HL Deb 15 June 1989 vol 508 cc1513-6

3.13 p.m.

Earl Russell asked Her Majesty's Government:

Whether they will explain the statement by the Secretary of State for Social Services (House of Commons Official Report, 17th May 1989, col. 328) that "being cost-effective does not necessarily mean giving a better, but rather a more efficient, service", and whether it represents their policy.

The Parliamentary Under-Secretary of State, Department of Social Security (Lord Skelmersdale)

My Lords, our policy is to ensure that the Department of Social Security provides a good service for the public, both as customers and as taxpayers, in the most cost-effective way. My right honourable friend's remarks to which the noble Earl refers were simply intended to illustrate that it is possible to provide the same level of service more cost-effectively by improving the efficiency of the operation.

Earl Russell

My Lords, I thank the Minister for that reply. I want to ask him about the meaning attached by Ministers to the word "efficient". While I accept that his reply is within the limits of common usage, does he agree that the word "efficient" is more commonly used to mean something synonymous with providing a better service, even without a reduction in unit costs? Can he give me any recent examples of government Statements in which the word "efficient" is used in that sense?

Lord Skelmersdale

My Lords, the best way that I can help the noble Earl is by pointing out that we have a responsibility to the general public, both as taxpayers and as customers. We need to ensure delivery of the best service possible in the most economical way. It is not realistic to provide a service regardless of cost.

Lord Peyton of Yeovil

My Lords, will my noble friend bear in mind the possibility that a better service might be more efficient and that an efficient service might also be better?

Lord Skelmersdale

My Lords, I agree with my noble friend Lord Peyton. Once one has achieved improved efficiency in the service there will be spin-offs for the beneficiaries of that service.

Baroness Jeger

My Lords, is it not a fact that the words to which the noble Earl referred were used in the context of an announcement made in another place by the Minister that the Government propose to privatise certain aspects of social security work? Why should the Government think that there will be a better or more efficient service when it is handed away from his department's professional staff?

Lord Skelmersdale

My Lords, I am afraid that the noble Baroness is only half right. The words about which the noble Earl complained were read in connection with a Statement made in another place but not, as the noble Baroness said, repeated in the House.

Baroness Jeger

My Lords, I did not say that.

Lord Skelmersdale

My Lords, the Statement was about a proposal to split the social security structure into a number of agencies. That is not—I repeat this firmly—a step towards privatisation. Options for privatisation and contracting out were explored fully before agencies were decided upon. It was concluded that total privatisation or contracting out were impractical. A good deal of the department's work, especially in the computing area, is already contracted out. The department and its agencies will continue to test the market for opportunities for cost-effective administration through contracting out. That will be investigated thoroughly in appropriate areas. I must emphasise that that is not privatisation.

The Earl of Halsbury

My Lords, will the Minister bear in mind that one of the definitive uses of the term "efficient" is in the context of power stations, heat engines and so on, where efficiency is the energy one gets out provided by the energy one puts in? What is the exact analogy between that and the way one administers a social system?

Lord Skelmersdale

My Lords, this country's social security system is based upon local office operation. Clearly, the more management effort one puts in and the better training one has, the more efficiently an office will run.

Lord Grimond

My Lords, the Minister's explanation of the word gives the impression, which I am sure is wrong, that the Government might regard a worse public service as being cost-effective.

Lord Skelmersdale

My Lords, in my original Answer I tried hard not to give that impression because it is not what my right honourable friend intended to convey on that occasion.

The Countess of Mar

My Lords, what steps is the Minister's department taking to ensure that social security officers make the right decision the first time and that the department becomes more cost-effective because there are fewer appeals and tribunals that have to be attended?

Lord Skelmersdale

My Lords, one of the ways in which we are seeking to provoke—if that is the correct word—efficiency is to establish targets, such as those to which the noble Countess referred, in the various areas. The objective is to give a concrete and practical expression of our intention to deliver a high standard of service in accordance with our definition, and to improve standards of performance where necessary. It may interest the House to know that I have arranged for those targets to be put in the Library.

Lord Whaddon

My Lords, will the Minister bear in mind that the Nazi concentration camps were extremely efficient but that there are other criteria to be borne in mind in deciding upon desirability?

Lord Skelmersdale

My Lords, I am not sure that the House will appreciate the reference to Nazi concentration camps with regard to this subject. However, it is important to get the structure right because if one does not do that one cannot pay benefits efficiently and give a good service to the public.

Earl Russell

My Lords, in future when the Government offer us a more efficient service will they please tell us whether they also mean a better one? If they do not tell us so, may we assume that they do not?

Lord Skelmersdale

My Lords, the noble Earl is becoming rather deep and devious for me. I have advised the House of what my right honourable friend intended to convey, and I do not think that I can usefully advise it any further.