HL Deb 05 December 1984 vol 457 cc1318-30

3.10 p.m.

Lord Boyd-Carpenter rose to call attention to the importance of an efficient and dedicated Civil Service; and to move for Papers.

The noble Lord said: My Lords, the terms of the Motion are, I hope and believe, not only anodyne, but uncontroversial. Indeed, as I was reflecting on what I was to say this afternoon, it almost occurred to me that they might be subjected to the criticism which some of your Lordships may remember was applied to the speeches of his late Majesty King Louis Philippe of France, of whom it was said that his daily prayer was clearly: "Give us, O Lord, our daily platitude". The Motion nonetheless, contains one word of significance, the word "dedicated". The intention behind that word is to try to put out a marker at least for the point of view that those who in our public service serve the Crown and the community, rightly have demanded of them a very special degree of loyalty and of devotion.

On any view, the Civil Service is a major element in our system of government. Indeed, those of your Lordships who habitually watch that extremely entertaining television programme "Yes, Minister" might well draw the conclusion that the Civil Service was our system of government. Only perhaps those who have looked at that a little more critically may reflect that, on the contrary, the truth of this kind of matter is best expressed in Bernard Shaw's play The Applecart, in which some of your Lordships may remember the point was made that real power is exercised in any system of government by those who have the brains, the determination and the courage to operate it.

Having said that, the Civil Service is obviously a major element in our system. It employed on the 1st October 1984—the latest date for which I have the figures—some 617,000 people, of whom, in round figures, half a million were in the non-industrial Civil Service and the rest in the industrial. That is, in fact, a substantial reduction below the figure for the 1st April 1979, when the total had risen to 732,275. It still employs, however, 2.38 per cent. of the working population of the country. Despite the reduction in its size over the last five years—a reduction which your Lordships may be interested to know has saved some £700 million a year net in public expenditure—the pay bill for the Civil Service stands at the latest figure of £5.35 billion.

We should, I am sure, debate this afternoon the affairs of a service which directly and indirectly affects the lives and livelihoods of every one of our population from the cradle to the grave or, perhaps, to put it in more appropriate language, from the maternity grant to the funeral grant, and the more so because the Civil Service shares with individuals in politics and public life the uneasy distinction of being very frequently the butt or the subject of criticism of the media of publicity. Your Lordships will be only too familiar with the rather jejune attacks on the service as being bureaucratic—whatever else a service that has to act from its desk can be, I do not know—and also with the traditional and wholly out-of-date picture of the civil servant as being somebody wearing striped trousers and carrying a neatly rolled umbrella. That again, of course, disregards not only sartorial change, but the significant fact that only 5 per cent. of the total membership of the service actually work in the Whitehall departments, of which that is supposed to be a picture.

The service, however, does expose itself from time to time to a certain amount of ribaldry by its use of the English language. I should like to remind your Lordships of two of my own favourite specimens of this, the first of which I think would have a great appeal to the noble Lord, Lord Jenkins of Putney; or would have had, had he still been in his place. This is a notice: In the event of a major nuclear attack, the county libraries will be manned only by a skeleton staff". Then there is the Department of Employment circular of a year or two ago which delicately, or perhaps indelicately, stated: Approximately half the married people in this country are women". But to pass to more serious aspects, I think those of us who are concerned with the welfare of this great service are increasingly conscious that all is not very well with it. There was a very thoughtful and intelligent article on this topic in the Financial Times last week. The article brought out the point that many of the ablest men and women in the service were leaving it and going into the private sector—either industry or commerce. The Financial Times writer attributed this in part, rather interestingly, to the lack of respect and prestige which it was thought the service now surfers from; in other words, they thought that they were insufficiently appreciated. It is certainly the fact that recruiting of the ablest men and women in the universities for the highest grades of the service is increasingly difficult, although in times of unemployment recruiting generally for the service does not present any particular difficulty.

There is then what is, to me, the very distressing growth of what is called "industrial action" inside the service. The expression "industrial action" is, of course, a misnomer—if it means anything, it means industrial inaction—but it is the conventional phrase that is used to indicate either strike action or action short of strike action which involves not doing all one is expected to do.

The particularly painful example—and I must confess to your Lordships, having been involved in the department concerned for some six-and-a-half years, it is a very painful one for me—is that of the long- drawn-out industrial action in the Department of Health and Social Security's offices at Long Benton, near Newcastle. Certainly in the six-and-a-half years that I was there—now, I am sorry to say, many years ago—it never occurred to me that the devoted public servants there, who seemed to be immensely concerned with their important job of relieving poverty and hardship, would ever, in pursuit of their own claims or their own interests, come to the point of actually harming those who they were expected to look after. This is an extremely distressing phenomenon, and it is not, of course, the only one.

Computerisation has, of course, enormously increased the effect of quite small industrial inaction in as much as, if a number of key people come out and disrupt the computer system, an enormous area of work is disrupted. That is what has happened to some extent, I understand, at Newcastle, and also in one or two other directions.

That, combined with these other incidents, leads to the first suggestion that I want to make to my noble friend the noble Earl on the Front Bench for consideration when he comes to speak either shortly or at the end of the debate. It seems to me that these various factors which I am trying to outline underline the importance of moving into a no-strike agreement in certain sections of the service which are important to the community, either because of the harm to individuals which can be done by disruption of them, or because of questions of national security and the like.

One must accept that if individuals are recruited and join on a basis that no strike action will take place, there must be compensatory arrangements in their favour. It can of course be said that regular members of the Civil Service have two very considerable advantages over most of their fellow citizens. They have a very high degree of security of tenure and they have the certainty, at a fairly early age, of an indexed pension. But I do not think that one can quite duck with that the question of pay. If individuals are to be induced—and it seems to me clearly that this would have to be done voluntarily—to accept terms of service which absolutely exclude strike action, there must be some reasonable mechanism for determining their remuneration. Otherwise, they may fear that some Government, some day may treat them badly.

I do not wholly follow the Megaw recommendations, but I think that it might be possible for those who are on no-strike terms to be distinguished from the rest of the service by having a form of arbitration which, while not wholly and compulsively binding on the Government of the day—I think that the Government of the day, with their responsibility for the economy of the country, must always have the last word—would be difficult for them to override. I put this just as a suggestion. If a Government wished to reject arbitration in these cases, they might be compelled to lay a statutory instrument, subject to the affirmative procedure in both Houses. In my experience and that of many of your Lordships, that is a very considerable discouragement for a Government to do anything of the sort.

The no-strike concept is, I think, reinforced when one reflects on the power which the service, or many members of it, have over the individual citizen. There is the Inland Revenue. Seeing the noble Lord, Lord Houghton of Sowerby, I recollect most gratefully the way that he, as secretary of the Inland Revenue Staff Federation, handled the affairs of those important people. But they have very considerable power over the citizen. One always thinks in that connection of the old saying: To tax and to be loved, no more than to love and to be wise, is not given to man". There is the Customs and Excise; there are the staff, as I have already mentioned, of the DHSS, the staff of the Department of Employment, immigration officers and many others who exercise direct power over the citizen.

I am aware that in most of those cases the citizen can, if aggrieved, go to the courts. As your Lordships know, the courts of law, like the Ritz Hotel, are open to all, but the financial risk of taking on a major Government department in the courts amounts to a considerable deterrent to an aggrieved citizen.

Therefore, when one has people such as this exercising real power over other individual fellow citizens, it is not only indecorous—I think that is too weak a word; it is surely wrong that those individuals who exercise with a very wide discretion these very considerable powers over all of us should be in a position that they might quite suddenly decide to abandon their duties in order to pursue some claim of their own. I ask my noble friend to indicate what is the Government's thinking on this issue of a no-strike arrangement.

That leads me, if I may, briefly, but I think inevitably, to the GCHQ situation. It seems to me that the simple problem there—simple to state and difficult to handle—is that if an ouside trade union is properly to represent the affairs of its members, it must know what their work is, what they are doing, and what their conditions of service are. As necessarily the officials of the unions concerned have not been security vetted, they may be, with the politicisation of the unions, of very extreme political views. It is extremely difficult for any Government concerned with public security to allow the ordinary system of trade union representation in a high security institution such as GCHQ. My only criticism—I realise that it is probably the converse of the criticism of noble Lords opposite—is that the Government did not get on with that and do it some years ago.

I shall pass quickly to my two remaining points. The first is the necessity of maintaining the political impartiality of the service, which is its old, long and honourable tradition. When Sir Winston Churchill appointed me Financial Secretary to the Treasury in 1951 I inherited the private secretary who had previously been serving my Labour predecessor, Douglas Jay. He served me, as he served Mr. Jay, with absolute loyalty. He was a very distinguished official, who, I am happy to say, is now Permanent Secretary to the Department of Energy. But to this day, although he is an old friend, I have not the faintest idea what his political views are.

I must not touch on any issue which is at the moment sub judice, but there is some indication in some directions of impatience among those in the service with the political neutrality which their job imposes on them. I can speak with a little understanding of this. When I first came into your Lordships' House I was chairman of the Civil Aviation Authority and bound by the same rules of political impartiality as a public servant. I would on occasions sit here listening to your Lordships without being able to yield to the temptation of intervening, although I am happy to recall that those who advised me said, on the other hand, that facial expression was not excluded—a freedom of which I am bound to tell your Lordships I occasionally took full advantage.

A point that I want my noble friends to think about and say something about is the age of retirement in the service. The Diplomatic Service has a rigid age of 60, though the Prime Minister, to her credit, broke that not long ago in order to send an extremely able man to the Washington embassy. In the Home Service in the days when I had responsibility for the service I managed to loosen the rigid 60 age limit into a retirement zone after 60. But with the increased expectation of life and the increased efficiency of medicine, I suggest to your Lordships that that is a very early age of retirement in a service which, unlike the Armed Forces, demands mental rather than physical agility. I am not suggesting that the Armed Forces do not need mental agility, too; they need both.

It is wasteful to send on pension, perhaps for 20 or 25 years, one hopes, a man of 60 who is doing an excellent job, just because he is 60. That is very wasteful. In these days when the United States has just elected for his second term a President of 73, and when the Kremlin is full of aspiring and sprightly young men in their seventies—aspiring to whatever vacancies there may be—for our service (diplomatic absolute; home relative) to impose an early limit such as this is absurd.

The absurdity is emphasised when your Lordships see that many of the leading figures of the service are obviously regarded by industry and the City as being worth paying very large salaries to. They are recruited promptly at the age of 60 and go on to render extremely useful and distinguished service, we hope, for many years to come. I hope that we may have a look at the age limit provisions.

The most important issue (and I have left it to the last) is the question of moving the service—gearing it—into a greater appreciation of the importance of management. Senior civil servants are responsible for managing large organisations, quite apart from being administrators or political policy advisers. When I was chairman of the Public Accounts Committee in another place some years ago, I saw example after example of the failure of senior people in the service to manage. One case will suffice as an example—the Bristol Siddeley engines case. A Government department happily paid the bill to Bristol Siddeley, for rehabilitating some aircraft engines, twice in succession without noticing it until the Comptroller and Auditor General picked it up.That would be difficult to see happening in a properly managed business.

Therefore, one goes back to the Fulton Report. I have the quotations from it, but for reasons of time I will not weary your Lordships with them. The Fulton Report in 1968 suggested that it was essential that management techniques, control of management, the handling of large enterprises, the allocation of jobs, specific cost limits—all those sort of things which are the normal practice of senior management in industry—should be developed in the Civil Service, and that, given the very high level of ability of such senior members of the Civil Service, if they were properly instructed in it they would manage extremely well. But, unhappily, it seems that not much has happened.

Sir Henry Clucas, the former permanent secretary of the Department of Trade in 1982, 14 years after Fulton, was complaining vigorously that very little indeed had happened in the training of himself and his former colleagues in management techniques. I know that the present Prime Minister, for whom my noble friend Lord Gowrie carries on the day-to-day management of the service, is herself very keen on this, and that she introduced the noble Lord, Lord Rayner, among others, into helping to make some movement in this direction. I therefore hope that my noble friend will be able to tell us that progress, pitifully slow since Fulton, yet in what everyone who has examined the service regards as a critical area, really is now being made.

Perhaps I may be allowed to say that we in this House are very lucky to have the noble Earl as the Minister responsible for the day-to-day administration of the service. We can therefore hear from him this afternoon and this evening: not having, as I am afraid we sometimes do, the reading of a brief by a Minister who is not in the department concerned, but a proper speech by the responsible Minister. This is a very great advantage to the House, as I have little doubt the noble Earl's position is to the Civil Service. I am hoping very much that we shall hear from my noble friend an answer to the points I have put and to the many points which, looking at the speakers' list, I expect will be put.

I have deliberately fastened, as I think is all one can do in a short time, on the points of criticism. I do not wish to leave the impression that I am other than a great admirer of our Civil Service. I want to see it continue to progress and to adapt, as necessary, to the greatly changing needs of the last quarter of the twentieth century, and indeed to be ready to adapt to the years further ahead. It is probably the finest service in the world. It has a splendid record in so many things. Corruption is almost unknown, despite Gibbon's admirable remark that corruption was the mark of a political democracy. It has very high standards indeed, and it provides a very good foundation on which to build the new improvements which I hope and believe are under way. My Lords, may I sum up what I have tried to say in the language of a school report on the service? It would be: "Doing well—could do better". I beg to move for Papers.

3.34 p.m.

The Earl of Gowrie

My Lords, I congratulate my noble friend, Lord Boyd-Carpenter, on his choice of subject today. That this is more than conventional congratulations is indicated by the splendid team of batsmen which his opening bowling has attracted. He deserves particular commendation for bringing before the House a subject which has been left without full debate by your Lordships for over 16 years. Sixteen years ago, the particular question for debate was action on the then recently published Fulton Report—and my noble friend mentioned this—which set out proposals for wide-ranging change in Civil Service structure, training and attitudes. Reports and reviews are usually good and worthy things. The Fulton Report still has things to say of relevance 16 years on.

However, I must confess that I am pleased that this debate is not about a report. I say this because reports, however good they are, tend to look backwards and forwards and indeed any place at all other than where we are now. I want, by contrast, to try to use my brief time in this debate to talk in quite detailed terms about what is actually happening in the here-and-now of the Civil Service today. I want in particular to try to get under that surface of stereotype, caricature, and generalised criticism that the Civil Service has always managed to attract.

I do not think that this criticism is malevolently made. I think the service attracts such criticism perhaps by its very nature. Modern government, including Ministers, are always liable to be thought of as "they" rather than "we". I shall be talking about changes and improvements in management, as my noble friend challenged me to do. But I am not going to talk at any length about new management systems or procedures. I have to confess that I have not yet mastered the jargon of management, and I am making fairly strenuous efforts not to do so. I am going to describe in what I hope will be plain language (and we are trying to revive the precedence of the admirable Sir Ernest Gowers in a number of our forms and in other fields) what different groups of civil servants around the country have been and are doing to try to earn the labels "dedicated" and "efficient".

Those are the people who work behind the counter in Jobcentres and tax offices, who test people's driving, who collect VAT, who work in defence stores and workshops, or who staff the Customs and immigration desks, as well as those conforming to the more usual image of the bureaucrat in his bowler hat who sits in Whitehall and provides policy advice to Ministers. However, I must say that in my years working with the Civil Service I have yet to spot a bowler hat—rather a pity in many ways. I then want to pick out one or two key points about the direction in which we are trying to move.

What struck me particularly when I had the great privilege to be asked to take on my present responsibilities—and I suspect that it strikes the more casual observer of the Civil Service—is the immense size and diversity of the service and the vast scale of its operations in money terms. It is rather easy, as a result, to think only in terms of money and numbers, and to look back to the period before the First World War, when the whole Civil Service was smaller than one of our single present departments of state, and to look back on that as a kind of golden age. Of course, one cannot ignore numbers and money. The reduction in Civil Service numbers which this Government have achieved since 1979—from 732,000 to 617,000 souls—is saving the taxpayer some £700 million a year. But it is not the only thing to notice about our drive towards greater savings and efficiency.

An essential element of our basic policy is to see that we do not employ civil servants on tasks which can be done equally well or better by the private sector. I do not believe that this is a matter of party political dogma, though of course it is often represented as such. It is surely good sense. We in this country are not alone in learning the lesson that the bigger the share of resources which the public sector takes, the bigger the burden on the taxpayer and the less resources are available for the creation of wealth. You only have to look at other Western democracies to see that this is now a universal brand of common sense and not a particular political or economic theory. It is everywhere driving the push to cut public sector numbers and costs. But these simple matters, or relatively simple matters, of cutting numbers and money are not enough in themselves.

My noble friend Lord Rayner—and he has told me how very sorry he is that he is unable, as he is abroad, to take part in this debate—made what seems to me a very important observation in a recent lecture at London University. He said: The volume of expenditure is too often mistaken for, or treated as the surrogate of, quality of service or of function performed". That is a very easy trap to fall into. My noble friend is quite right to warn us against it. It is a trap that I and my ministerial colleagues fall into ourselves from time to time—the trap of confusing the volume of expenditure with the quality of service or function performed. How often do we hear people say "We are spending so many million pounds on a new programme to help this or that worthy purpose", or "We have now got 500 people providing this or that worthy service across the length and breadth of the land". It sounds good and we then stand back and wait for the applause. But it means rather little by itself. What matters is whether the service provides any real value and what is the quality of the service.

So we must have some objective tests of services. Surely, the basic test of any service or programme provided by civil servants is value for money. Over half of the cuts in Civil Service numbers have been achieved by improving efficiency. In this area, my noble friend Lord Rayner's own work as the Prime Minister's adviser on efficiency—work that is now very ably being carried on by his successor, my colleague in the Cabinet Office, Sir Robin Ibbs—has helped us beyond measure, and I pay tribute to it. The Rayner and Ibbs efficiency scrutinies apply what I have called an objective test in a very simple way. They ask four simple questions of any Government service. Why do we do it? What does it cost? What value does it add? And if it has to be done, does it have to be done in this way? It is really no more complex than that. There is nothing glossy, elaborate or expensive about such questions. And they are nothing to do with fashions in managerial systems. Yet the savings so far generated as a result of asking these questions are worth £330 million a year with some £45 million saved on a once-and-for-all basis.

So one important feature of the efficiency work is its simplicity. Its other feature—and this, I think, is often overlooked—is that the scrutinies are carried out and the improvements in efficiency achieved not by a team of outside management consultants, though we use them from time to time, but by civil servants themselves. And this is true of all the efficiency work now going on around Whitehall and in Civil Service offices around the country, whether or not it is under the direction of the centre. You can impose cuts from outside. You can supplement internal expertise from outside. You can encourage and stimulate from outside. But you cannot impose efficiency, effectiveness and value for money from outside. They have to come from the inside. And that means hard work and dedication from the inside as well.

The public has always been a hard taskmaster. As members of the public, which we all are, we seldom want fewer services and we seldom want to pay more for the services that we have. What we want are better services at lower cost—tax offices that open at times of day that suit us, counter staff who have time to explain procedures that we find complicated in a world that is to some degree inevitably bureaucratic because we are requiring so many services. We would get nowhere without the positive co-operation, initiative and leadership of the civil servants themselves. And echoing my noble friend, these qualities also include the greater qualities of loyalty, devotion and dedication.

May I give you, my Lords, a few quick examples of the sort of things that have been happening. I begin with a word of caution. Your Lordships' first reaction to some of the examples may be surprise that such inefficiency can have existed at all rather than admiration at improvements that have taken place. But I would be surprised if any organisation in the public or private sector could not find just as many examples. The Civil Service is not unique. The changes that it has come through in the last few years and the difficulties that is has had to cope with can be found in any number of large organisations in both the private and public sectors including those that are household names for efficiency. Just look at Sainsbury's or Marks & Spencer, or indeed in the public trading sector, British Airways or British Leyland. They have all had to face one common and simple economic truth. The public wants value for money and it rewards those who provide it.

We are therefore not out on a limb. Nor is this a kind of political crusade. We have simply been doing what is happening everywhere. The basic formula is quite simple. Each member of the organisation knows what he or she is meant to be doing, why it needs to be done and what it costs. And each member has to learn to take individual responsibility for delivering the tasks with maximum value for money. If you do not have that, the pattern of inefficiency will repeat and repeat.

I give now the examples. On example is the wheelchair example. One Government department had a store which took delivery of wheelchairs and parts from manufacturers, and they sent them on to local distribution points for supply to users. Demand was always greater in the summer because that is when disabled people are likely to want to go outdoors more often. The store, apparently with good sense, used to stockpile the wheelchairs so that they could meet peak demand. But this apparent good sense overlooked the possibility of getting a better match between manufacturers' supply and patterns of demand and the fact that the local distribution centres already held four to six weeks' supply of wheelchairs which were together more than enough to cope with any hiccups in demand. So there was a double stockpiling and double costs. The main store has now become a receipt and distribution point only, reducing its own stock to practically zero. The result is savings of around £5 million previously tied up in stores and yet there is no loss of service to the user.

The second is an example that I happen particularly to like. It comes from the Inland Revenue. A 1981 efficiency scrutiny by the Inland Revenue Office found some local tax offices gradually disappearing under tonnes of files. The files were literally everywhere—under desks, behind doors and even blocking radiators. Why did they need so many? It was to answer queries and complaints. Why were there so many queries and complaints? It was because there were so many delays. Why were there so many delays? The answer was because there were so many files that it took so long to find the right piece of paper. Reverting to my arts hat, this is like the Borgesian universe. The examining officer looked at how assessments were made and recommended doing away with 20 million files on those with simple tax affairs. The Revenue identified the problem and improved their practices to make the system more efficient. Accordingly, there were fewer queries and complaints.

Both these examples concern services to the public. This is an area worth looking at in a little detail because I know that there is a great deal of concern that cuts in manpower and spending may produce extra strains on staff and therefore a poorer service for the customer. I of course would not claim that we have, in all cases, maintained exactly the same standards of provision and service that we inherited in 1979. Indeed, if we are committed to getting better value for money, it would be pretty odd if this was the case.

There can be no case for asking the taxpayer to fund a service that does not justify its cost. There is a place for the Rolls-Royce and a place for the handcart. So I do concede that some services have been cut and others have changed in quality. It is quite right to consider whether some services were not too lavish. What I do not concede is that cuts in money and manpower necessarily mean a worse or a smaller service. There is nothing magical about the numbers of people employed or the amount of money spent on any particular service.

Again, some brief examples. The DHSS have recently introduced a postal claim form for supplementary benefit in place of visits by officials or calls by claimants at local offices. The form is simple to understand; I think the technical description is that it is "user friendly". The change has been generally welcomed by the public as being more convenient to them. At the same time, it has enabled us to save no less that £13 million a year and to use some of these savings to improve other services. Another example is the transfer of most relicensing of motor vehicles to the Post Office. This has saved about 1,000 Civil Service posts and produced annual cash savings of about £9 million a year, but the result is an improved service to the public, who now have another 1,000 outlets to go to.

Again, in common with industry, civil servants in all kinds of areas are also achieving impressive improvements in productivity. In the Customs and Excise field the numbers of passengers from abroad and the volume of vehicles, ships and aircraft have increased by well over 10 per cent. in the past three years or so. And yet the same services have been provided by 10 per cent. fewer staff. By putting staff into key areas we are also achieving real improvement in performance.

For example, 160 new posts are being allocated this year and next to strengthen Customs controls. I know from Question Time today how interested your Lordships are in our efforts to combat the evil of drug trafficking. The number of drugs seizures increased from 1,784 in the year ended March 1979 to 3,315 in the year ended March 1983. Seizures of heroin went up from 40 kilogrammes in 1979 to 250 kilogrammes in the first 10 months of this year; and that has a street value of over £25 million. So, as I emphasised earlier this afternoon, in 1985–86 we are allocating 100 further posts to the fight against this great evil.

Another area is that of social security—as my noble friend implied, a bureaucratic jungle which we are gradually clearing, but not of course without stresses and strains. Between 1980 and 1984 the number of unemployment benefit claimants went up by 60 per cent. In the same period staff productivity has increased massively. One member of the staff now deals with 114 claimants, compared with one every 76 claimants in 1980. This reflects the very greatest credit on the staff who work in these offices in what are often stressful and exposed jobs. Of course, people will say that the efficiency and productivity gains achieved so far cover all the easy targets. It is always easier to get the first savings. All that I would say is that, after five years, we are continuing to find more.

One area where vast sums of money are spent every year is Government purchasing. Some £15 billion goes every year in buying a vast range of goods and services—from comparatively small sums for desks and paper to larger amounts for new technology. There are some items that you would not immediately think of. The Government buy 14,000 loaves of bread a day, for instance, at a cost of nearly £2 million a year. We discovered that from department to department there were puzzling as well as accountable variations in the cost of bread. My own department will be publishing a report in the next week covering a major review of non-military purchasing practice which will identify a number of ways in which departments can get substantially better value for money in this kind of buying. Some of the changes are very simple—just a matter of only specifying the quality the job needs. In one department we found for example that by using a less expensive quality of paper for various kinds of departmental printing we were saving around £400,000 a year.

All these examples have been given. What do they add up to? What do they tell the Civil Service observer other than that the Civil Service is under pressure and that it is working hard and delivering rather more? I believe that underlying them is something more positive than that. It is a fundamental management change of the sort for which my noble friend asked. It is not a change of structure or training of the kind that we saw after Fulton, though of course that comes into it; it is a change of attitude and approach. It is not a quick or an easy change and it did not spring fully formed from the head of the Prime Minister or my noble friend Lord Rayner or anyone else in 1979. But they gave it the push; it is there and it is growing.

The central core of the change is what we call the Financial Management Inititive. Essentially, that is the move from a situation in which efficiency and value for money were someone else's responsibility to one in which everyone in Government shares and accepts some of that money responsibility. There are two main features. First, we are moving towards a more explicit and open style in which we set out what we are trying to achieve and what yardsticks we are going to use to measure achievement. Secondly, we are moving towards a more dynamic managerial style. That means moving out of the complacent, "We've always done it this way" kind of attitude to the, "I wonder whether we could get better value if we did it that way" attitude—in short, positively looking for regular improvements in performance and value for money.

Both features Impose disciplines, and not only on those down the line in the permanent Civil Service. Ministers and senior management cannot ask staff to accept reductions in resources without themselves being very clear about what standards and priorities they expect. We have therefore tried to build into Civil Service management at every level four basic principles. First, that managers need to be given clear objectives; secondly, that those with the responsibility for achieving them need to be identified; thirdly, that their achievement needs to be monitored; and, fourthly, that managers need to be given the information, training and expert support necessary for them to carry out their responsibilities.

The new management systems which have been introduced in each department provide the framework for action. We have already published details of progress in two White Papers, so I shall not delay the House with further description on that front. May I instead, in closing, mention just two recent developments which support and fit into this new approach and which I think best illustrate it?

There is the experiment announced today under which certain staff will be able to earn a bonus for particularly good performance. Performance-related pay is widely used in other organisations as an incentive to better performance. I think it will be an interesting experiment, running alongside and reinforcing the changes I have mentioned. We also have some group incentive schemes which involve ploughing back a proportion of savings into improved amenities for the staff involved. For instance, many offices qualifying for awards have allocated up to £1,000 to their sports and social clubs for the provision of new or improved equipment.

Then, the Prime Minister, as Minister for the Civil Service, announced yesterday the publication of a report on a review of the consultancy, inspection and review capabilities in departments. Copies are being placed in the Library today. It sounds rather unexciting, but in fact what it involves is giving people down the line, who have the responsibilities concerned, the expert back-up they need to carry out their jobs effectively. It is therefore most important.

As my noble friend Lord Rayner said, what we have seen in recent years is the first coherent and sustained attempt to assess the operation of the state from a management perspective. That has produced a considerable upheaval, and one cannot have change, even change for the better, without some inconvenience. The changes we have gone through in the last few years have meant inconvenience for Ministers as well as civil servants. Civil servants—and even Ministers—would not be human if they did not occasionally look back to other and quieter times. We also would not be human if we did not worry that we were losing some of the strengths of those earlier times in the process of getting rid of the weaknesses. However, the strengths remain. These have always been the Civil Service's capacity for hard work, its ability to work quickly and effectively in crisis and to provide services to the public with a high degree of equity, and its comparative freedom from corruption.

Our professional or non-political Civil Service remains a model which many other countries regard with envy. I believe that the new emphasis on value for money, which I have tried to outline, and on efficiency, will build on these strengths, not destroy them. As my noble friend has said, the process is long and it may sometimes be difficult and painful—just as it has been for many other organisations. But when we get to the end of the process I believe that we shall have a Civil Service which, combining the traditional strengths with the new ones that I have outlined, will be one to which civil servants themselves will be proud and eager to belong, and which the country will continue to be proud to possess.