesting to know if there have been any changes in development at the Centre for Administrative Studies. Unlike some hon. Members, we were able to pay only one visit to the Centre. We were impressed with the work going on there and with the enthusiasm and interest shown by those receiving the benefit of the course.

I wish to comment more particularly on the Report of the Joint Working Party on Training. That Working Party was proceeding at the time we were investigating these matters. It had in mind the question of the establishment of a staff college for senior or middle-rank officers. We therefore did not go into the matter at all. However, we thought that it was important and we reserved our position on it so that we might subsequently learn what was being done on these matters. It would be helpful if we could be told the general nature of the decisions taken, as we were given to understand from the evidence given to us that a report would be issued soon.

This suggestion of a staff college for administrative purposes was rejected in 1949, but we were told that it was receiving active consideration by the Working Party. For this reason we did not make any specific recommendations about training. It would be helpful to know, in connection with Recommendation 9, whether the scientific side of the Civil Service has been reorganised. In Recommendation 9, hon. Members will observe, we suggest that there should be a stimulation of recruitment into the scientific side by the provision of a better careers structure and that there should be opportunity for those in the scientific class to transfer, should they wish to do so, to the administrative side.

Recommendations 11 and 12 deal with the question of O and M advice to Departments. It is presumed that this section will have planned reviews but, of course, it is particularly important when there are a number of new Departments which will, presumably, value advice given by those experienced in organisation and methods matters. In that connection, it would be of interest to know whether computerization—that is a horrible word, but it conveys an idea—is developing, and whether the Government take the view that the Treasury is right to develop in that way.

Recommendation 13 is important, dealing, as it does, with the Management Services (General) Division. This body—which was felt by the Committee to be understaffed—is supposed to take a long and broad view of general problems, particularly for the future. Indeed, it was said in one place that it almost amounts to a body that might consider the machinery of Government. One is, therefore, bound to ask what part the Division played in the creation of the new Departments, whether its numbers have increased, and whether it has been given a chance to play a full part in a situation that seemed to offer great opportunities.

The Committee paid particular attention to the Management Services (General) Division. which is rightly considered important because it does that forward thinking that is so important in certain circumstances. Over all, the Estimates Committee consider that the Division and the Treasury are allies, and work together for the general benefit of the organisation of Government.

The Estimates Committee felt that very often the highest officers were at the head of things in Departments for too short a time—senior officers for about four years, and junior officers for three years and two. We felt that that was not enough, particularly at the Treasury. We believe that in the Treasury, which is in a position to set an example, and to encourage and help other Departments, it is most desirable that officers, particularly senior officers, should remain, if possible, for a longer period.

I am sorry if the way in which I have spoken about this subject—or the facts of the case—make it not as interesting as it might be, but it is fair to say that when we get into the thing and see the problems and difficulties, it becomes of fascinating interest. It may not always be done by spokesmen of the Estimates Committee, but I can congratulate the Treasury generally on its work.

4.35 p.m.

Mr. John Rankin (Glasgow, Govan)

would, first, congratulate my hon. and learned Friend the Financial Secretary on the eminence that has come to him. I am very glad that he is to reply to this debate, as I feel sure that his reply will be more helpful than the replies I have been fated to get from other occupants of the post to which he has been called.

I can also say, on behalf of my colleagues in Sub-Committee C, how much we appreciate the work of the Chairman of the Committee, the hon. Member for Aldershot (Sir E. Errington). He puts an almost unbelievable amount of his time between sittings of the Committee into this job, and today he has covered very fully the scope of the Report. We congratulate him, not only on his work in the Committee but also on the way in which he has handled the Report.

We were up against a very powerful Department in the Treasury, and in the very valuable memoranda that it supplied to us we were given a little of the history of its evolution. I am certain that we were all impressed. We were told that the Department came into existence in the first half of the nineteenth century as part of the movement to create a unified Civil Service. Time, at least, is therefore on its side, but its immense authority is supplemented from other and even more powerful sources.

The Treasury has, first, the general power vested in the Chancellor of the Exchequer of controlling public expenditure. Secondly, it has the statutory powers under the Exchequer and Audit Departments Acts. Thirdly, it has the requirement of Treasury approval that is included in many other Acts. Fourthly, it has the right to give instructions or to make regulations for controlling the conduct of Her Majesty's Home Service, and for providing for the classification, remuneration and other conditions of service of all persons employed therein either permanently or temporarily.

This is a vast and growing power, and it is evidenced, first, by the way in which the Civil Service has increased numerically. We were told that in 1939 there was a total of 191,200 non-industrial staff, which had increased by 1963 to 412,500. The number of industrial staff in 1939 was over 190,000, and by 1963 it had grown to 263,000. Between those two years, there was a growth from 380,300 to 675,600 in the non-industrial and industrial strength of the Civil Service. These numbers at both levels exclude the Post Office staffs.

However, our investigation showed that the scope of the Department had greatly increased in that period. Naturally, this meant an increase in numbers; and new Departments have also emerged during this period. In addition, there has been a startling increase in the cost of living. For, not only persons, but supply is involved. For the year ending March, 1965, the total supply service, including the Supplementary Estimates which have been passed since or are presently before us, reaches the grand total of £6,723 million. This is a vast sum in relation to our gross national product.

As we have seen today, this sum will be somewhat increased. The main function of the Estimates Committee is to ensure that adequate value is received for these sums when they are spent. Sub-Committee C, however, was concerned with only a relatively small part of this huge expenditure, but it was still a very large sum—about £700 million, involving the work and future of over 675,000 persons.

Despite these enormous powers, our witnesses were exceptionally helpful to the Committee and, as the Ninth Special Report shows, have rejected only three of our recommendations. It may be said that some of their acceptances are qualified. So, it can be said, were some of their refusals. I should like to press to the notice of my hon. and learned Friend the Financial Secretary some points which, I agree, have been mentioned by the hon. Member for Aldershot, but repetition is sometimes useful, in that it puts greater emphasis on the point. I shall hope at least to emphasise the importance of these points in my repetition.

Paragraph 45 of the Fifth Report deals with computers. We are told that seven are on order, 32 are in use, and there is a future requirement of 21 up to 1967. Cannot this figure be increased? We have, recently, in our own midst had the position of retirement pensioners. It was emphasised then that, had computers been available or usable in the Ministry of Pensions, they would have been of great help to the Government in speeding up the payment of benefits. Has anything been proposed about mechanising the Aliens Index at the Home Office? And what is being done about replacing out-of-date machines?

The hon. Member for Aldershot mentioned the scientific Civil Service. We are told in the reply to Recommendation 9 that the organisation of this service, including questions of career structure, is now being examined. Has this examination been completed? If so, could my hon. Friend the Financial Secretary tell us what the results are? If not, why has it not been completed? The Committee found that recruitment of scientists was not up to standard. This is emphasised in Question 473, and succeeding questions. Was the fact that it was not up to standard due to the absence of a better career structure? I ask my hon. Friend to press ahead with this very important matter.

May I say a few words about Treasury staff, supplementing what my colleague said? We express our view, in paragraph 48, that we could not undertake a full review of the system of Treasury control of establishments without considering the structure and organisation of the Treasury and the quality of the Treasury staff who are responsible for the establishments of the Departments. We found in that examination that too many Treasury people at top level had little or no previous experience of Treasury work and that there were too many changes at the top. Since we said that, the then Third Secretary on the management side has been moved twice. There have been four Third Secretaries in Defence, Arts and Science in about two years. Changes have taken place in three Departments in two years. We believe that this cannot be good for Treasury control. I ask my hon. Friend the Financial Secretary to undertake that there should be greater effort to achieve continuity at the top and a much higher proportion of people in the establishment with considerable previous Treasury experience.

I hope that in reply my hon. Friend the Financial Secretary will give us a great deal more consideration and enable us to believe that in our Report on this occasion we have made a greater advance than we felt we made on the last occasion we submitted a Report to the House.

4.50 p.m.

Mr. Alan Hopkins (Bristol, North-East)

I should like to join the hon. Member for Glasgow, Govan (Mr. Rankin) in paying tribute to my hon. Friend the Member for Aldershot (Sir E. Errington) on taking the chair in this most happy Sub-Committee C in the last Parliament. It was the third occasion on which I had the great privilege of serving on that Committee and I am sure that my hon. Friend will agree that we not only had most interesting evidence from the Treasury, but, also, that the recommendations we made were largely accepted by the Treasury, which was somewhat different from what happened with an earlier Report on immigration.

I have often thought that the Estimates Committee relies upon the lack of innate knowledge in hon. Members who sit upon Sub-Committees and who are so ably assisted by the Clerk, to whom very often too little credit is given for what is eventually produced. This leads me to the thought that it might be appropriate at some future stage to consider whether the scope of these Committees might be extended by affording them expert advice to assist them and the Clerk in what they do.

I should like to make three short points on the Committee's Report. The first concerns Recommendation 9, that The Treasury should take positive steps to stimulate the recruitment of scientists by producing a better career structure within the Scientific Class, and should encourage the transfer of members of the Scientific class to the Administrative class. I am most interested to know that the recommendation was accepted by the Treasury. I hope that the Financial Secretary, in replying to the debate, will be able to indicate whether progress has been made on these lines.

I was most impressed by the evidence given by one of the deputy chairmen of Imperial Chemical Industries, who indicated that the dividing line between the scientist and the administrator at the very top was virtually non-existent, whereas it is generally the case today in the Civil Service that there is a distinct difference not only between the scientific class and the administrative class, but also between the administrative class and the executive class. One of the witnesses told us that this barrier—which was the word actually used—is gradually being broken down. I hope that the Financial Secretary can say that in the case of transfers between the scientific and the administrative classes the barrier is no longer there.

The Committee's Recommendation 10 refers to the need, which was developed in evidence, to establish some links between the civil service and industry both at home and abroad. I readily accept that that is difficult. Indeed, the opportunities are not in number as great as they might be for such an exchange, but I still believe that it is useful for senior civil servants to get some idea of the workings of industry and the benefit of experience and research in the universities both here and abroad. Again, the evidence presented by the Treasury was that this was being done at the moment, although on a limited scale. I accept that the scope is limited but can the Financial Secretary say that this, I hope, useful transfer is being looked into now and whether any progress is being made with it?

Finally, there is the question of the use of computers. The hon. Member for Govan made the point which I intended to make. I will not, therefore, re-emphasise it, but it is clear from what we were told that there is not only a present need for more computers, but that the need is likely to increase as the years go by. The hon. Member gave one good illustration. I can see the need for the computers and for their continual modernisation, because these machines do not have a life of 10 years as they are used in the Civil Service. The situation should be reviewed every five years and evidence given to the Treasury whether new machines should be substituted for the old or additional ones ordered.

I join once again, in congratulating my hon. Friend the Member for Aldershot on so successfully leading what was a most interesting Committee.

4.55 p.m.

Mr. William Hamilton (Fife, West)

I agree very much with the hon. Member for Bristol, North-East (Mr. Hopkins) when he makes the point about the desirability of interchange between the Civil Service and industry. Whatever one may think about the appointment of Dr. Beeching, for example, to advise on transport problems there is no doubt that within the terms of his remit he did a very good job. If we had more of that kind of interchange it would be of enormous value to industry and to the Government and, therefore, to the nation.

Before I refer briefly to some of the other points made by the hon. Member and also by the hon. Member for Aldershot (Sir E. Errington), I would point out that the debate on this Report is unlikely to have as much publicity value as the debate on the last occasion, when we discussed military expenditure overseas. There is not the kind of scandal, if I might so call it, in this Report as there appeared to be in the Report on military expenditure overseas—the £1,000 R.A.F. dogs in Singapore and the allegedly expensive officers' flats in Gibraltar. Things of that kind are meat and drink to the Press. There is no such meat and drink for them in this Report, but although the Report itself is much less exciting in that respect it is no less important for all that.

The Report fits into a pattern of Estimates Committee Reports over a period of years. The hon. Member for Farnham (Sir G. Nicholson), the former Chairman of the Estimates Committee, was Chairman of the Sub-Committee which produced the Sixth Report in 1957–58 on Treasury control. Out of that came the Plowden Committee recommendations which resulted in the most drastic overhaul of the Treasury that has been undertaken for 100 years. Then we have had this Report on Treasury Control of Establishments and, as the hon. Member for Aldershot mentioned, there is an investigation currently under way under Sub-Committee E on the working of the Civil Service Commission in matters of recruiting, training, and so on.

The Estimates Committee has done an extremely good job in focussing attention on the rôle of the Treasury in controlling establishments, in controlling the financial set-up of the nation, and in controlling the methods by which we recruit civil servants, train them, pay them, and so on.

Basically, this Report is concerned with the efficient use of the scarcest and, in many ways, the most valuable commodity in Britain today, educated manpower. The figures which the Committee produced are interesting in denoting the very size of the problem: 412,500 non-industrial civil servants and 263,100 industrial civil servants, a total of 675,600, at April, 1963, and that did not include the Post Office, which itself is an enormous employer of labour.

It is clear that, as the scope of government increases in size and complexity, so does the work and the number of civil servants in the Government's employ increase. The history of the development of Treasury control over these vastly increasing numbers affords an interesting example of the British empirical approach to problems of government. But the end result has been an enormous concentration of power in the Treasury, and this despite the freedom of certain major Departments to vary their complements.

As the hon. Member for Aldershot said, the Sub-Committee confined its inquiries to the working of the various Treasury divisions concerned with this problem, especially to the arrangement of those divisions on a more functional basis consequent on the internal reorganisation of the Treasury in November, 1962, a reorganisation and rearrangement designed to contribute more positively to good management throughout the Civil Service". The reorganisation itself is, naturally, commended by the Estimates Committee, through whose activities the Plowden Committee was set up and on whose recommendation the reorganisation was carried out. On the management side, the Estimates Committee's criticisms are, I think, of detail only; no serious criticism comes out of the Report on that side. On the staffing side, however, there are rather more serious criticisms. In particular, the Committee was disturbed about the approach to the control of numbers laid down in 1949, to which the hon. Member for Aldershot referred.

This was the Treasury control of numbers and grading in the Civil Service by twice-yearly manpower reviews at which the total ceiling of a Department's non-industrial staff is fixed. Below that figure, there was a freedom for Departments as to numbers and grades in particular fields, up to the level of their delegated authority. As was pointed out in the Report, the Treasury staff inspectors carry out test checks.

Concern was expressed that the Plowden Committee seemed to recommend that there should be some equality of status between Departments and the Treasury in the control of the numbers of civil servants in particular Departments, and it appeared to the Sub-Committee—I was not on it, but I think that I am interpreting its view aright—that this seemed to run counter to the relationship between the Departments and the Treasury as laid down in 1949.

Any hostility between the Treasury and Departments is undesirable. They are part of the same team with, presumably, the same objectives. But each Government Department must clearly understand that the Treasury has the right to inspect regularly and to root out quite ruthlessly any inefficiency which it sees. In this respect, as the Estimates Committee said, the Treasury must be the agent of the House of Commons. This House is not a body which can do that kind of thing, and we have to rely on the Treasury to do it on our behalf. It can be done without hostility. The great skill of the Treasury is in seeing that it is done without incurring hostility on the part of Departments. When the Estimates Committee made this point, appropriate noises were made by the Treasury in its reply, and I hope that my hon. and learned Friend will repeat and enlarge on those welcome noises.

I turn now to some of the specific recommendations of the Sub-Committee, in particular to Recommendation 4, on the question whether there should be a percentage reserve of manpower for the new Diplomatic Service and, if so, what the percentage should be. The Plowden Committee on Representational Services Overseas recommended that the new service should have a 10 per cent. reserve of manpower to be retained permanently for the purposes of training, travel, leave and sick leave.

The recommendations of the Plowden Committee were accepted by the Government of the day almost without qualification, but I was very glad to know, and I think that the Committee was very glad to know, that in their evidence to the Sub-Committee the Treasury witnesses did not defend very strenuously the 10 per cent. margin. They even said that the 7½1 per cent. margin which is now agreed will not be reached for at least two years.

I do not know where these percentages come from, whether they are based on past experience or what. Perhaps the point came out in the evidence and I overlooked it, but I do not think that it did. In any case, I hope that the question will be watched with an extremely critical eve. I do not like the idea of giving a percentage margin. I prefer to look at each case on its merits, and I hope that the Treasury will think about this again and, at the very least, watch it in a highly critical mood.

If it can be proved convincingly that the service will suffer in efficiency if it has no margin, I am prepared to be convinced, but I do not at present consider that the case has been made, although, of course, I respect the opinion and recommendation of the highly expert and capable Plowden Committee. The Estimates Committee might well, at some future date, spend a little time—perhaps soon—inquiring into the working of the new arrangements in this connection.

Recommendation 6 concerns the reorganised Defence Department. The House will recall that the old Service Departments were integrated into one Department on 1st April last. The immediate result was not a decrease, but an increase in staff. The Sub-Committee found that there was an increase of 901 non-industrial United Kingdom-based staff for the year 1963–64 and an increase of headquarters staff at the Department of 312 in the current financial year—roughly a 12 per cent. increase.

The Treasury pointed out that the net increase was only 70 and that, by 1st April, 1965, the total headquarters staff will be less by 300 than the figure on 1st April, 1964, and between 800 and 1,000 less at out-stations. The hon. Member for Aldershot quoted the Defence White Paper which fortuitously came out on the very day we were debating this and it is interesting to compare the forecast with what has happened. I hope that my hon. and learned Friend the Financial Secretary will give us a little more detail and try to project the figures more into the future, indicating whether hope can be entertained for further reductions later on.

Recommendation 8 concerns the desirability—indeed, the necessity—of establishing work study units in the Departments employing a large number of industrial staff. Industrial staff total about 400,000 both at home and abroad and in Appendix 4 of the Report the Treasury shows that work study teams exist in the Defence Department, the Forestry Commission and the Royal Mint. These last two are not very big Departments, but employ a fair number of industrial staff. I took the trouble to tot up the figures and, if my arithmetic is right, work study teams in all these Departments, including the Defence Department, cover about 188,000 industrial staff, only about half the total.

I should be glad if my hon. and learned Friend would confirm or correct those figures. If only half the industrial civil servants are covered, then there is an unsatisfactory state of affairs and I hope that he will give an assurance that the other half will be covered by work study units within a measurable period of time. Indeed, the Treasury has said that it is seeking to do something about this. I would like to know what has been done and whether tangible results have come about since the Report was issued.

Recommendation 9 deals with the desirability of a better career structure within the scientific class of the Civil Service. I do not want to spend too much time on this because a Sub-Committee under the chairmanship of my hon. Friend the Member for Middlesbrough, West (Dr. Bray), who is very interested in the subject, is going into the question of recruiting and training civil servants. But this is probably one of the most important recommendations of the Committee. We talk a lot today about living in a scientific age and about the need to train more scientists and technologists, but it still seems to be the case that the top-class scientist or first-rate technologist is regarded somehow as being a lesser mortal than the classics scholar from Oxford or Cambridge.

Recently, there were figures showing the number of places in colleges of advanced technology which are not being taken up. We have more places than people asking for them, and I think that this is precisely because of the feeling that, somehow or other, despite the scientific age, despite the fact that our future depends on training more and more scientists and technologists, there is still a feeling among young people that scientists and technologists are less worthy individuals than people who have first-class honours degrees in Latin or Greek, or something of that kind.

Not only are we not getting sufficient scientific and technological students into our universities and C.A.T.s, but once they are qualified very few of them, fewer certainly than we would like, are attracted into the Civil Service. As has been pointed out, one possible explanation of this lies in the lack of an attractive career structure and in the inability of science graduates in the Civil Service to reach the higher posts.

In evidence to the Sub-Committee, the Treasury witness refuted the suggestion that it is not possible for the scientist in the Civil Service to get to be the head of a Department, a permanent secretary. But if it be the case that scientists can reach the top, as the witness alleged, perhaps my hon. and learned Friend will tell us how many have done so in, say, the last 10 years. It would be interesting to have the figures. I doubt whether there is one. The Treasury has indicated in its reply that the career structure is being examined and we would much like a progress report. When might we expect the result of the examination?

The second part of Recommendation 9 deals with transfer from the scientific to the administrative class. The Treasury has indicated that it has already taken steps to facilitate and encourage this transfer and that is fine—as far as it goes. But that in itself starts from the premise that, somehow or other, the administrative class is a kind of elite club of supermen to which lesser mortals are now being given limited access. Why was it never suggested that the administrative class should have a chance to transfer?

This is like the education system in which there is freedom of transfer between secondary modern and grammar schools. We emphasise in that context, however, that the secondary modern child can transfer to the grammar school. We do not transfer the other way unless it is as a form of punishment. It is, in fact, a form of punishment to go from a grammar school to a secondary modern school. It is a very unhealthy state of affairs when, in a scientific age, the scientific class of the Civil Service is regarded as of less importance than this super administrative class. I hope that as a result of the Treasury's examination of the careers structure of the scientific class, this regrettable and dangerous attitude, dangerous for the nation, will be altered.

I end with this short but important point. Basically, the debate is about the most efficient use of manpower in the Government machine. In that respect it is part of the much bigger but essentially same problem as we face on a national basis. Our future survival as a great nation depends upon its resolution.

5.21 p.m.

Mr. Ian Lloyd (Portsmouth, Langstone)

It gives me great pleasure to be able to discuss the subject of computers. I must confess that this is something which I had not expected to have the opportunity to do here. Perhaps it is an indication of the extent of what one might call real time management, to use the modern phrase, in the House of Commons, that new Members like myself should have discovered, literally only half an hour ago, that it would be possible to discuss computers in a debate on the Report of the Select Committee on Estimates.

We have not begun to appreciate the enormous national importance of this type of equipment. I have read the Select Committee's Report on this subject with great interest. It points out that a certain number of computers are installed and that others are on order, but it gives no idea of the power of those machines. I do not mean merely the technical capacity of a single computer, but the fact that a battery of computers can now be regarded in terms of power in much the same way as one regards the generating capacity of an electrical system.

How soon will it be before we are able to see some sort of figures to show the growth in our national computer capacity? There are some figures, which I shall have to recall somewhat hurriedly from memory, which suggest that we should regard this matter very seriously. For example, I have been told that the Philips factory in Eindhoven alone has an installed computer capacity considerably greater than that of several industries in this country. I have been told that the Boeing Aeroplane Company on the west coast of the United States alone has an installed computer capacity greater than that of the whole of the aircraft industry in this country.

If this is so and if the House appreciates that it is and we can go on from there to realise what the significance is in national terms, this Report will have been extremely valuable, and if we can draw more attention to the national significance, we will have done something extremely useful in this debate.

The hon. Member for Bristol, North-East (Mr. Hopkins) referred to the rate of development of these machines. This, too, is of enormous significance. We are used to making our judgments over ten years or five years, but I have a document from the United States in which the president of one of the foremost computer companies says that a modern computer is for all practical purposes only about eight years old, and that in that brief time there have been four generations of machines, each more than doubling the operating capacity of its predecessor and doubling operations per dollar produced by its predecessor and, moreover, that that is far from being the ultimate limit.

I have recent figures to suggest that in the next two or three years the cost per unit of these vast new machines will be reducing by an order of ten, so that in three years' time they will be ten times as efficient as they are now and ten times as cheap as now.

This brings me to a fundamental point, not a political concept yet, although it may become so once the House and the nation appreciate the nature of the revolution which is waiting round the corner. We are facing a major balance of payments situation. If we were to look ten years ahead to the largest single contribution to our balance of payments which could be made, we would see that it could be made by a concentrated emphasis on the installed computer capacity in British industry. In this more than in almost anything else which has been discussed in the House in the last few weeks will probably lie the key to British industrial advancement and the surge of industrial energy which we require to get out of the slough of despond in which we now find ourselves.

How does it effect the House? I recently had the privilege of lunching with the director of the new French administrative staff college. He told me that there were only three criteria in which he and his colleagues were really interested when recruiting people for this staff college. This is being done all over Europe. The three criteria were simply that pupils must have a knowledge of mathematics, a knowledge of economics and a knowledge of foreign languages. Apart from that, he did not mind whether they were scientists or classicists or what their education had been. These were the fundamental requirements.

If we in the House of Commons are to enter a period of real time economic management of the nation, which is certainly feasible and possible, and if we are to have a battery of large-scale great power computers throwing up on a screen in this building movements in national income and expenditure not for last week or last month or last year, but for today, during the last hour, if we are to have machines throwing up the amount of Customs revenue not for last month or last year, but for last week and today, then we will have to acquire a very much more sophisticated approach to the problems of Government and the problems of the real time management of the economy. The degree of control which many members of the Government would like to have over the economy and which they certainly do not have at the moment would be vastly enhanced, and the sooner we recognise that this is coming and that it will be possible, the better qualified we in the House will be to conduct the government of the nation.

In our approach to the balance of payments problem, there has been a great deal of controversy about whether investment in the public sector or the private sector should be more radically pruned. This is almost irrelevant. What we should now consider is the relationship of the investment in the private and public sectors to the rates at which that investment will pay off in national terms. This is all that counts. To bring myself back to the subject of computers; here is undoubtedly one instrument of power in which a massive investment, private or public, would yield a massive national dividend. We need to look at more matters of this kind and to apply this criterion to this question of investment.

We need big computers. While it may have been true in the First World War that God was on the side of the big battalions, today he is on the side of the big computers. I read somewhere that there was very little difference between the carelessness of drivers of 40 years ago and the carelessness of drivers today and that the only difference was that horses 40 years ago had more sense. If I may transpose that into the terms which we have been discussing, there is very little difference in human competence 40 years ago and human competence in Government today, but there is a vast difference in the tools at our disposal and a particularly vast difference if only we would recognise that this is not merely an instrument to speed the national payroll or keep the national inventories, but an instrument which will enable us as we have never been able before to look at the problems of the nation. With these new machines we can simulate these problems on a vast scale.

I have not seen any reference to this process of simulation in the Report. I hope that it is being carried out. I know that it is being carried out in Cambridge and possibly elsewhere, but it should certainly be done by the Treasury and the major organs of Government. If we start this process, the ambitious horizons which the electorate are imposing on the Government and which some members of the Government are encouraging the electorate to believe are technically possible, will then, and only then, be attainable. They will not be attainable if we carry on as we are.

5.31 p.m.

Dr. Jeremy Bray (Middlesbrough, West)

I will not follow the line of thought of the hon. Member for Portsmouth, Langstone (Mr. Ian Lloyd) in his interesting speech. However, I cannot resist quoting one remark by Mr. W. W. Morton, Third Secretary to the Treasury, who, when writing in the "Journal of Public Administration" a year or two ago, said: The introduction of automatic data processing to the public service has been something of a success story. There may be some dispute about that, but Mr. Morton went on: To most of us ordinary public servants there is something basically improbable about machines which can beat the pace of the human mind by reducing everything to the measure of plus or minus one". That is the kind of remark which drives the technical man up the wall. To suppose that this degree of Philistinian, deliberately cultivated amateurism, is appropriate in the Treasury is absolute nonsense. There is a small computer, not even in the Treasury but in the Central Statistical Office, which Treasury officials use. Or they put the calculations in the post to Roehampton where a computer used in agricultural research gives them the answer after about a fortnight. This is the cycle and pace of economic forecasting. There is no room for complacency at all.

Turning to the Estimate Committee's Report, I should like to add my support to certain things which have already been said. On Recommendation 4, which my hon. Friend the Member for Fife, West (Mr. William Hamilton) pointed out was hardly even defended by the Treasury, it is very difficult to justify a flat rate percentage margin to cover the exigencies of the Foreign Service. One wonders whether the Home Civil Service could have got away with even a 1½ per cent. margin to cover the needs of training, for example, which is plausible. This is something which seems to be best considered on an ad hoc basis whenever a special knowledge of languages or of abstruse studies is needed by the Foreign Service.

On Recommendation 10, which deals with the need for movement in and out of industry, again I feel that more than pious aspirations are needed. There are certainly difficulties, but movement is taking place. It is a pity if the Treasury is not sympathetic to this point of view to quite a considerable extent. This year, six principals have been recruited at a later age and two assistant secretaries are in process of being recruited. The numbers needed at both levels, and possibly higher levels, allow for a very much greater increase in these figures in future years.

Obviously if the level of salary is correctly geared it is possible to bring extremely good people into the public service and not people who have come to a dead end or who are frustrated and possibly not the best employees from other fields. It should not be a second-best entry. It is 20 years since we had the influx of outside civil servants during the war. It would be no bad thing if there were another influx at the same spread of levels as there was then. I am sure that those in the administrative grades of the Civil Service who are looking forward to more fresh air and opportunity would not find their own career prospects damaged by such an influx.

Having criticised the Treasury to some extent, I join in the unease which has been expressed by the Treasury about something which the Estimates Committee said on the working relationships between the Treasury and the Department. The Committee wanted very strongly to emphasise the position of the Treasury as the instrument of Parliament in supervising Departments. The Treasury, in evidence, reminded the Committee of the Plowden Committee's recommendations about joint working between the Treasury and the Departments. This was genuinely joint working. Yet the Committee says Treasury control cannot possibly take place on the basis of equality.

It would be a mistake for the House to undermine the principles of the Plow-den Report and the divisions of responsibility between the Treasury and the Department. In particular, it would be a pity for the House to build up the Treasury and the responsibility of the Treasury to a level higher than the present one. Too often in Departments it is argued that the Public Accounts Committee or the Estimates Committee would not stand for something when what is being argued is that the Department will not stand for something from the Minister. This House is sometimes used in a way in which it would not wish to be used. We should not lend ourselves to the kind of attitude by what we write in reports of Parliamentary Committees.

Turning to the relative powers of the Treasury and other Departments, the Plowden Report casts grave doubt on the method of control of public expenditure which was exercised before it started work and, indeed, before the Report of the Estimates Committee on Treasury Control of Expenditure, which was the major Report preceding this Report on the Treasury Control of Establishments. The Plowden Committee argued: The bulk of expenditure cannot effectively be controlled by a system of annual estimates alone". If public expenditure cannot be controlled by annual estimates alone, and if we need five-year reviews and the authorisation of commitments, is it not proper that Parliament should be involved in authorising those commitments? Yet any possibility of Parliamentary control or Parliamentary review was rejected by the Plowden Committee. Specifically it was argued that it would be impossible to work efficiently any system of Parliamentary control of commitments which went beyond what is already implied in the present processes of supply and demand. In other words, Parliament is to be left with machinery which the Plowden Committee rejects as impracticable for the control of ordinary Government business.

I do not think that the House should accept this position. We should examine whether we can institute some form of review of commitments to spend as distinct from merely a review of the annual estimates.

To do this would mean a much closer contact with Departments over a wider range of their business than Parliamentary Committees are at present able to secure. It would also mean having the framework of total commitments for the future clearly before Parliament, as they were published by the last Government in the White Paper on Public Expenditure up to 1968.

It is interesting that although that White Paper was published, it was never debated and it still has not been debated. Indeed, its contents were surprisingly little known to hon. Members, on both sides. It was only at the height of the General Election campaign that it became evident that hon. Members opposite had committed themselves to a rate of increase in the real level of pensions which stood at the rate of 2s. 4½d. a week per year on the basic level of the pension. This is a good propaganda point, which we on this side did not pick up until far later than the publication of the Report. I suspect that the political reason why we did not debate that White Paper was because hon. Members opposite were afraid of being challenged on how they would meet this enormous volume of expenditure and we on our side were afraid of being challenged to produce the levels of expenditure implicit in our own programme.

But that is not altogether the best way in which to behave and when an opportunity is offered, however unwittingly, by a Government to debate the serious long-term review of public expenditure, it should be seized by this House and we should have that debate. I do not know quite how, whether it could be taken at the instigation of either the Government Front Bench or the Opposition Front Bench, but it could have been taken, possibly, even in a long Adjournment debate at some stage during the Session raised on the initiative of a Private Member.

Sir Edward Boyle (Birmingham, Handsworth)

Surely, it would have been extraordinarily difficult in one debate to have covered the whole range of topics contained in that White Paper. If one takes the sole topic of education, which I mention because I was responsible for that paragraph in the White Paper, every particular aspect of education which is listed—that is to say, for example, the commitment to go on raising standards of school education, the commitment to work towards the raising of the school-leaving age in 1970, the implementation of the Robbins Report, and so on—had been debated in the last year of the last Parliament. It would not be right to suggest that we had not debated the policy indicated in those forward commitments.

Dr. Bray

I entirely accept what the right hon. Gentleman says about the individual items in the White Paper. What was interesting about the White Paper, however, was that it brought together the proposals as a whole and enabled us to see the balance of expenditure in different areas.

The final allocation decision of the Government has to be taken in view of the total and its distribution between different items. This has never been debated by Parliament. The ultimate decisions and control of expenditure have never come under our review. I therefore think it entirely wrong if the Estimates Committee and this House persist in a charade of maintaining that we are reviewing expenditure when this is not the case. It is largely up to individual Members to carry forward the machinery for the review of expenditure and, no doubt, this is a process which will go on in the course of the years ahead.

Sir E. Errington

The hon. Member appreciates, does he not, that what we are now discussing is the question of establishment and management? Expenditure is an entirely different matter.

Dr. Bray

I appreciate that, and I am grateful to the hon. Member for bringing me back to the point.

Since the publication of the Report which we are today debating, there has been a major reorganisation in the Treasury and it would be a mistake to suppose that Treasury control of establishments is now in quite the same position that it was. A large part of what was formerly solely the responsibility of the Treasury has been transferred to the new Department of Economic Affairs.

To get this into perspective, however, it is interesting to look at the establishment position in the Treasury itself. We see the two sides of the Treasury, and we can estimate roughly the size of the pay and management side by looking at the number of administrative class members in the separate divisions of the Treasury. In pay, there are 22 administrative class civil servants and in management 23, making a total on the pay and management side of 45. That compares with, on the financial and economic side, 48 in the public sector area alone, 21, including economists, in the national economy and economy section and 46 in the finance section. That means that the total pay and management staff of the Treasury is equal to roughly the same size as any one of the three major parts of the financial and economic side; so that it is very much the smaller part. On the financial and economic side, it seems from what I can gather that it is really only the national economy divisions which have been affected by the setting up of the Department of Economic Affairs and that the transfer of staff from there has been relatively small. Thus we have still very much the same balance in the Treasury as there was before the setting up of the new Department of Economic Affairs.

What one asks is whether, in the control of establishments, this is really the best way of organising things. Is it good to associate the financial and economic influence of the Treasury with the question of administering the personnel policy of the Civil Service? This is not a link which springs instantly to mind in any other organisation or firm as the obvious link to make. One does not always put one's accounts department and one's personnel department under the same wing. Why especially accounts and personnel? It seems a somewhat arbitrary grouping. However, never mind. We are a somewhat arbitrary country in many ways.

What are the merits of this arrangement? The criticism that somebody who is expert in, say, establishments in the Treasury is next day liable to find himself in charge of an important aspect of economic affairs is unfounded. There is, of course, a great deal of specialisation in the Treasury and the movement of staff between one job and another in the Treasury need be no more mishandled than the movement of a person expert in housing to looking after, say, the Colonies or any other movement in the Civil Service.

One asks whether there is a proper discharge of the personnel policies under the influence of the Treasury, and one has to question very much whether there is. As my hon. Friend the Member for Fife, West said, the question of recruitment to the Civil Service is under review by an Estimates Sub-Committee, and I would not wish to anticipate anything that the Estimates Committee may say on this matter. When, however, one looks at the general standing and morale of the Civil Service today, one feels that there are personnel questions which, while personnel is linked with finance, will not be properly sorted out.

I give just one example, that of advertising. The public service is subjected to more "knocking" advertisements than any other body of men. They have no come-back whatever. No private enterprise would stand for advertisements saying that it was inefficient at running a proposed new service and that it was subject to the limitations and difficulties of bureaucracy in a way somewhat unique to itself.

The public service as a service needs fighting for, and the management of the careers of civil servants needs the same careful fostering that in many ways it already gets in the Civil Service but which is not seen as a whole. The suggestion has been made by a Fabian Society group, in a pamphlet called "The Administrators", of grouping all the personnel responsibilities in the Civil Service together under a much strengthened Civil Service Commission, thus setting the Treasury free to concentrate solely on the financial and economic side.

Today we are concerned mainly with the control of establishments, and therefore the personnel side, and thus what we should be considering is whether such a reorganisation, more fundamental than any proposed by the Estimates Committee, would be desirable. In a situation where the public service was a much sought after occupation, offering security, dignity and pay above the level which could be obtained elsewhere, clearly a form of organisation which treats it as a jealously guarded privilege to which no corrupt person or the friend of a corrupt person should be admitted, is the right one.

But this is not the position today. It is not a matter of many corrupt people hanging around trying to get into the Civil Service or trying to get their friends into positions of privilege and power. In any case, in so far as this is true, it now happens by a process of temporary appointment to public service, which is a very frequent occurrence, often to posts of great responsibility in the public service, and under no very close control.

This is not a danger, because there is not this overwhelming pressure for privilege, this tendency to corruption, which caused the reform of the Civil Service in the middle of the nineteenth century. In a situation where we are able to relax and see the public servant as a man with a career needing to be looked at in the whole of his life, it is surely better to have a Department concerned just with this aspect of the public service. Clearly the precise organisation of any rearrangement of personnel matters would involve a great deal of consultation with the staff side, the National Whitley Council, and so on, and it would not be appropriate for Parliament to suggest just how this should be worked out; but I am convinced that something needs to be done.

Finally, if I may look at the wider setting of the Treasury control of establishments, I think that one has to ask whether the question to which the Treasury is now subject, with the creation of this new Department, is so temporary that one can maintain the status quo, or is there in this new Department something permanent in British Government? This is not merely a political question. It is a matter of good organisation of administration.

The justification for the Department of Economic Affairs has been, and, before the election, was largely campaigned for from this side of the House, on what I think are mistaken grounds, on the mistaken grounds that it was supposed that the Treasury was restrictionist, and that the only way to get an expansionist view in the Government was to create the new Department. I do not accept this.

Another view which has been put forward is that while the Treasury should concentrate on financial matters in the short term, we need another Department to look at the real factors in the economy, at particular industries, at manpower, and so on, and at the longer-term questions, with the Treasury being financially concerned with the long-term and financial aspects of the economic affairs of the country. I do not think that this gets to the nub of the problem.

As I see it, the more fundamental division is between the responsibility of the Treasury to look at national aggregates, at total national activities, whether they be long or short, real or financial, and for there to be another Department which looks at the disaggregated picture, at the picture within particular regions and industries. On this basis there is a genuine division of function which needs to find departmental expression.

I therefore submit that the rôle of the Treasury will change a good deal in the future. At present we do not have the final picture because the Department of Economic Affairs, being a new Department, has not had time to build up its personnel, or, still more, its standing as a Department in Whitehall. I very much hope that there will not be—there is not today—any kind of war between the Treasury and the new Department, but there will certainly be a need to adjust and to adapt. I hope, therefore, that in its thinking in the future the Treasury will consider whether, in the changing pattern of its responsibilities, it will be able to fulfil its rôle more efficiently if it sheds personnel responsibility to an independent and much strengthened Civil Service Commission.

5.56 p.m.

Mr. William Clark (Nottingham, South)

I, too, should like to commence by paying tribute to this Sub-Committee, and particularly to my hon. Friend the Member for Aldershot (Sir E. Errington) who, throughout the whole of the Committee's considerations, did a tremendous amount of work. The Report covers the period from December, 1963, to March, 1964, and I think that one should pay tribute also to the other Members of the Committee who did such a lot of work. On reading the evidence submitted with the Report, one is led to the conclusion that in between meetings a tremendous amount of homework was being done, and that my hon. Friend the Member for Aldershot certainly did a lot of that homework. The House should be grateful to the Committee, to its Chairman, to its Members, and to the witnesses who gave frank advice and information to the Committee.

As has been said, this is an extremely important Report. The question really is, how does one control so much manpower? It really is big business. It amounts to the control of an empire. Page 14 of the Report shows that in 1963 there were about 412,000 non-industrial staff, and 263,000 industrial staff. These figures exclude the Post Office which, incidentally, according to the latest figures that I have been able to get, employs about 370,000 people of all grades.

Page 3 of the Report shows that in 1963–64 it cost the taxpayer £670 million to employ the non-industrial and industrial staff to which I have just referred, and when one considers the number of staff involved and the cost of that staff one realises that this is a matter of considerable importance. I shall be corrected by the Financial Secretary if I am wrong, but I think that this is the first time that the control of establishments has ever been debated. My researches show that nobody has ever debated it, although it has been spoken of, and in July, 1958, for example, it was decided to set up what was eventually known as the Plowden Committee which reported in July, 1961.

One of the most important paragraphs in the Plowden Report is paragraph 80, which deals with establishments. It says: The Treasury will always have a special position vis-à-vis the Committee of Public Accounts and the Committee on Estimates, but its ability to give independent advice and comment to the Committees on detailed points has declined in the last generation and is likely to decline further. If one reads that, and, at the same time, the evidence of Sir Laurence Helsby, who says: It is increasingly the case, I think, that the Civil Service is to be regarded in these matters as a coherent whole. It is not just a matter of the Treasury having a kind of private argument with a series of individual Departments, one appreciates the position of the Treasury on the question of establishments.

There is no question but that there has been a loosening of the grip of Treasury control. I am not saying that this is a bad thing, but if the grip is loosened it must be replaced by some effective method of control, and it is this method of control that the Committee was investigating. It is interesting to note that the personnel controlling this empire totals only 273. This is in addition to the staff within the Departments which also does the staff inspections, and the rest. The Committee investigated this problem very thoroughly and made some very important recommendations. Hon. Members have mentioned some of these, and I do not intend to go through them all. Many have been accepted, and even those which have not could be said to have been half accepted. The Treasury will probably do something about them.

My hon. Friend the Member for Aldershot said that Recommendation 1 was something that no controlling Department should have to put up with. That is the recommendation that returns of manpower, if they are due in by 30th October or 30th April, should be in on time. There should be no question of a Department making excuses. I am delighted that the Treasury has accepted this. It is essential that the Treasury should know what is happening in Departments which have delegated authority. What struck me about the Report was the apparently loose arrangement on the question of who is carrying out what inspection. It would be easier to have a programme which ensured overall coverage. I am not suggesting that the Treasury should do this, but it is obviously the best suited Department. It should be able to ensure that there is overall coverage when several inspections and investigations are going on.

Paragraph 18 of the Report says: a Treasury witness admitted 'the example you happened to quote, the Ministry of Transport, is quite a fair one … it is a Department which in those two years at any rate has been looked at rather less than the others'. I would have thought that we would not need a Select Committee or a Sub-Committee to ascertain that if someone in the Civil Service knew where all the investigations and inspections were going on. If that system were in operation somebody would be able to say, "We have not had an inspection there", and we could create a master plan.

In the case of a Departmental staff inspection in relation to a Department with delegated authority—as is the case with many Departments—a list of recommendations should be given. The situation would then be satisfactory in the case of recommendations which were accepted, and in the case of those which were rejected it might be a good idea for the Treasury to take the matter to a higher level if the recommendations had any substance. But without a master plan to cover staff inspections we shall be inclined to fall between two stools, with each one thinking the other is doing something. As the Report points out, we must avoid too many reports and too many trivialities.

An interesting suggestion is contained in paragraph 21, to which nobody has yet referred. It was not made the subject of any recommendation, but the Committee suggested that it might be a good idea to inquire into the Diplomatic Service. This would presumably mean that the Select Committee would have to travel abroad. I do not want to make a party point of this, but I would not have thought that the Government could afford to send Members abroad in view of their narrow majority. Nevertheless, there should be an investigation into the Diplomatic Service. There is a difference of opinion between a 7½ per cent. reserve and a 10 per cent. reserve in the Service. I am glad that the hon. Member for Fife, West (Mr. William Hamilton) shares this concern, because there may be a lack of control in this direction.

Replying to a witness's question my hon. Friend the Member for Aldershot said: I do not know whether my colleagues share my view, but I am frightened that this might spread. We were looking at these Estimates, as one does, and one is a little bit frightened when the thing goes past any real control. That is the fear in the minds of my hon. Friend the Member for Aldershot and the hon. Member for Fife, West. I hope that the Financial Secretary will elaborate a little more than he has done his answers to the recommendations.

The question of the unification of the Defence Services has also been raised. Like the Select Committee, I think that there should not be any different method or any special treatment in the matter of control. The Ministry of Defence is our largest spending Department, and it employs many people. I would have thought that it should not have special treatment, but that there should be control. Reference has been made to the fact that there has been an increase of staff in the Ministry of Defence. I was puzzled by paragraph 27 of the Report, which says: There is thus an increase of 312 staff. We know that that has been reduced to 70. The Treasury sought to justify this as a temporary increase which they 'accept very reluctantly'"— it is all right, so far— and that in about two years 'we might even hope to get some saving'". I would have thought that although it was not possible immediately to cut the staff, with the unification of the Defence Services the Treasury could use a much more definite phrase than we might even hope to get some saving". The idea of the unification of the Defence Services was not only to achieve more co-operation between the three Services; it was also to save manpower. I hope that the Financial Secretary will deal with that point.

Then there is the question of scientists. Many hon. Members have pointed out the importance of scientific brains in the Civil Service. It is most important that scientists should have contact with their counterparts in industry. I would have thought that there should be more and more liaison between Civil Service scientists and industrial scientists. In the Minutes of Evidence my hon. Friend the Member for Bristol, North-East (Mr. Hopkins) said: There may well be scope for certain loans of that kind. It is certainly not being done on an appreciable scale. That referred to loans from industry to the Civil Service and vice versa.

Exactly the same thing applies to statisticians. In the Report we came out fairly well regarding statisticians, who are in short supply—if I may put it in that way. The House will agree that any Government if they are to be efficient—I am not now arguing about the policies they adopt-must have an efficient statistical department. Governments take decisions on trends and figures, and it is essential that the figures should be up to date. It is no use looking at last year's fixture list when filling in this year's football pool coupon. This is sometimes the impression one obtains, and we might look to see that statisticians get more priority.

Organisation and method has been spoken about. In a matter of this magnitude O. & M. is extremely important. I may have got a wrong impression, but from reading the Report I do not think that O. & M. has had the emphasis it should have had. The training for O. & M. appeared a little scrappy. We may be able to call on industry in this respect for exchanges of O. & M. personnel. Anyone who has anything to do with organisation and method would agree that if one is doing O. & M. work day after day in the same sort of Department, or investigating the same sort of job, one comes not to see the wood for the trees, and outside experience is extremely valuable. We must not become too engrossed with O. & M. when doing the same job day after day, and interchanges with industry might be helpful.

I could not discover from reading the Report—perhaps the Financial Secretary may be able to help me—how O. & M. is checked within a Department. We read in the report that O. & M., and in some cases work studies, are held in Departments and certain recommendations are made. I should like to know how much money has been saved by some of these investigations. This did not come out in the Report. It would be a good idea to have a master plan of the units of O. & M. and what jobs or Departments are being investigated. The Treasury would know what its own O. & M. personnel were doing but it would not always know what the O. & M. personnel in other Departments were doing. It is necessary to have a master plan of what is going on.

One thing which emerged—and it was said by a witness—was that it is impossible for the Civil Service—we are talking now about non-industrial staff—to get any sort of comparison between offices. Many hon. Members work in offices and some may run offices. One of the easiest, simplest and probably the most naive way of working out whether or not an office is efficient is to work out the cost of typing and posting a letter. It is extraordinary how one can get some extremely interesting information in that way particularly if it is done occasionally during the year. Something like that might be done and different offices compared. I return to the fact that a programme and master plan is essential for staff inspections and O. & M. investigations.

With staff inspections and O. & M. certain recommendations are made, and I should like to be assured that someone sees those recommendations. I should like there to be a second opinion on the recommendations which are rejected. That might give a little more efficiency. I agree with my hon. Friend, who made a very interesting speech about computers, that we need more machinery and more computers in the Civil Service. I have never been able to understand why we cannot centralise some Government work which could be done by machinery. I am thinking, for example, of P.A.Y.E. calculations. The work in connection with road licences could be centralised, and B.B.C. licences as well if that is dealt with by the Government. Pensions could be dealt with by centralisation.

Another thing which I should like to know—perhaps the Financial Secretary can provide the answer to the first part-is how many computers are being used in the Civil Service and how many staff have been saved. My hon. Friend the Member for Aldershot drew attention to the fact that little was said about the industrial staff, which amounts to 263,000. I should have thought that work studies and O. & M. would be an absolute "must" for this section. My hon. Friend asked about value engineering and value analysis. These are important factors on the industrial side of the Civil Service. It did not come out in the evidence, and I wonder how many cost accountants there are on the industrial side of the Civil Service.

Throughout the Report the Treasury is paramount. In paragraph 9 it states: Your Committee have certain criticisms to make in detail, but they are more than satisfied that the Treasury must take the lead in bringing good management to the Civil Service". I do not think anybody would disagree with that. The hon. Member for Middles-brough, West (Dr. Bray) raised the question—not in the same way as I now propose to—of the Department of Economic Affairs and where this new Ministry fits in. If we accept the fact that the Treasury is paramount regarding Civil Service training, establishment and the rest of it, where does the Department of Economic Affairs come in? The House realises that staff recruitment could be delegated to senior executives, but the Treasury has always reserved the right to appoint senior executives. In view of the rather—I put it no higher than this—touchy relationship between the Treasury and the Department of Economic Affairs, it would be interesting to know whether the Chancellor of the Exchequer approved the higher executive appointments in the Department of Economic Affairs. It states in paragraph 16 of the Report: Although your Committee have recommended increases of delegated authority for certain grades and classes, they are convinced that the Treasury should retain responsibility for approval of the higher posts. I hope that the Financial Secretary will be able to give an answer.

Throughout the Report there is the question of nationality scrutiny and so on. Perhaps the next Report that we get on Treasury control of establishments will pay particular attention to the Department of Economic Affairs, if it is still in existence—or it may have by then taken over the Treasury. The future training of staff is essential and everyone would agree that the Centre of Administrative Studies is absolutely first-class. It seemed to be one of the regrets of the Committee that this could not be extended. There is a great scope for a staff college. There are great opportunities for expanding the work of this machinery.

We need to improve the Civil Service, and that is where there is a great dis- crepancy, to my mind, in interdepartmental transfers. I do not mean having a person for one year and then moving him on, but it is interesting to note the transfers between Departments which are given on page 166. It can be seen there that of 29 permanent secretaries seven had served in other Departments, of 67 deputy secretaries nine had, and so one could go down the list. The percentages are interesting. Of the permanent secretaries, 25 per cent. had served in other Departments and 12½ per cent. of the deputy secretaries had done so. When one gets to under-secretaries, assistant secretaries and principals the proportion is about 4 per cent. I have thought that something could be done here to ensure that more under-secretaries, assistant secretaries and principals serve in more than one Department.

Dr. Bray

Would the hon. Member tell the House how he reconciles the desirability of greater mobility with what I am sure he also has in mind—greater expertness? Are these not, in some sense, conflicting objectives?

Mr. Clark

If we want to get an overall picture of the Civil Service, what we have to remember is that—if I might put it coldly—if I go into the Civil Service today in Department A and stay there for the rest of my life until I retire I do not think that I would be as good as if I had gone into Department A for six or seven years and then transferred to Department B. There should be more transfer between Departments. Talking about leaving the Civil Service, a question to which the Committee drew attention was that of the possible retirement age of 50. This is too low for retirement, because most people are at their peak between 45 and 55.

I should like to ask the Financial Secretary whether we are losing too many of our unestablished Civil Servants. One thing which I could not understand in the Report was the fact that documentation of the established staff is centralised, but documentation of the unestablished staff is done, presumably, in the Departments. Of course, one does not want a huge amount of documentation for a typist who stays in the Civil Service for only six or nine months, but most people who go into the Civil Service and who are non-industrial staff invariably tend to stay there for some years. I should have thought that documentation in this field is so easy—if one uses a machine it is child's play—that one should keep documentation of not only the established but the unestablished staff.

While I am speaking about unestablished and established staff, I wonder how many jobs are duplicated when we are doing staff inspections, in whichever Department it may be. It is the fear, not only of us in the House, but of people outside, that too many people have duplicated jobs. By that I mean that one could have a man in Department A producing figures for some form or other and, in Department B miles away, another person doing precisely the same job. I should have thought that, in the control of establishments, it would not be a bad exercise to look into the question of co-ordination of forms, not only to relieve the public of many of these forms, some of which are duplicated, but to cut down the number of interdepartmental forms. I am sure that the Financial Secretary would agree that on many occasions a Department form goes from one Department to another when there is a common piece of information on each form. It needs only a little ingenuity to reduce the number. I do not know how many forms there are in the Government service and perhaps it would be unfair to ask the Financial Secretary to produce that figure, but whatever it is I am certain that it could be scaled down.

The Committee has done a first class job of work by producing this Report. I think that it shows the Civil Service to be a great career and an efficient service, but the Treasury control—which is what we are really talking about—must have only one ideal, and that is efficiency. By efficiency one means that we do not want any unnecessary work done which could be cut out. Can we in fact save manpower in the Civil Service by being more efficient?

We are talking only about the Civil Service here, but with the spending which any Government must do, with the block grant to local authorities and with little Parliamentary control over local authorities, I put it to the Financial Secretary that it might not be a bad idea to have a similar investigation into local authorities. We should remember that just under 100,000 people work in local authority offices. If it is right to have an investigation covering 600,000 people, I should think that it would be right to have one covering 100,000. Somehow, we must cut out the facetiousness of Parkinson's Law, though it is an interesting book to read. If we could, somehow, give a reward for a cut in staff, we would have achieved something which no other country in the world has achieved.

I should like to congratulate the Committee—and I am sure that the House will agree with me—on an excellent Report. May I personally say how very much I enjoyed reading the whole of this Report, No. 228? Although it was not like a James Bond novel, over the weekend it certainly made very interesting reading.

6.28 p.m.

The Financial Secretary to the Treasury (Mr. Niall MacDermot)

I, like other hon. Members who have spoken, welcome the opportunity to debate this Report. I should like to join in the tributes which have been paid to the Committee—and, in particular, to the hon. Member for Aldershot (Sir E. Errington), who chaired the Committee—for the work which it has done. I studied this Report with interest, care and, I hope, with profit, particularly as I am, as a relative novice to the subject, charged with Departmental responsibility for it. The Report contained a considerable amount of constructive criticism about the Treasury control of establishments, but it was gratifying to the Treasury, at least, to find that the Committee found no fundamental fault with the Treasury's methods of exercising that control. Nor did the Committee challenge—indeed, it endorsed—the doctrine that detailed responsibility must rest with the Departments, subject to certain exceptions, and with the Treasury's rôle and responsibility being one of guidance and of supervision.

This particular principle, as the hon. Member for Aldershot reminded us, was laid down in the circular in 1949, which resulted in a considerable change in what had gone before. It resulted in much greater delegation of authority to Departments. The Committee reaffirmed this principle and itself recommended greater delegation in its second recommendation. That is one which we have accepted, and already, in part, implemented. It is obviously a very nice question, calling for considerable tact, as to how exactly the Treasury is to exercise its responsibility of supervision and control over other Departments. It is the old problem that one does not want too much domination from the centre.

One wants to encourage a sense of responsibility among the Departments themselves but the Treasury is very conscious that it owes a responsibility to this House for seeing that there is adequate supervision over the work of the Departments. The scale of the problem is such that obviously the more that can be achieved in the spirit of partnership the better. We take the point that in a partnership there are senior partners as well as junior partners, but I do not think that it would be helpful or useful for me to try to discourse further upon that problem.

As the House knows from the Treasury observations published on the Report, the Treasury have accepted all, or nearly all, the recommendations, in some cases subject to qualifications. As is apparent from the many questions which I have been asked, the House would like a brief progress report on the stage which has been reached in relation to the various recommendations. I hope to be able to answer quite a number of the many questions which have been put to me. If I fail to answer questions, let me confess that in some cases it will be because I do not know the answer and in other cases it will be because I have simply overlooked answering them. If there are any in either category which hon. Members would like answered, I hope that they will get in touch with me after the debate. I shall be glad to see that their questions are answered. We in the Treasury welcome interest by hon. Members in our responsibilities in these matters and are very anxious to answer any questions.

May I also issue a general invitation to any hon. Member who would he interested by stating that I shall be glad to arrange either interviews with particular officials or visits to any establishments or Departments which they think would help them to get a better grasp of these matters. I paid a visit to the Centre for Administrative Studies and found it most rewarding. I am sure that most other hon. Members would find it interesting.

May I deal with the recommendations in turn? The first recommendation was that the April review of manpower should be abolished and that Departments should be required to submit their October returns in regular sequence. The first part of that recommendation has been accepted subject to the qualification that there are some half-a-dozen manpower ceilings which we find it necessary to continue to fix on a six-monthly basis. That is because they are Departments which are either subject to large fluctuations—for example, the Ministry of Labour, due to changes in the level of employment—or are subject to a steady and substantial growth or contraction.

On the second point, I can give the assurance for which the hon. Member for Aldershot asked—that there is now provision for a regular sequence in the October returns; instead of one closing date at the end of October, there are three—the end of October, mid-November and the end of November. Each Department knows precisely by which date it must get in its returns and we shall see to it that this is done.

The second recommendation suggested that there should be an inter-departmental committee to review arrangements for delegated authority. As stated in the observation, that review has been undertaken. It has been completed, and the level of delegation has been raised in a large number of cases. The amount varies according to the circumstances of the particular Department. I believe that the Departments themselves are generally well satisfied with the level of delegation, and, of course, the Treasury's control over the higher posts and over total numbers is maintained.

While I am on the point, may I reply to the hon. Member for Nottingham, South (Mr. William Clark). It is not a responsibility of the Chancellor of the Exchequer to authorise the most senior posts. This is done by heads of Departments, and in some cases by the Prime Minister on the advice of the head of the Civil Service.

The hon. Member for Aldershot asked for some more details of the amount of delegation. The position is that for second-tier Departments, those which have an Assistant Secretary substantially full time on establishment work, the level for the general classes has been raised to that of senior executive officer. In effect, this is only one step below the maximum level allowed for the major Departments, and in some cases this has resulted in an increase by two steps in the level of delegation. In the smaller Departments it varies greatly, but significant changes have been made and the position has been reached that there is at least some measure of delegated authority for all, even for the smallest Department. In the specialist classes, the Departments have been given an increase in delegated authority but generally within the limits set for the general classes.

The third recommendation was that there should be a regular, systematic examination by the Establishments (Complementing) Division every three to five years. We very substantially accepted that recommendation. The inspection programmes are being carried out, and the progress will be reviewed in the summer. I think that this meets the hon. Member's point about a master plan. In some cases, as was made clear in the Treasury observations, it will be sufficient for the inspection to be of representative sections of establishments, where Departments have many different establishments over different parts of the country performing the same, or roughly the same, functions. It is obviously necessary to preserve some flexibility in this matter so that we may concentrate on the areas in greatest need. Forf example, there is obviously a particular responsibility in respect of the newly-formed Departments.

The hon. Member for Aldershot asked what addition there had been to this Division. The answer is that previously there were four sections to it and that a fifth section had been added. I think that that gives some indication of the measure of the increase in strength.

The fourth recommendation objected to the proposal to allow the Diplomatic Service a fixed percentage of reserve manpower. That is a subject on which, naturally, a number of hon. Members have spoken, because it is one of the points in the Committee's recommendations which we were not able to accept. The Committee obviously feared that this new system would lead to extravagance and to some lack of Treasury control. As was explained to the Committee, for a long time there has been a reserve of manpower in the Foreign Service, and in the Commonwealth Service which has now been amalgamated in the Diplomatic Service. This reserve was to cover the special problems which those services have in providing for their requirements for travel, for training and for leave.

Obviously, while someone of the Foreign Service is coming home or is leaving his post for any of these purposes, and someone else is filling his place, two men cannot be carried on the same establishment, and someone has to be carried somewhere else. Since it is a fluctuating need, and no one can predict at any given moment exactly who will be required where in six months' time, one can do it only by a reserve pool. The old pre-Plowden system was that annually there would be negotiations and bargaining between the Treasury and the Foreign Office to try to establish what was the right level and to estimate for the future the right level for this reserve pool. As the Plowden Committee found, the result of that method was that the Foreign Service was being squeezed too hard by the Treasury. It made out a very powerful case that it needed a larger reserve.

I was asked how the figure of 10 per cent. was arrived at by the Plowden Committee. As far as I can make out, it is because the Committee accepted the requirement which the Foreign Office suggested at that time it needed, which was, I believe, about 400 in relation to a total establishment of about 4,000, which gave the 10 per cent. proportion. In any event, the Plowden Committee recommended that this was a matter which could be dealt with by finding the right percentage which was required for the reserve pool compared with the total size of the Service, and it suggested 10 per cent.

The Treasury felt that as the procedure which it had been adopting before had not proved satisfactory in practice, and since the Committee had put forward a recommendation for this system, it should be attempted and a trial should be given to it. The Treasury, however, did not accept the 10 per cent. limit suggested by the Plowden Committee. It felt that it was too high. The Plowden Committee itself suggested that the increase should be gradual—and we agree about that—and the position now is that the Treasury has agreed to a target of 7½ per cent. for this margin, as it is called— although I have referred to it as a "reserve pool".

It is being built up gradually and as far as I can make out slow progress is being made at the moment. In any event, I am assured that it is not thought that the 7½ per cent. target will be reached by the end of this calendar year.

Sir E. Errington

Would it not be possible to preserve some measure of control by arranging things on a functional basis; by realising that if holidays, courses, travel and so on are important matters, then allowances should be made in the form of estimates in order not to make a precedent of breaking away from the normal?

Mr. MacDermot

We do not intend this to be a precedent and I wish to make that perfectly clear. This is a special problem to deal with a situation which is peculiar to these overseas services. There is no question of it being applied to the home services in any form. I think that the answer to the hon. Member's question is that it would be possible, but that it would virtually mean going back to the old system. However, I wish to make it abundantly clear that there is no question of abandoning Treasury control. The Treasury will maintain control—and is doing so, in close consultation with the Foreign Office—about the build-up that is going on, and we want to try to find the right level.

The Treasury view is that it may prove that 7½ per cent. is not the right level. We are not tied to that figure and if we find, as a result of the supervision that is taking place, that a figure of less than 7½ per cent. will meet the case, the expansion will stop at that point. Equally, if the Diplomatic Service wants to go above 7½ per cent. it will have to convince the Treasury that that is justified.

In terms of numbers I think that it may be that the Committee misunderstood the total amount of the Diplomatic Service to which this provision applies. There is quite a large number of staff who will not enter into this calculation—that is, into the base figure. The 10 per cent. margin suggested by Plowden would have resulted in about 600 in the reserve pool, compared with about 300 in total for the Foreign Office and the Commonwealth Service before the Plowden recommendations.

The 7½ per cent. would mean a reserve of about 450 which, in effect, would be an increase of about 150 in staff at an average cost of about £1,000 per person, a total of about £150,000. As I said, that has not yet been reached and the situation is being closely watched. It is not a matter which can be dealt with, as my hon. Friend the Member for Fife, West (Mr. William Hamilton) rather suggested, by considering each individual case on its merits. The answer is, to sum up, that we must see how this operates, at the same time, I assure hon. Members, being mindful of our responsibilities by way of control.

Recommendation 5 was another which we were unable to accept. It was Defence and Overseas Personnel Division should be abolished, and its present functions divided among the specialist divisions set up … following the 1962 reorganisation. This recommendation has not been referred to at length by hon. Members today, so perhaps I can deal with it briefly.

It is not in the slightest surprising to the Treasury that the Committee was puzzled by the retention of undivided responsibility in this sphere when the 1962 reorganisation separated the functions of control, pay and establishment from those of control and supply in other spheres. The reason for it was because of special considerations which apply in the complex sphere of defence. Perhaps I can best illustrate it by some examples. The officers of the three Services are, naturally, closely integrated with the civil servants in the staffing of the Ministry of Defence headquarters. It is essential that the civilian complementing and the control of the senior Service posts should be dealt with in the same division. There then arises the problem that it is highly desirable that control of the senior Service posts should not be divided from the Treasury's general responsibilities for the size and shape of the Armed Forces. That, in turn, impinges on questions of defence policy, which are also the concern of the Defence Material Division.

We feel convinced that it is desirable that Service manpower questions should be handled in a single division which can work in close co-operation with other divisions. There is no lack of specialisation within the Division—there are sections specialising in particular subjects—and it keeps in close contact with the specialist divisions dealing with complementing and pay generally in the Civil Service. It is not an easy system to explain or understand without seeing it working on the ground, but we feel satisfied that it is working well and that the changes suggested would be likely to sacrifice more than they would gain.

Recommendation 6 was: A specific inquiry should be undertaken into the establishments of the reorganised Ministry of Defence … within two years. As the hon. Member for Aldershot pointed out, that is mentioned in the White Paper, has been accepted and will be put in hand. I was asked for further figures about this matter. The 1964–65 Estimates provide for a total headquarters staff at the Ministry of Defence of about 24,200. We expect that figure to fall by 1st April next to 23,650. The majority of those will represent a true saving, but some of the posts will be those which are moved from headquarters to out-stations. We also hope that the total of the United Kingdom based non-industrial staff will show a reduction of about 2,500 by 1st April compared with last year.

In regard to the specific inquiry recommended by the Committee, we think that it would be premature to put that in hand since the new organisation has been in existence for less than a year, but we intend to hold that inquiry within the two-year period.

Recommendation 7 I can pass over; it is about the form of the Defence Estimates, to which no hon. Member has referred.

Recommendation 8 is that work study units should be set up in all Departments employing large numbers of industrial staff, and has been referred to by a number of hon. Members. The Recommendation has been implemented. All Departments which employ large numbers of industrial staff have work study units—in particular, the Ministry of Defence and the Ministry of Public Building and Works is represented on the joint work study committee presided over by the Chairman of I.C.I. This is an example of the kind of co-operation going on in many spheres between the Civil Service and outside industry for the interchange of experience and information.

Recommendation 9 deals with … steps to stimulate the recruitment of scientists by producing a better career structure … and to encourage the transfer of scientists to the Administrative Class. This matter has been referred to by nearly every hon. Member who has spoken.

The first part of the Recommendation is still under examination, but I should like to make it clear that our reason for not yet having taken action to make changes to implement this Recommendation is not that we underestimate its importance in any way—quite the contrary. The position is that a special committee has been set up which is examining the whole structure and organisation of the scientific Civil Service. The Committee has on it a number of Government scientists, and at least two scientists from outside. Its report is expected in the spring, and it would obviously not be right to start making radical changes in the structure until we receive the report.

The Treasury welcomes the proposal for more frequent transfers of scientists to the Administrative Class. I can assure my hon. Friend the Member for Fife, West that there is no question of our regarding scientists in any way as second-class civil servants. However, there is a real practical problem which springs, I think, from the fact that most young scientists are not, by and large, keen to go straight into administration. They prefer to stick to science as research workers, teachers, or whatever it may be. It is at a rather later stage of their careers that we seek to encourage those who would like to, and who have the necessary aptitude, to move into the Administrative Class.

Movement in the opposite direction is exceedingly difficult. Whereas many scientists may have great capacities for administrative work, very few people who have not been trained as scientists will be of any use in trying to undertake scientific work.

The Treasury itself, however, initiated an experiment of transferring 13 scientists to the Principal grade of the Administrative Class for a trial period. I am told that the results of the trial have been encouraging and that this special exercise may be repeated before long. This does not in any way interfere with the normal existing arrangements, to which I have referred, for promotion to the Administrative Class of more experienced people in the Scientific Class.

Recommendation 10 deals with exchanges between the Civil Service and industry. I should like to say anything I can to dispel the illusion, which I know exists, that there is some reluctance on the part of the Civil Service to facilitate those exchanges. The truth is quite to the contrary—I have myself looked into the matter with care. There are, however, considerable difficulties on both sides. Obviously, the new Department of Economic Affairs has set an unparalleled example in time of peace for the kind of co-operation that can exist, one hopes with real benefit to the nation, between people who have had Civil Service training, on the one side and, on the other, those who have had experience and training in outside industry.

Apart from what is happening in that Department, loans have been made by both the private sector and nationalised industry to the Administrative Class of the Civil Service. Exchanges have also taken place in the professional and scientific classes. These are for shorter periods and are more frequent. There were over a hundred such exchanges between 1961 and 1963. In addition, civil servants take part in many courses, dealing with management and other questions, which are attended by people from industry outside and these, again, provide many opportunities for the interchange of ideas and experience. The courses at the Centre for Administrative Studies include tuition in business methods by business men and the students visit businesses.

We are anxious to increase these interchanges whenever we can, but the difficulties on both sides are considerable. If this kind of interchange is to be valuable, one wants to get people into fairly key positions where they can get a view of what is going on in the organisation as a whole, and not be lost in some little side department, as it were. It is not easy for industry to spare people of that kind or to provide real scope on a temporary basis for people coming from outside, but we are extremely grateful for the co-operation we have received from industry, and hope that it will continue and expand.

Recommendation 11 is that O. and M. branches of Departments should be required to submit a forward programme of their assignments, so that the Treasury could take part in them if it wanted to. That is being done. We are being supplied with information, and joint surveys are going on with a number of Departments.

Recommendation 12 is that the Organisation and Methods (General) Division should undertake planned reviews of all Departments. Again, this recommendation has been accepted. We have concentrated on those Departments which have not been reviewed for some years, and we are selecting assignments after consultation with heads of Departments, which meetings are likely to prove most fruitful. The hon. Member for Nottingham, South suggested that there should be interchanges with industry. From my own inquiries, I think that there is a very high standard in the O. and M. field in the Treasury, and very close contact with what is going on in outside industry. If the hon. Gentleman is interested to follow that up further, I am sure that we could arrange for him to be informed of what is going on.

Recommendation 13 is that the Management Services (General) Division in the Treasury should be reviewed in order to enable it to carry out a wider range of investigations. This has been done. The Division has been made more flexible. Some four more schemes have been put in hand in the last six months, and several more are in the preparatory stages. As the hon. Member for Aldershot surmised, the Division has been heavily engaged as the result of the setting up of the new Departments under the present Government. The hon. Gentleman asked what strengthening there had been to the Division. The answer is that another principal has been added to the strength of the Division.

Sir E. Errington

I am grateful to the hon. and learned Gentleman for answering so many questions. There is one outstanding matter which is of great interest, namely, the decision on the Committee's Recommendation dealing with a staff college.

Mr. MacDermot

I am coming to the staff college. I am afraid I am taking a long time. There are about three other general questions which I was asked which I have left to the end. One was about the Report of the Joint Working Party on the Whitley Council on Training. This was received in the autumn and a number of proposals which were made have been put into effect. The question of a Civil Service staff college, which was alluded to by the Committee, was raised in this Report. It will be examined further in relation to the long-term future of the Centre for Administrative Studies.

The hon. Gentleman asked what changes had been made at the Centre since the time of the Committee's inspection. The course for assistant principals has now been modified. Assistant principals now attend a three-week course on the structure of government within the first six months of their entry into the Service. Then in the third year of their service they attend a full 20-week course, the main subjects dealt with being economics, statistics, mathematical and other new techniques of administration. In addition evening lecture discussion sessions are being arranged during the winter for students who attended these first two courses so as to keep them up to date. There is no doubt—experience has shown—that these courses for the two years they have been going are well worth while and repay the fairly long absence of the students from their Departments, which was commented on by the Committee.

With regard to other courses which were suggested, it is hoped that a minor extension in this year may be for about 20 members of the principal grade of the Administrative Class to be added to the Centre's training with a six-weeks' course in economics. The Committee also suggested that there should be, perhaps, similar training for the Professional, Scientific and Technical Classes. We are not sure whether a course of a similar nature to the one which has been given to the Administrative Class would necessarily be useful. The Working Party examined this question and suggested that there should be an induction course within six months of entry for new entrants to acquaint them with the Parliamentary and financial machine within the scope of Departments. The Working Party suggested that they should later receive management training alongside principals and senior executive grades. These recommendations are being considered.

A number of hon. Members asked questions about computers. They asked, in particular, how many computers were in use. I am not sure that all those who referred to this question realise the extent to which computers are being used in the Civil Service or, indeed, the extent to which the Civil Service can almost claim to be the pioneers in this country in the use of computers. Owing to the scale of its operations, much Civil Service work is peculiarly suited to the use of computers and, therefore, the Civil Service is merely doing what it should be doing in setting a lead.

The Committee was informed in evidence at the end of December, 1963, that there were 32 computers installed in Departments for office work, seven on order, two out to tender and a possible requirement for 21 more up to 1967. To bring those figures up to date now, at present there are 41 installed, 10 on order and a possible further requirement for 42 by 1970, including one in the Aliens Department of the Home Office, which was referred to by my hon. Friend the Member for Glasgow, Govan (Mr. Rankin), who has explained to me that he could not be here to the end of the debate.

Hon. Members may have noted a reference in the Press recently to the fact that the Treasury has received an approach from the National Staff Side of the Whitley Council arising out of the Joint Statement of Intent.

Dr. Bray

Can my hon. and learned Friend reconcile his statement that the public service is in many ways a pioneer in the use of data processing with the fact that the Treasury does not have one computer and makes very little use of computer services?

Mr. MacDermot

My hon. Friend made some rather surprising statements during the course of his remarks. He quoted a phrase of a Treasury official which he said tended to make him and his like climb up the wall. If some of the silent service could comment on some of my hon. Friend's remarks, they might say that they tended to make some of them climb up the wall. An enormous amount of statistics is used and worked upon by the Treasury which is compiled by computers from other Departments. For example, the Department of Customs and Excise, which was one referred to to by hon. Members opposite, already has a computer. The Department collects and processes very important statistics for the Board of Trade and the Treasury on the whole field of exports and imports. I do not think that the picture which my hon. Friend gave to the House in this respect was altogether a fair one. I shall be glad to supply my hon. Friend with further detailed information if he wishes.

I was referring to the approach we have had from the national staff side following the joint statement of intent. This was a suggestion that there should be a new drive throughout the Civil Service to remove obstacles to efficiency. This was an approach which I welcomed immediately and warmly and I am sure that the House will be glad to hear that discussions have already started following that initiative from the staff side.

I have already spoken for too long, and I am conscious that I have left many questions unanswered. I invite hon. Members to get in touch with me if they want more detailed answers.

The general subject of the debate is a very difficult one, that of finding what is the right balance of the extent of Treasury interference in other Departments in exercising its responsibilities of control. It must be a flexible system. It must involve a considerable degree of delegation. There are, as the debate has shown, many new developments coming along in mechanisation, in training, and in all aspects of personnel management.

My own impression and, I think, that of most of my colleagues in the Government is that the flexibility of the Civil Service machine and its capacity to meet challenges has been admirably demonstrated in the pressures to which it has been subjected by having a new Govern- ment coming into office who have made considerable changes in the whole machinery of Government in Whitehall. Further, the Civil Service is put under immensely high pressure by all the reviews which take place immediately a Government come into office. No doubt this experience has also shown up weaknesses and deficiencies which can be dealt with and corrected in the future.

In any event, whatever personal impressions I or my colleagues may have formed, I know, as I said at the outset, that it has been gratifying to the Treasury to find the general line of its action and policy endorsed by the Committee's Report.

Question put and agreed to.

Resolved, That this House takes note of the Fifth Report and of the Ninth Special Report from the Estimates Committee in the last Session of the last Parliament relating to Treasury Control of Establishments.