HC Deb 21 May 1990 vol 173 cc144-52

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Fallon.]

12.8 am

Mr. Henry McLeish (Fife, Central)

I am grateful for the opportunity to discuss executive agencies in the Department of Employment, because this evening we have debated parliamentary sovereignty, democracy and accountability, and executive agencies raise a number of similar issues in the mother of Parliaments. I shall briefly spell out some of my general concerns about the agencies and the problems of parliamentary accountability and then describe in a little more detail some of the major concerns that trouble me and my hon. Friends.

It is too easy to talk in abstract terms about accountability within this House. Executive agency status—the most recent development in the Department of Employment—raises significant parliamentary and constitutional questions. Despite discussions in the House over the past 20 or 30 years on the hiving off of Government Departments or parts of them, the Department of Employment has probably seen more changes than any other. Although the issue of executive agencies is not topical at present, it bears examination because of current activities.

My concern is not about the substantive issues, whether or not there should be executive agencies, or their particular merits or demerits. Nor do I want to discuss the details of how their financial aspects are scrutinised. Nor will my remarks relate to the wider implications of privatisation, hiving off, and creating new agencies within the totality of Government policy.

My central concerns are these. Recent developments in the Department, especially executive agency status, pose serious threats to Parliament's ability to obtain the information necessary to ensure proper public debate of specific issues. Also, I want to ensure that Parliament can effectively oversee the Department's work, especially in relation to the labour market, which is crucial to economic employment, and the client. Government documents make extensive mention of client service. Finally, proper scrutiny of public expenditure is also threatened.

It is important to highlight the context within which the Department became an executive agency. One is talking about thousands of staff and an enormous number of clients being dealt with every day. One is talking also about £1 billion of expenditure. It is a substantial part of both the civil service and the employment group.

Inadequate consideration has been given to parliamentary accountability. In a day and age when the Executive has increased power to do as it wishes within Parliament, there is also growing pressure on the parliamentary timetable—which often does not permit debates on issues of major significance. I hazard a guess that, after 11 years of the present Govenment, the Executive at times shows more than just a hint of contempt for parliamentary scrutiny and accountability.

This is a time when that accountability should be strengthened, not weakened. My contention is that the activities currently being undertaken by the Department in line with Government policy could lead to a further weakening of parliamentary accountability. I feel sure that right hon. and hon. Members in all parts of the House agree that that has been an important part of this Chamber and of Parliament, and I hope that the Minister will address it.

The Department is currently dealing with a range of extremely sensitive and, in my view, provocative issues. There is always the danger that behind the establishment of executive agencies which are clothed in value for money, efficiency, targeting, output and performance, there is more than a hint that the Department—the Minister grimaces—is obscuring, or failing to reveal, information that should normally be put before Parliament because of the sensitivity of certain policy changes.

I cannot let the opportunity pass without talking about the crisis in training, which the Minister of State will consider in detail following the establishment of the training and enterprise councils. The Secretary of State is a little concerned about their budget, but the Minister will do an honourable job in ensuring they have more cash to spend, because a shortage of cash lies at the root of their problems. There is wide concern about the role of the executive agency that is symptomatic of wider trends in the past, especially in relation to the Department of Employment.

I said earlier that the hiving off of Departments and sections is not new. The Fulton committee was set up in 1966 and reported in 1968. Since then, a range of issues and ideas have been debated and discussed a bit more vigorously under this Government than under previous Governments. The "next steps" report was issued prior to the 1987 election and is being implemented by the Government. Even when the Fulton report was published in June 1968, paragraph 145 referred to the point that we are discussing: To function efficiently, large organisations, including government departments, need a structure in which units and individual members have authority that is clearly defined and responsibilities for which they can be held accountable. There is a complex relationship between the Minister and the executive agency and between the Minister and Parliament. That is the important part of the triangle, which seems to be lacking in the consideration of the Government and the employment group. The initial concern that was flagged in discussions in the 1960s permeated much of the thinking in the 1960s, 1970s and 1980s.

We must now look more clearly at the implications of the Government's attempts to change dramatically the nature of the civil service. I referred earlier to the abstract nature of the service. Parliamentarians like to discuss accountability, often in a vacuum. We need something tangible on which to hang the considerations that I have outlined tonight.

The Department of Employment provides an example of what has been happening and what is likely to happen. The past decade has seen the setting up of the Manpower Services Commission, which was futher developed into the Training Commission and is now the Training Agency. The Health and Safety Executive was established, as was the Advisory, Conciliation and Arbitration Service. In embryonic form, we can see developments similar to the executive agency, although they have distinctive characteristics.

The Department of Employment started early in having organisations one step removed from Parliament. The executive agency is a logical step forward, although a much more major and significant step than any of those that I have described. I think that is crucial, because the process has been continuing and because it has accelerated in the past, that we have reached a stage where the point of accountability becomes much more significant.

What about the practical issues that face the Department? I should briefly like to highlight some of the practical concerns that I have, starting with the executive agency which was established on 2 April. Curiously, on the simple point about asking parliamentary questions, we found that questions were, in the first stage, answered by the Minister, who said that they would be referred to Mr. Mike Fogden, the agency's chief executive. In turn, Members received a reply from Mr. Fogden.

The confusion lying behind this process reinforces my concern that, although the issue of the substantive policy detail has been reasonably worked through within the Department of Employment, parliamentary accountability has been an afterthought. This was highlighted in the sequence of events. "Employment Service: A framework Document for the Agency" was issued for discussion. Paragraph 4.3 stated: The Secretary of State will continue to answer questions from Members of Parliament on matters concerning the Agency, but will encourage them to contact the Chief Executive or other appropriate Agency managers direct on individual cases or operational issues". On 8 November, speaking before the Select Committee on Employment, Mr. Mike Fogden was asked: When you become an executive agency on 2 April, how will this limit the ability of MPs to ask questions about the operation or your service? Mr. Fogden replied: In no way at all. On 8 January 1990, in the debate on the Government Trading Bill, the Minister argued that Members will get a quicker response and be likely to resolve any follow-up points more quickly and to their satisfaction by going direct to the agency".—[Official Report, 8 January 1990; Vol. 164, c. 774.] That was a reference to the accountability of Ministers. On 30 March, the Minister of State wrote to all Members, saying: Ministers determine the policy objectives of the Employment Service. We remain answerable to Parliament for the Agency's activities. We will continue to answer questions on the policy aspects of the Agency's work". We cannot get a higher authority than the Prime Minister who, responding to a question by one of my hon. Friends, said: Ministers remain fully accountable to Parliament for all the work of their Departments. However, hon. Members may often wish in the first instance to deal directly with agency chief executives … and I would encourage them to do so."—[Official Report, 15 May 1990; Vol. 172, c. 375.] When the agency was established on 2 April, there were no hints that constituency business would go direct to it. The crucial issue of parliamentary questions has not been highlighted, and there has been departmental incompetence.

If a Member tables a parliamentary question, the Minister responds by saying that the request has been given to the executive agency, which writes to the Member. That Member receives the answer, but what about the other Members who do not see the now personal reply, and what about the House of Commons Library, which is a tremendous source of information for many bodies, especially hon. Members? It is in a state of confusion because it does not know whether it is receiving parliamentary replies.

The matter has perhaps not been fully thought through. If it has, and we have reached this stage, there is something fundamentally wrong with the way it has been handled by Ministers and the Department of Employment. If the executive agency difficulties were the only ones, they could be tackled almost immediately because of the fairly practical problems, but what about TECs in terms of parliamentary accountability?

On Tuesday 8 May, my hon. Friend the Member for Clydebank and Milngavie (Mr. Worthington) asked the Secretary of State for Scotland about his practice of making information on local enterprise companies available. The Minister of State, Scottish Office replied: Final decisions have yet to be taken on the range of information about training programmes which local enterprise companies will be required to collect. It is useful to remember that the LECs in Scotland will be the sisters of the TECs in England and Wales. The Minister of State continued in his reply: When these decisions have been taken I shall write to the hon. Member with a detailed list of information … My right hon. and learned Friend will make such information available to hon. Members provided that it is not commercial in confidence or personal information about individual trainees."—[Official Report, 8 May 1990; Vol. 172 c. 67.] That means that commercial information is now being examined and discussed privately with TEC and LEC chairmen but is not coming before the House for discussion. Again, we shall have to await a ministerial judgment on whether hon. Members should have access to the information. That illustrates a gross contempt for the whole issue of accountability, and suggests something even more sinister. An hon. Member requiring information about a TEC or LEC may have to write to its chairman; if he requires information about 80 TECs, he may have to write to 80 chairmen. I hope that the Minister will reassure me on that in his reply.

My final question concerns non-statutory training organisations. We have had representations from the engineering industry training board about the lack of information and accountability in the hiving off of what were previously the training boards.

There are grounds for concern. I have targeted the key practical issue of how parliamentary questions concerning the executive agencies are answered, but it is time that the Minister answered our questions. I hope that the Minister will scrap the present method of responding to parliamentary questions for the executive agencies. There is nothing binding him to the present inefficient and bureaucratic method, given that the Department is still responsible, through the Minister, for the replies.

I hope, too, that we shall have an early statement on the Floor of the House in reply to our questions on the future of the executive agencies and their accountability, the future of TECs, the future of the non-statutory training organisations and a host of issues concerning the proper scrutiny of the executive. I am afraid that, at present, many hon. Members are worried by what is happening, and I hope that the Minister will take seriously the points that have been made.

12.27 am
The Minister of State, Department of Employment (Mr. Tim Eggar)

It is a pleasure to see the hon. Member for Fife, Central (Mr. McLeish) speaking from the Back Benches for a change. I thank him genuinely for the spirit in which he opened the debate. I know that he has had problems with responses to parliamentary questions intended for my Department and I am extremely grateful to him for the constructive way in which he raised those problems with me. I have no hesitation in saying that we have learnt lessons from our discussions with him and I am sure that that is in his interest as much as it in ours. That is the right way in which to take these matters forward. In the limited time available to me, I shall try to respond to his questions. If he feels that some matters need further discussion, I shall be happy to discuss them at a time that is convenient to him.

As the hon. Gentleman said, the employment service is only one of a number of agencies that have been established under the "next steps" initiative announced by my right hon. Friend the Prime Minister in February 1988. The aim of the initiative is well known: it is to improve the delivery of Government services to the customer and to increase value for money for the taxpayer, as well as achieving greater openness and accountability in government. The employment service is the largest agency so far and one whose activities are understandably of great concern and interest to right hon. and hon. Members.

It is not surprising, therefore, that the arrangements for dealing with questions and correspondence for the employment service are a matter of interest. But it should be borne in mind that "next steps" agencies are now established across the whole civil service. There are 31 such agencies covering about 70,000 staff, and many more are on the way. The arrangements that we have adopted for the employment service are in line with the Government's approach for agencies and they are intended to be helpful to the House in pursuing its concerns.

The Government have kept the House informed about their approach in a number of ways. The Government have explained that we are enhancing the arrangements for accountability in important ways, for example, through the publication of a framework document, the publication of agencies' objectives, and annual reports of their activities. We have also emphasised many times that Ministers remain fully accountable to Parliament for all the work of their Departments, including agencies.

However, we have set out our view that chief executives, who are accountable for the day-to-day operations of their agencies, are the best people to approach on matters for which they have delegated authority. Because of that, we have encouraged right hon. and hon. Members to deal direct with agency chief executives over inquiries about operational issues. That will include many of the matters raised with them by their constituents.

My right hon. Friend the Minister of State, Privy Council Office, who has responsibility for the civil service, explained this approach to the House in January during the Second Reading of the Government Trading Bill. Last week, my right hon. Friend the Prime Minister dealt with the issue in a written reply and encouraged right hon. and hon. Members to approach agency chief executives on operational issues because they are best placed to respond promptly and effectively.

I should also remind the hon. Member for Fife, Central, and the House, that in many ways this is not a new or unusual procedure. On many occasions in the past Ministers have answered to the House for general policy and expenditure about a programme or service, while an executive body has had primary responsibility for its delivery. In such cases, it is not at all unusual for right hon. and hon. Members to deal with the executive head over operational and constituency matters.

I am grateful to the hon. Gentleman for giving me the opportunity to remind the House of the arrangements for accountability in the employment service. We thought long and hard about this matter, and are determined to ensure that the new arrangements are fully effective. Right hon. and hon. Members will recall that I wrote to them on the launch of the agency, enclosing a booklet entitled "The Employment Service: The Handling of MPs Inquiries and Parliamentary Questions". That booklet was drawn up by the employment service, and approved by Ministers. It sets out the way in which hon. Members' inquiries and parliamentary questions would now be handled. I am happy to recall for the House the main elements of the system.

The main change in accountability arrangements has been in the way in which correspondence from Members is handled. In line with the general approach that I have already outlined, hon. Members are now encouraged to take up queries and complaints on operational matters with the agency chief executive. Under the new arrangements for correspondence, hon. Members will find that they will get a quicker response to their inquiries and to any follow-up points that they may wish to pursue. That is certainly one of the strongest elements of the "next steps" approach and I would like to think that when hon. Members have become accustomed to this system they will prefer to approach the agency's local managers or chief executive rather than come direct to Ministers on operational matters.

As parliamentary questions caused concern to the hon. Member for Fife, Central, perhaps I could explain how the new system will operate. When a question is tabled, the Minister decides whether it is a strategic, resource or operational matter. The decision is then taken by Ministers whether the parliamentary question will be answered by Ministers substantively or referred to the agency for reply.

If Ministers decide that the question is suitable for a response by the chief executive, a reply is sent to the right hon. or hon. Member explaining what has been done. The agency chief executive then aims to send a full reply as soon as possible. Very often that will occur on the same day as the reply from the Minister. As the hon. Gentleman now knows, the chief executive will offer to place a copy of the reply in the Library if the hon. Member so wishes.

Mr. McLeish

Why has that not happened?

Mr. Eggar

If the hon. Gentleman says that that has not yet been done, I am surprised. However, I assure him that my Department's policy is that the hon. Member concerned will be asked specifically whether he wishes a copy of the reply to be placed in the Library. We have adopted that practice because we recognise that many matters of a constituency or personal nature will be of interest only to specific Members and therefore the procedure should not be automatic.

I hope that hon. Members can appreciate how much more quickly they can get operational information from the chief executive rather than through approaching Ministers via the House. The system is designed to ensure that hon. Members deal direct with the person—be it a Minister on policy matters, the chief executive, or the local manager—who is best placed to answer on the matter in hand that concerns the hon. Member. Above all, Ministers will continue to be responsible to Parliament for the employment service and will answer to hon. Members on any issue in debates relating to the employment service.

Ministers will also continue to reply to correspondence from hon. Members on strategic policy and overall resource allocation. Furthermore, we undertake to answer letters from any hon. Member who feels that he or she has not had a satisfactory answer from the employment service on operational issues.

The employment service will continue to be subject to the Parliamentary Commissioner for Administration. The permanent secretary will consult the chief executive about replies to complaints going through the Parliamentary Commissioner.

The hon. Gentleman also asked about the arrangements that have been put in place for handling hon. Members' inquiries and parliamentary questions about TECs. My right hon. and learned Friend the Secretary of State wrote to hon. Members on 2 April, enclosing a booklet explaining that in detail.

TECs, of course, are not "next steps" agencies, but private companies operating under contract to deliver the Government's training and enterprise programmes. Thus Ministers are able to set them clear objectives and targets while allowing them considerable flexibility in how they achieve those objectives and targets—for example, as the hon. Gentleman is aware, in choice of training providers. That will enable TECs to provide programmes in the most cost-effective manner and to tailor them to meet local needs. I am sure that the House welcomes that development.

Ministers will continue to answer to the House on overall training and enterprise policies, for the public funds made available to TECs, and, of course, for the contracts that govern the relationship between the Government and TECs.

The main change in accountability arrangements is that all correspondence sent to Ministers on matters that fall within the flexibilities allowed for TECs will be referred to them to answer. TECs are private companies, and it is right that they should answer on the matters that are under their discretion.

I stress to the hon. Gentleman and to the House that we are always available and willing to explain how the Employment Department group operates. To that end, I shall shortly be contacting hon. Members inviting them to a series of presentations and discussions on the workings of the Employment Department. We hope that those presentations will help right hon. and hon. Members better to appreciate the implications of the changes that we are setting in hand. We shall be asking local managers to explain how hon. Members can tap into their local Employment Department group network for advice and help for their constituents. We shall also be making available individual briefing packs containing information about the Department, its activities and contact points in hon. Members' own constituencies.

I hope that right hon. and hon. Members will take this opportunity to become better acquainted with the "delivery end" of the Department of Employment. We are determined to improve the quality of service that we offer, not only to our many clients but to hon. Members who want to appreciate the way in which we are delivering services and what we can do to help them and their constituents.

I hope that I have been able to explain clearly to the House what the new arrangements are. All the developments are part of a move towards increased effectiveness and ensuring continued accountability to this House.

Question put and agreed to.

Adjourned accordingly at twenty-two minutes to One o'clock.