Recruitment and Assessment Services

HL Deb 08 March 1996 vol 570 cc539-75

The Parliamentary Under-Secretary of State, Ministry of Defence (Earl Howe) rose to move, That this House take note of Her Majesty's Government's plans for the future of Recruitment and Assessment Services.

The noble Earl said: My Lords, this debate has arisen from questions raised in your Lordships' House about the Government's plans to privatise Recruitment and Assessment Services, an agency specialising in the recruitment of staff to the Civil Service. The Government's intention to do so has been the subject recently of two short debates in this House, on 25th January and 15th February. It was clear from our exchanges then, in what for an issue of this kind is the rather unsatisfactory medium of Starred Questions, that a number of your Lordships would welcome a wider discussion on these issues. The Motion standing in my name today is a response to that wish.

Recruitment and Assessment Services (which I shall refer to by the more commonly used acronym of RAS) is a next steps agency established nearly five years ago. As its name denotes, and in accordance with its agency status, it is a provider of recruitment, assessment and consultancy services to the public sector. It is perhaps best known for the recruitment of graduates to the fast stream of the Civil Service; but in fact that comprises only about a third of its turnover. Some two thirds of its business relates to appointments, at all grade levels, in other parts of the Civil Service and to wider public sector recruitment.

The role of RAS is essentially operational. Its staff are employed in a variety of roles: providing manpower-consulting services to customers; designing application forms; processing applications; devising tests; supervising the taking of tests; marking, assessing and interviewing. There are currently 140 employees, of whom over half are clerical.

RAS is a provider of those services, but it is not the only such provider. Departments and agencies have for some years been given discretion to meet their own recruitment needs direct or through private sector agencies. In fact, although RAS deals exclusively with the fast stream, the vast bulk of Civil Service recruitment—nearly 90 per cent.—is handled by others. This means that RAS has had to compete for business in a dynamic market place, and it has done so against a background of dramatically falling volumes of Civil Service recruitment. In the three years to 1994–95 new recruits fell from 42,000 to 21,000, a drop of 50 per cent.

RAS responded well to the challenge by reducing its cost base, notably its staffing levels. It also developed a range of new services for its customers. As a result, it has not only managed to hold its own; it now has a well established reputation as a centre of excellence and is trading successfully. By extending its activities into clerical recruitment, it has steadily increased its overall penetration of the Civil Service market from 7 per cent. in 1991 to 12 per cent. today. For the future, new opportunities are likely to arise as departments and agencies increasingly turn to outside agencies to source their staffing requirements.

The expertise of RAS in high calibre graduate recruitment is well known. Indeed, since April 1994 RAS has welcomed representatives from some 24 countries, seeking advice on techniques in this area of its work and in others. Each year for the fast stream RAS recruits between 100 and 150 generalists and over 100 specialists—economists, statisticians, scientists and engineers—from some 12,000 applicants.

The selection process for all the various fast streams is a rigorous and relatively lengthy one. There are three principal stages to the main fast stream scheme: shortlisting; an assessment centre; and the final interview. Shortlisting is based on the initial application form, a so-called biodata test and a cognitive test. The assessment centre stage—the Civil Service selection board—engages candidates in tests, exercises and interviews over two days, designed to give a feel for Civil Service work. Candidates who progress beyond that stage are invited to an interview: the final selection board.

I mention those details to illustrate what RAS is about and to show what it is not about. As I said, its role is essentially an operational one. It is also a commercial enterprise, a business. As a business in the public sector, it is subject to a number of constraints. There are constraints of public expenditure, denying RAS the flexibility that a private sector enterprise has to grow and adapt. It is prevented from raising investment capital or from borrowing; and, perhaps most importantly, it is constrained in selling its services outside the public sector. RAS's inability to capitalise on its professional expertise by servicing the needs of the private sector is not only a brake on its efficiency, but it also represents a lost opportunity to bring those skills into the wider arena at a time when, in the commercial world, the outsourcing of graduate recruitment—in other words, not recruiting in-house—is seen very much as an emerging trend.

Last year Ministers commissioned the consultants Coopers & Lybrand to prepare a feasibility study on the possible privatisation of RAS. Following that report, Ministers came to a twofold conclusion: first, that RAS's expertise, confined to the public sector, was an under-utilised asset; and, secondly, that a move of ownership to the private sector was not only feasible, but would serve to obviate the constraints that I have just described. Freed from those constraints, it was clear that RAS would be able to continue its efforts to widen its customer base in the public and private sectors and would be well placed to beat the competition in doing so. The spin-off would be not only greater operating efficiencies, which would offer even better value for money to the Civil Service, but also a benefit, albeit an intangible one, to the community at large. In tandem with that, there might also be a further gain—one which we have seen arise from so many privatisations in the past—that private sector disciplines would make RAS an even more effective organisation than it is today.

I described RAS just now as a business, but of course it is not just any business. A large portion of its activity bears upon an area of our national life about which, rightly, there is great sensitivity: the ethos of the Civil Service. No privatisation of RAS could be contemplated if what we were doing put that ethos at risk. The integrity and impartiality of the British Civil Service are, I venture to say, bywords throughout the world. And therefore any change to the system of recruitment to public sector posts must give us the confidence—indeed, the absolute assurance—that those standards will not thereby be undermined.

The Government take those matters extremely seriously. That is why, in taking forward our ideas, we have been single-minded in insisting on appropriate safeguards. It may be of reassurance to your Lordships if I expatiate a little on what those safeguards consist of. First, there is currently a complete separation, and will continue to be, between RAS and the regulatory functions exercised by the Civil Service Commissioners. The most important features of that regulation are the rules of selection on merit by fair and open competition. Those rules are embodied in the Civil Service Order in Council and are set out in the recruitment code drawn up by the Civil Service Commissioners. The code is mandatory, and the rules of selection govern all recruitment to the Civil Service, regardless of who carries it out, whether it is RAS, departments or businesses in the private sector. And adherence to those requirements is subject to the commissioners' audit.

The second safeguard is that the actual selection decisions, as distinct from the processing and testing of candidates, will remain in the hands of civil servants. The Civil Service, through in-house nominations, will continue to provide assessors for the fast-stream selection boards, and panel members for final selection boards. The decisions on the success or failure of candidates at these stages will therefore remain a public sector responsibility.

Other assessors involved in the fast-stream selection process will also continue to have a key role. They come from a variety of backgrounds in the wider public and private sectors and include psychologists, former civil servants and academics with expertise in assessment procedures or in particular specialist disciplines. The assessor's job is to ensure that the highest standards are maintained in recruitment to public service posts. That task, and the range of people who perform it, will remain exactly the same. The assessors work on behalf of their customers, who are of course government departments, and the customer consortium of departments who employ fast-stream entrants will itself approve the arrangements for selecting and training the assessors.

Thirdly, the tests and exercises developed by RAS for the fast-stream process will at all times remain the intellectual property of the Government. All future developments to the schemes by RAS and any changes to the tests will be protected by confidentiality obligations, preventing RAS from compromising the integrity and efficacy of the fast-stream competitions. There will also be continuing involvement of civil servants in the preparation of certain exercises to ensure that they are a true reflection of Civil Service work.

Underpinning all fast-stream work done by RAS will be a contract. We propose to offer the business for sale with exclusive contracts for the fast-stream services. The contract for the main administrative fast stream is being drawn up in close consultation with the customer consortium of departments. I can tell the House that those departments approved the contract's principal terms and conditions and declared themselves content with the safeguards. Similar arrangements apply to the specialist schemes. Not only will the contracts define carefully the selection process for each fast-stream intake, but departments will actively monitor the contracts as they go along. The Office of Public Service will have a strengthened role to carry out such monitoring. It will not therefore be possible for the new owner to seek to take short cuts in an effort to reduce costs.

What incentive will the owners of RAS have to adhere to the contract? I suggest that there will be several. The desire to win future contracts will be a powerful encouragement to perform well. RAS will also have every reason to maintain the standing of its flagship activity—the Civil Service fast stream—and the wider reputation that it has established for its leading edge recruitment work on behalf of the public sector. And in the background will be the thought that its performance will be subject to periodic audit. Should it fall down on the contract, it will lose it.

Lord Jenkins of Hillhead

My Lords, if it does by chance lose it, what does the noble Earl then see would be the option open to the Civil Service?

Earl Howe

My Lords, I shall be delighted to answer that question. With the leave of the House, if we can go through the procedure that is customary and I can complete my speech, I shall be delighted to answer that question at the end.

The timetable for transferring RAS to the private sector has been set consistent with the need to ensure that the objectives of the sale are met, and to keep the period of uncertainty for RAS staff and customers to a minimum. There is a lot to achieve in this time but we are confident that the sale process can be carried out in this timescale. There is no question of putting speed before quality.

The Government will seek a buyer who will maintain RAS as a single viable business. Under no circumstances will we offer the graduate and wider recruitment businesses separately. There are important synergies between these two sides of the business which would be lost if the agency were to be broken up.

RAS's range of highly regarded recruitment and assessment services and its unique position in the public sector market will, we believe, make it attractive to bidders. Indeed, a good number of first-class organisations have already expressed interest. The Government will select a purchaser with a clear commitment to and capacity for maintaining and enhancing the quality of service that customers now enjoy. That purchaser will also need to have demonstrated a full understanding of the rules governing Civil Service recruitment and the ability to run recruitment schemes for customer departments and agencies based on those requirements.

Your Lordships will note the amendment to the Government's Motion standing in the name of the noble Lord, Lord Bancroft. As a former head of the Home Civil Service, it is perhaps natural for him to have concerns. Those concerns would indeed have force if the rules and responsibilities relating to Civil Service recruitment were to be changed by the Government's proposals for RAS. They will not.

I hope I have said enough today to convince the noble Lord and other noble Lords who may have been in doubt that not only is there nothing sinister or objectionable in what the Government are proposing, but there are benefits, both tangible and intangible, for the Civil Service, for the private sector, for the taxpayer and for the nation. I beg to move the Motion.

Moved, That this House take note of Her Majesty's Government's plans for the future of Recruitment and Assessment Services.—(Earl Howe.)

11.22 a.m.

Lord Bancroft rose to move, as an amendment to the above Motion, to leave out ("take note") and insert ("calls for the abandonment").

The noble Lord said: My Lords, in moving the amendment I shall be very brief, in accordance with our self-imposed time constraints. I start from the premise that three pillars have sustained Her Majesty's Permanent Civil Service of the state for more than 100 years.

One pillar is a career service whose members can persist in giving frank if unwelcome advice to Ministers without the prospect of their "contracts" being ended or not renewed. The second is a unified service, bound together by a common ethos, where the best talent can be promoted on merit, without regard to departmental boundaries. The third is recruitment through open competition by an independent body, protected against interference from any source whatever. The first two pillars have been chipped away in the past five years. The Government's decision to sell off the RAS will effectively demolish the third and last. We are therefore engaged in an historic debate.

I am grateful to the noble Earl for his speech but, alas, I am genuinely unconvinced. He has protested that the opponents of the sale have misunderstood, and that this last pillar will remain standing. All of us on my side of the argument have had experience of government. My Lords, we understand all too well. Our criticisms are not, of course, of the noble Earl, but of those who took the decision. Having taken it, they have sought to evade parliamentary discussion and consultation. Cornered at last, they have imposed a rare Friday debate in the hope that it will attract little public attention and few Peers.

I may be reproached for prolonging uncertainty. I remain unmoved. It was the Government themselves who first pressed the button of uncertainty by their unilateral announcement in November. Thanks to the Government, we have only the sparsest documentation, as the noble Earl acknowledged: a handful of replies to Parliamentary Questions and one ministerial letter to a newspaper. I leave it to others to comment on this furtive arrogance and the reasons for it.

The rationale for the decision consists, I fear, of repetitive assertion alimented by self contradiction. The main arguments, as restated in the noble Earl's speech, are that, first, selling the RAS to a big private sector head-hunter will both improve its service to existing public sector customers and extend its operations to wider markets. How? Why? The noble Earl's arguments were unconvincing and thin. To the extent that it succeeds in the latter, it will be at the expense of the former.

Secondly, we are assured that recruitment will continue to be on merit by fair and open competition, and will be supervised by the Civil Service Commission. What expertise will be left to the commission to act as monitors of the tests? Further, what credible capability will remain to it for ensuring the integrity of the systems used by the mass of departmental recruiters—the vital executive and clerical officers?

For how long will the service be able to keep the big new owner-manager in leading-strings? Precisely what obligations will be laid on him in the contract? For how many years will it run? How will it be enforced? Will it be ended if the new owner falls down on the job? A profit-motivated owner-manager cannot fail to superimpose quantifiable and largely different private sector standards on an unquantifiable and quite distinctive public service ethos. I note with grim foreboding that a deal management unit has been set up.

Thirdly, we are assured that the Civil Service will continue to own the tests. That is risible. With one or two slight amendments they can and will slide across to the new owner-manager and his private sector clients. This leakage is bound to threaten the integrity of the whole public service assessment process.

What can be the real rationale for this misguided and uniquely destructive action? Clearly, it is none of the reasons so far advanced by the Government. Nor is it dissatisfaction with the performance of the existing RAS, which the noble Earl has kindly and gracefully acknowledged. Indeed, the Government single out the RAS for praise. Nor can a reason be benefit to the Exchequer. The noble Earl has told us himself that the sale will not significantly affect the PSBR. Precisely what assets will the purchasing head hunter he buying? Not the tests. This leaves only the staff, or what remains of them before the trap is sprung. I leave it to others to comment on their shabby treatment.

Perhaps, while they scraped the barrel of privatisation ideology, this splinter lodged under a ministerial fingernail. It may be a splinter to them, my Lords, but in the long perspective of Her Majesty's Civil Service it amounts to the flippant destruction of an essential pillar. Is it not ironic that this government of all governments are selling off their fast-stream recruitment agency when virtually every large PLC retains the process in-house?

Arguing about it with those who cannot or will not see its enormity is akin to seeking a rational discourse with flat-earthers or with sufferers from a collective lobotomy. Surely the least the Government can do in response to the weight of opposition is to allow more time for public and parliamentary consultation. There can be no justification for the raging appetite for a fait accompli which seems to have possessed them thus far. I beg to move.

The Lord Chancellor (Lord Mackay of Clashfern)

My Lords, the original Motion was, That this House takes note of Her Majesty's Government's plans for the future of Recruitment and Assessment Services, since when an amendment has been moved to leave out "take note" and insert "calls for the abandonment". The Question I now therefore have to put is that this amendment be agreed to.

11.29 a.m.

Lord Callaghan of Cardiff

My Lords, I thank the noble Lord, Lord Bancroft, for calling this matter to our attention and assure him of my full-hearted support. I want to go back to fundamentals. The method of recruitment to the Civil Service, as he reminded us, has been one of the major pillars that has sustained the British Civil Service during the past 150 years. The Northcote-Trevelyan reforms, as all noble Lords know, swept away bribery, favouritism and patronage as the favourite methods of securing a Civil Service post. Instead, the reforms led to the institution of the Civil Service Commission as an independent body, independent of Ministers—I shall come back to that point—of whatever party, or of any other influence. They substituted the fundamental principle that recruitment should be by way of competition, open to all, conducted by means which would give members of the public confidence that in their dealings with government they would be treated with equality, fairness and even-handedness. That has been so successful for a century and a half that the British Civil Service, in its present form, is admired throughout the world for its honesty, integrity and the general absence of corruption that can be too readily found in some other countries. Now, as the noble Lord, Lord Bancroft, said, this pillar is being demolished by the Government's privatisation proposal. The noble Lord said that this may be an historic day, but it is also a sad day. The move owes nothing to necessity and everything to dogma.

My second objection to what is being done—and here I appeal to noble Lords on both sides of the House—is that it breaks the long-standing convention between Parliament and Government that major changes in recruitment or structure, or other reforms, of the Civil Service should be made after consideration by Parliament as a whole or by an independent body.

The reason is simple and the precedents over-flowing in number. The reason is that the Civil Service is not the private property of temporary, fleeting Ministers to trifle with as they please. It is the property of us all, and Parliament has always accepted that. It is the property of us all to guarantee its neutrality, independence and integrity and to ensure that they are all maintained. So whenever major historic changes of this sort are thought necessary, as the noble Lord, Lord Bancroft, said, there has always been agreement between Parliament and government to consider, by means of setting up a Select Committee in another place, a Royal Commission or some similar method, the arguments for change and to bring forward recommendations which have nearly always been acceptable to all sides of Parliament. This time there has been nothing of the sort.

I need only remind your Lordships how continuous this approach has been. Following the Northcote—Trevelyan reforms, there was the Playfair Commission, 1874, the Ridley Commission, 1886, the MacDonnell Royal Commission of 1912, the Tomlin Royal Commission of 1929, Priestley in 1955 and Fulton in the late 1960s. Incidentally, Priestley was specifically set up to deal with the problems of recruitment as well as pay. This time there is nothing but an edict from the Government smuggled through by means of a Written Answer to a planted Question. No one can argue that this is a small matter. The methods by which new recruits join the service are the first lesson they absorb of the ethos of the service, to which the noble Earl, Lord Howe, referred.

I wish to make clear what my fundamental objection is to the proposals. The initial method of recruitment by a body of the Crown is in itself a statement to successful candidates that they have become members of a service which expects absolute fairness, integrity and even-handedness in the handling of relations with the public on behalf of the Government. Now that is to be changed. Recruitment will become part of some money-making commercial undertaking whose concern, at the bottom line, will be how much money it can make. The Government hope to alter the whole situation by means of a Written Answer to a planted Question. But the noble Lord, Lord Bancroft has thwarted them.

I believe that Ministers do not understand these underlying issues. I do not know whether it is because they are saturated in the dogma of privatisation. They have been so long in power that they are insensitive to the limits of their responsibilities. Today we have the opportunity to remind them. They must withdraw these proposals and return to the longstanding method of conducting Civil Service reforms of this magnitude by asking a Select Committee of Parliament to consider them first before they are brought forward and, if possible, to see that the reforms are not those of Conservative Party Ministers but reforms which Parliament believes it is right to introduce or some other solution in place of what is now intended to be put into operation without a word from the Government.

I sometimes wonder what animates the Government in their insensitivity and apparent inability to understand what lies behind these matters. I can only conclude with the words of a former Secretary to the Treasury who, delivering his verdict on the proposal in a letter to the Independent, said how contemptibly we are governed nowadays.

11.36 a.m.

Lord Jenkins of Hillhead

My Lords, in my view the proposal that we are considering today is foolish, damaging and of doubtful constitutional propriet. If that were not enough, even if my fears and those of other noble Lords, including almost unanimously those with a lifetime of experience in the public service, were to prove to be exaggerated, the exercise being put forward today would still be largely pointless. Any likely benefits from the commercialisation of this service are negligible compared with the potential for inflicting damage on a major national asset.

I certainly do not approach this matter from the point of view of a passionate or dogmatic nationaliser. The pursuit of public ownership for its own sake was one of the issues which gradually separated me from the Labour Party in the 1970s. I freely admit that British Telecom and British Airways, for instance, are functioning better in the private sector. But I see no room for dogmatism the other way, either. The performance of the water companies and the antics of British Gas give us pause in that respect. But these wider examples, the good and the bad, are all dealing with material services and quantifiable products. There is no difference of ethos between a comfortable and a less comfortable seat in an aircraft; between one unit of gas and another, in spite of the mysterious and fascinating Question about gas fitters which so absorbed us yesterday afternoon.

In recruiting to the public service we are not dealing with commodities which can be sliced up like grocer's packages. We are not dealing with meeting purely material needs, but with a long and proud tradition of public service and with the maintenance of standards which have long been the envy of many other countries.

The British Civil Service came into being as a result of a report of 1853 and its implementation between then and 1869. It has produced public servants—some at any rate—who are of the highest intelligence, with wide conceptual minds, which gives them the rare gift of being able to see problems in relation to each other and not just in isolation. They have also been not only the loyal servants of properly elected Ministers but also the guardians of a public probity which transcends the interests of one party or the lifetime, however extended, of any one government. The best of those public servants achieve that eminence partly because they set a higher store by public service than by the maximisation of their own rewards.

There has, I fear, already been some deterioration from the highest traditions of the Civil Service, the Civil Service which I was fortunate enough first seriously to encounter in 1964. The deterioration in morale stems partly from the view which some very senior Ministers have tended to propagate—that those values of public service over the maximisation of rewards somehow makes civil servants wimpish compared with the standards of, shall we say, Mr. Cedric Brown. It is undoubtedly true, I fear, that the service is less attractive to the brightest of entrants today than it once was.

We have had 17 years of one-party government—I do not blame the Government for that; we should all like as much longevity as we can get—but that is not inherently a healthy environment for non-party servants of the state. However, much of the tradition persists and I believe that the rest of it could still be resuscitated. But we are certainly not fostering that if we turn recruitment into a by-product of a headhunting firm, primarily concerned with recruitment to bottom-line-dominated private business. That is why the proposal is foolish and damaging.

In my view, it is also constitutionally improper for a government clinging on by their eyebrows with, at the most optimistic assessment, only 15 months of the Parliament to go to force through a totally unnecessary change on a subject which goes to the heart of the delicate balance between party government and wider national interest, and which destroys 127 years of successful tradition without any attempt at all-party agreement. Sometimes issues thrust themselves forward for necessary decision which perhaps then has to be taken, if such is the balance, by only one vote or so. That is not remotely the case with the issue before us today. It is just wanton dogmatism which we are considering.

11.42 a.m.

Lord Peyton of Yeovil

My Lords, the noble Lord, Lord Jenkins, concluded his speech with the simple question: why now? I echo that.

I think that I can say without fear of contradiction that my noble friend Lord Howe enjoys the respect and regard of noble Lords on all sides of the House, but today I feel that he must also enjoy—I do not know whether he really wants this—the sympathy of many of your Lordships. It is an open question for me as to whether the speech that he made this morning would have had a better chance of carrying conviction had he been given the opportunity to make it three or four months ago when this idea was first mooted.

Perhaps I may risk boring your Lordships with two blindingly obvious assertions. The first is that understanding is the fruit of explanation. As a means of explanation, a Written Answer by a junior Minister published on a Friday morning is not thought to be ideal. Secondly, the absence of a sufficient explanation at the right time drives people, particularly in times of concern, to reach wrong conclusions. That is particularly so where staff and jobs are concerned. There have been suggestions about White Papers being in the offing and there has been talk of revolving doors, but revolving doors lead in different directions and, apart from leading anywhere else, they sometimes lead out into the street. That must cause concern.

At the beginning of this unhappy saga, two rather bland assertions were made. The first was that existing customers would be given better service. I wonder what grounds there are for saying that. My noble friend referred to RAS this morning as a centre of excellence, but to suggest that there is a need for better service carries some indication of present inadequacy. A review is nearing completion. Might it not have been more sensible to await the result of that review?

There is then the question of wider markets. One wonders what prospects of useful success—success useful to the Government or the taxpayer—exist to be exploited by a privatised RAS. We have heard an extraordinary argument which always seems particularly odd coming from Ministers—it might be all right from someone such as myself—that this creature, RAS, will now have the great advantage of being freed from Treasury shackles. As one who has believed for a long time that Treasury shackles have left scars on the ankles of many, I wonder whether that argument comes well from Ministers who, nominally at any rate, have some control over the Treasury. If the Treasury imposes such fearful burdens and exacts such awful penalties from those it controls, surely it is looking for reform. Perhaps that is too difficult a task for Ministers at the present stage of this Government, but if they were to undertake it, I for one would wish them well.

The argument which my noble friend and others have used is that this is just a question of operational mechanics and that there is no need for such a matter to be controlled by the Government. My noble friend and the Government cannot have it both ways. If this is really so small a matter, why bother? If, on the other hand, it is something considerable, it really ought not to be pushed aside as just a matter of "operational mechanics". I fear such phrases because, far from enlightening one, they tend to impose an opaque screen between those who would wish to understand and what is being examined. I entirely agree with the noble Lord, Lord Bancroft, who in moving his amendment said that recruitment and assessment are matters which should be kept in-house.

I end with this single question: given the choice between a dedicated organisation and a contractual relationship in a very vital matter, which would any wise man prefer?

11.50 a.m.

Lord Moore of Wolvercote

My Lords, I have to declare an interest: 95 years ago in 1901, my father sat the examination for the Home Civil Service and the Indian Civil Service—the ICS as it was called then, and still is. Already, following the Northcote-Trevelyan Report 30 years previously, the examination was highly respected as being genuinely competitive without any patronage involved.

In those days, the plum jobs were in the ICS. In my father's year, seven of the first 10 in the examination, including my father, opted for the ICS. Then, 45 years later, in 1946, I sat the examination for the administrative class of the Home Civil Service. The ICS was no longer an option with the independence of India being imminent. To my delight, and I suspect rather to the surprise of my tutor at Oxford, I was accepted. I might add also that my grandfather and two uncles were also in the ICS. So your Lordships will see that a member of the Moore family is rather bound to think that there is nothing much wrong with the selection process.

In the half century since then, I have been able to get to know the Home Civil Service as well as most people: first, for 20 years as a member of the service, then for the next 20 years from the viewpoint of the Palace, and for the last 10 years as a Member of your Lordships' House. Since I left the service, I have made a point of asking Ministers of both parties, and senior civil servants, whether the high standards are being maintained. The answer on all sides has been most reassuring.

Even when Ministers have been critical of the excessive role of the bureaucracy in our life, they have been at pains to stress the high quality of the individuals in the Home Civil Service. I was glad to hear that three of the noble Lords who have spoken before me have confirmed that high opinion.

I have also questioned politicians and government servants in countries all over the world about their machinery of government and how it compares with ours in the UK. I found that universally our Civil Service is respected and, indeed, envied, for its integrity and its effectiveness.

The conclusion I have come to is that we probably have the best Civil Service in the world. So why change the whole system of selection? I listened carefully to what the Minister said, and I do not believe that the Government have given adequate reasons for privatising the recruitment organisation. Here we have a selection process which has produced this superb Civil Service, and the Government want to change it; to hand over to private enterprise the responsibility for recruiting the people who form the very fabric of our machinery of government in this country. It really does not make sense. I most earnestly ask the Government to think again.

11.54 a.m.

Lord Kennet

My Lords, I am sure that the Government will reflect seriously on the last speech considering from where it came, if I may put it that way. The Minister's speech was mostly about how close will be the control of the Civil Service over the recruitment agency when sold. The more he said that, the more I thought, "Well, if that is so important", and it is, "why are they selling it in the first place when control is best maintained by keeping something you have?"

The Minister quoted the opinion of Coopers & Lybrand on the deal. It of course used the phrase, "under-used asset". All right, so it is an under-used asset, and there will be many who will say, "a good thing to". Because an accountant advises someone that he owns an under-used asset, he is not bound therefore to sell it.

The Minister said that if the service is privatised it will be well placed to beat the opposition. What do we care about that? What do the British people care about that? Who is the opposition? Is it the duty of our government to ensure that one private head-hunting firm beats the opposition in the private sector market?

Further, what is the deal? That has not been explained. Is it a once-and-for-all sale, to be followed by annual payment adjustments, or will there be annual contracts? If there will not be some such follow-through structure, will the buyer be expected to guess the volume of work which will crop up each year for the Civil Service for ever more? Will it have to plan in advance to carry any shrinkages in volume on the back of private sector contracts? If it will, what effect do the Government think that that will have on its mode of operation?

We know that the project applies to "The Civil Service", but what is the frontier of the Civil Service? Does it apply to the secret services? Does it apply—I think we may ask this above all—to the Clerks of this House and the other place?

The purchaser will no doubt be taken over in due course. Virtually everything that the Government privatise is taken over as soon as their back is turned, probably by some foreign enterprise. It may possibly be taken over by a foreign enterprise for which the contract in question with our Civil Service will be a fairly small part of its business. Our Civil Service would then take its place in the queue along with the staff needs of who knows what corporations here and abroad, and who knows what other governments.

I ask myself—I believe that many other noble Lords have been doing the same—what has the Civil Service done to deserve the punishment of being deprived of the right to choose its own trainee members; that is, deprived of the right not just to exercise its own functions but to own its own substance, because that is what its staff is.

The Civil and Foreign Services are the state—our state, of which today's government are temporarily in charge. Recruitment to those services is the maintenance and continuity of the state. It is thus our continuity and maintenance, in a sense, which the Government are proposing to sell.

11.58 a.m.

Lord Hunt of Tanworth

My Lords, I listened carefully to the Minister when he introduced the original Motion, not just because of the respect in which he is held, but because this was the first time that the House has ever been given any proper explanation of the Government's proposals. But, hard though I listened, I could not detect in what he said any criticism of the performance of RAS hitherto. As a former First Commissioner, I was naturally glad about that.

But this is not a case where the Government are saying, "Here is a body which is under-performing, needs shaking up, needs private sector expertise brought in to do it". No, it is an organisation of which we are all proud, which has performed very satisfactorily, and to which I believe the Minister paid tribute. The argument for change is not connected with performance, it is solely a financial one, and I believe a dubious one at that.

The Minister sought to distinguish between policy and process. That is a difficult distinction to make not only because I believe that the Civil Service Commission will inevitably become drawn into a monitoring process of what is going on in a privatised RAS, which would be expensive and confusing, but also because I do not believe that the work done by RAS is solely a process. It stands for the standards which it seeks to recruit.

I believe that the proposal will be questionable at the best of times and would need a great deal of consideration and discussion, which has not happened. But I wonder whether these are the best of times. It is proposed to make the change at a time when the whole question of public service ethos is under discussion in the light of the Scott Report and so forth, and is in some quarters under attack. No one suggests that if RAS is privatised it will go party political, but it seems to me to be crazy to abandon something which flows directly from the principles of the Northcote-Trevelyan Report in favour of something where the temptation and incentive to shave costs by lowering the objectivity and more particularly the rigour of the tests is likely to be irresistible.

Although we are having the debate today, there has been insufficient discussion about such a major departure which is of greater importance than the privatising of a process, as the Minister described it. I was going to say that he dismissed it as a process, but one had a feeling that it was something mechanical which a privatised RAS could undertake. I believe that it is much more important than that. I hope therefore that the Government will think again.

12.2 p.m.

Baroness O'Cathain My Lords, I am in favour of the Government's plans; namely, the privatisation of the Recruitment and Assessment Services. As I am only too well aware, that is not the popular line today. However, I hope that my reasons for taking that line will be considered for what they are; namely, the conclusions I have reached weighing up the pros and cons from the perspective of experience in the recruitment and assessment sector both as a user and as a manager of such a function within the normal functions of a commercial business.

I believe that the prime reason for my stance relates directly to that experience and its contrast to the function of the Civil Service. Of course we have, as everyone knows, a marvellous Civil Service. As the daughter of a career senior civil servant, I have a very good idea of the calibre, commitment and integrity of civil servants. Indeed, I have often said that I enjoy very much the cut and thrust of the commercial world, but when it comes to intellectual robustness and utter honesty there is no band of people who can match the civil servants.

But that does not mean that we should expect, or indeed require, that the Civil Service staff should have the same skills as those in other occupations. In fact, there is a strong case for saying that the skills requirement for the policy formers, the servants of government, the administrators of the country, are so special that they should not be diluted by attempting to be jacks of all trades. I believe that the basic skills involved in the running of RAS fall into the category of skills that are not necessarily required by the civil service staff.

The Civil Service has enough mind-stretching, time-consuming tasks to do within its own special competence. I suggest that the mechanics involved in the modern approach to recruitment and assessment should not be perceived to be an area of specific competence which falls into the "must have" category for the Civil Service.

I believe that the issue we are addressing today has been a victim of misunderstanding. There seems to be a misunderstanding as to what the functions of RAS really are. There is certainly misunderstanding about where RAS fits into the overall recruitment and assessment field within the task of employing the best possible people for the Civil Service.

RAS is just one of the three legs of the overall recruitment into our Civil Service. The individual departments make the final decision as to who should be employed. The Civil Service Commissioners set the standards and monitor them. RAS is the operational agency which currently effects about 12 per cent. of the recruitment—only 12 per cent.

What RAS does, and does most efficiently, is to provide the basic service of discussing job descriptions with departments, drafting advertisements, placing advertisements, acknowledging replies to advertisements, sifting through applications—"weeding", as we used to call it—drawing up short lists, processing first interviews, making assessments and psychological profiling and completing pre-employment enquiries.

That is specialised and valuable work. It is an area that is adopting new techniques and adapting to changes in the job market on a continuous basis. It is an area that requires special skills, but not necessarily the skills that one needs within the mainstream Civil Service.

I found that the latest annual report of RAS made fascinating reading. First, it was beautifully produced, clear, concise and utterly professional. And that was only the appearance! The content was most encouraging. Here is a business which has met its tough targets in a declining market; its "market share" of Civil Service recruitment increased from 7 per cent. in 1991 to a figure of 12 per cent. today. In 1994–95 it filled some 2,300 posts. New areas of business were explored and undertaken; for example, recruitment for health authorities and NHS trusts. All of that activity must have resulted in an increase in the skills base of RAS and those skills could well be utilised outside the public sector.

However, such natural extension is not possible while it is still under the control of government. It is not the function of government, I suggest, to thwart the natural development of any business—even one which they own. My noble friend the Minister detailed some of the constraints under which RAS currently operates. Those constraints must have a detrimental effect on the natural commercial vigour of such an obviously successful business. Let us remind ourselves of the tough financial targets that were imposed on RAS. It was asked to plan for a surplus of £5,900 and in the past year it achieved a surplus of £415,000. Similarly, a planned productivity increase of 2 per cent. became an actual productivity increase of 15 per cent.

We should not stunt the development of such an achieving business. However, I do understand the concerns. Naturally people are worried that there could be a falling off in standards. But RAS has its standards imposed upon it by the Civil Service Commissioners. The newly-privatised business is unlikely to ignore those standards. There are plenty of other recruitment businesses which would be only too willing to take its place if it did. So we are still talking about only 12 per cent.

Another concern is that perhaps RAS could develop a monopoly position. I suggest that 12 per cent, is a long way from a monopoly position. A further concern, but not held by me, is the possible dilution of existing skills. Perhaps the specific skills developed for the specific job of recruitment solely for the public sector could become diluted by involvement in the private sector. I suggest that RAS could only benefit by exposure to the differing requirements of the private sector. Skills developed in recruitment and assessment for the private sector could well have an advantageous spin-off for the public-sector recruitment.

There is one area in which I have a minor concern and I would be happy if my noble friend the Minister could allay that anxiety when he winds up. It involves the fast-stream recruitment. RAS currently gets involved in what one calls the "milk round"—the scouring of universities for the cream of new graduates for fast-stream recruitment into the service. Could it be possible that there might be a conflict between looking for the brightest and best for the Civil Service while at the same time looking for the brightest and best for plum jobs in the private sector? Much has already been said, but what has not been said, or repeated, is the understanding given in this House by my noble friend Lord Howe. He stated: Recruitment to the fast stream of the Civil Service must be handled with the utmost propriety. I stress also that that principle is in no way affected by the Government's proposals for RAS".—[Official Report, 25/1/96; col. 1122.]

On the subject of the "milk round", I sincerely believe that this is an area in which techniques ranging from mounting exhibitions to attract potential employees to answering the somewhat demanding questions of gilded youth, who believe that they can change the world, are highly specialised. Those skills can be developed only by years of working hard at the task. The people who go on the "milk rounds" are not policy formers and they are not diplomats. In the main, they are young people—actually, they are market hustlers—who are attuned to the aspirations of the young. They are not necessarily what we are looking for as mainstream civil servants. The people who carry out the recruitment and assessment are not necessarily the people we need for the service as a whole. To get the best in this specialised area we need to employ the best recruiters. The best recruiters are those who develop their techniques over many years in their own niche market of business. This really is not a business that the Civil Service ought to be in.

12.10 p.m.

Lord Allen of Abbeydale

My Lords, in listening to the speech which the noble Baroness has just made I could not help but think what a great comfort it must be to the Minister at last to hear a speech in support of the Government's proposals. Looking at the list of speakers to follow, I do not believe that there will be many more and I am afraid that my speech is not designed to be of comfort to the Minister.

Recently I read again the Northcote-Trevelyan Report to which so much reference has been made. I found it a rather depressing experience because it reminded me that much of what the report recommended as the foundation of the modern Civil Service has already gone; for example, the concept of a unified service. The Government have waited until they are almost in sight of a general election to launch this major change on the central issue of recruiting the future leaders of the service.

At no time have the Government suggested that RAS has failed to meet its objectives or that there has been any problem as a result of a shortfall in investment or that its sale would affect significantly the public sector borrowing requirement. I know that I am not alone in having found some difficulty in marshalling arguments against the Government's proposals when I simply could not make out the reasoning behind them.

We have had two exchanges at Question Time without achieving much by way of clarification. Although all might have been made clear had I been able to attend a briefing meeting laid on at short notice yesterday evening I rather doubt it, having listened carefully to what the Minister told the House today.

I shall not go over again the considerations which have already been put so clearly by my noble friend Lord Bancroft but I should like to say a few additional words about the way in which the proposal has been handled. As has been recalled, the Government's proposal was announced as a decision already taken in reply to an arranged Question in another place last November. The reply covered the Occupational Health and Safety Agency as well as RAS and gave the impression that here were a couple of minor activities which might just as well be added to the privatised list without any need for lengthy explanation or outside consultation, notwithstanding the traditions referred to by the noble Lords, Lord Callaghan of Cardiff and Lord Jenkins of Hillhead.

It was entirely in keeping that no similar Question was arranged here, although it would not have called for any great flight of the imagination to know that a number of Members of this House would be keenly interested in the fate of the RAS. If the Government failed to realise that at the time, to adapt a well-known phrase used by the late Ernie Bevin, "they now know different".

I am somewhat concerned about the staff. The November Answer said nothing about their fate and it took a Question for Written Answer here to ascertain that members of staff would be unlikely to be released for transfer to another post before the sale and probably unable to get back into the Civil Service after privatisation. Just to round it off, the Minister said in reply to a supplementary question from the noble Lord, Lord Campbell of Alloway, that the staff had not been consulted before the decision to privatise had been taken. That is not a very comforting piece of history.

I suppose that a prime asset in the eyes of a purchaser must indeed be the skill and experience of the existing staff. But as time goes on, those people will gradually go and will be replaced by individuals who have no acquaintance with the ethos of the public service and who will be the employees of a company whose main aim is to make a profit. Like other speakers, I feel grave doubt as to whether the safeguards about which the Government talk—the ownership of the tests and so on—will prove effective, looking to the long term. This is essentially a long-term rather than a short-term matter.

Although we do not know the length of the original contract, nor do we know how the monitoring to which the Minister referred would be carried out, we know that it will take 20 years or more, as the careers of the new recruits mature, before there can be a really worthwhile assessment of the working of the new arrangements. By then, it may be too late.

I am sorry to say it but I, too, am not persuaded by the arguments put forward by the Government for this very important change and I add my voice to those who implore them to think again.

2.16 p.m.

Lord Wallace of Saltaire

My Lords, I declare a total lack of interest in this issue! I have never been a civil servant and, as far as I know, none of my ancestors was ever a civil servant. I put my name down to speak in the debate because I was puzzled. I had seen the first edition of the fast-stream newsletter and I found its language odd, to say the least.

Having heard the Minister's speech, I am totally unpersuaded that there is a case for privatisation. I feel that the Minister found himself using the language of a management consultancy in a way which is extremely inappropriate for a Minister of the Crown. After all, we are talking about the Crown and the British state.

The Minister tells us that there will be benefits for the taxpayer from this privatisation. He gave no evidence of that. I assume—and I declare one small past interest in that I was an assessor, which I did as a matter of public service—that the new commercial market-tested operation assessors will be paid on a proper commercial basis. Therefore, the net outcome of that entire operation will be a net cost to the taxpayer. Indeed, the fast-stream newsletter tells me that KPMG has been appointed as the official financial adviser to the RAS privatisation process by the Cabinet Office, the vendor, and Berwin Leighton are the corporate lawyers. I assume that that is also part of the additional cost of privatisation.

I am extremely uneasy about the idea that one has a further spread of private monopoly countered by Civil Service regulation. I have been trying to think of a name for the new regulatory unit which will provide that audit. Will it be "Ofsiv" or "Ofgov" or, as it is to do with recruitment, will it be "Ofrec"?

However, I am concerned about the blurring of the division between private and public and between the state and civil society. At present I spend a lot of my time in central and eastern Europe helping to reconstruct the relationship between the state and civil society in what have previously been authoritarian societies. It is very important to establish a firm distinction between what is public and what is private; it is the basis of constitutional democracy. I have been trying to think which states in Europe most blur that distinction. Of course, in western Europe it is Italy. In eastern Europe it is Bulgaria and Russia.

In 18th century Britain there was a great blurring of that distinction. Indeed, the public service was, in the language which the Minister has just used, a marketplace in which commissions were bought and sold and in which taxes were farmed. It was the achievement of the 19th century British state to move us away from that towards a state in which the concept of public service was established. As I listened to the Minister's arguments for privatising the recruitment of members for our Civil Service, I wondered what arguments one would put forward against extending those principles to recruiting our military personnel by a similarly privatised commercial operation, whether or not owned by British companies.

I could make a very good case using the same language for privatising the process of tax collection in this country. It could be very much more efficiently done on a commercial basis by debt collecting organisations which would collect debts for banks, mortgage societies and our taxes at the same time. The question of where one stops at this point becomes very difficult to decide.

We have a government who have for the past 17 years talked about the importance of defending British sovereignty against the encroachment on the British state of the European Community. However, here we have a government who are destroying the concept of the British state and the British Crown by bringing closer and closer to the heart of British government commercial, privatising and marketplace principles.

To talk about the Civil Service as a dynamic marketplace or a public sector market is a contradiction in terms. It seems to me that we are talking about ideology taking the place of sensible, practical government. I would very much like the Minister to tell us which further aspects—perhaps, for example, of the service of this House or of the recruitment services for the Government, or whatever—they would wish to ring fence, which I believe is now the correct language, from further privatisation. If one accepts that one takes recruitment for the Civil Service as privatised, it seems to me that there is almost no function of government which is not open to privatisation in the long run.

It used to be a principle of Conservatism, "If it ain't broke, don't fix it". If something is working quite well, it seems that the principle of our current Government in too many sections now is, "Let's see if we can break it". I add my voice strongly to those who support the amendment.

12.22 p.m.

Lord Wright of Richmond

My Lords, I support the noble Lord, Lord Bancroft, and other noble Lords who have expressed deep concern, if not outrage, at the Government's proposals. My experience throughout my diplomatic career, but particularly as Head of the Diplomatic Service, of the RAS, and of its predecessor, was one of admiration and total satisfaction with the service provided. It has consistently delivered high-calibre recruits who fully meet the needs of the Diplomatic Service for public servants with a high degree of loyalty, integrity, impartiality, stability of character, intelligence and linguistic aptitude and who, incidentally, place the ethos of public service above financial reward—a concept which a private headhunter might find rather strange and unfamiliar.

I support the noble Lord, Lord Bancroft, because I share his concern and that of other noble Lords who have spoken that privatisation should not in any way dilute the quality of the service provided by the Recruitment and Assessment Services. It is some, but not much, consolation to learn that a number of safeguards are to be built into the contract for the purchaser including, first, the continued involvement of departmental representation on CSSB and final selection boards to ensure that the requirements of departments are met; secondly, a very welcome reversal of what I understand was the Government's previous decision to scrap the final selection board altogether but which, I gather, will now be retained for one more year as a quality control measure; and, thirdly, intellectual property provisions to ensure that details of successful applicants are not used elsewhere.

Nevertheless, I remain deeply concerned, despite the safeguards listed by the noble Earl, Lord Howe, that privatisation, apparently for the sake of ideology alone—I have not yet been convinced of any benefits—will over time erode the quality and calibre of our senior public servants both at home and abroad and the integrity, objectivity and high success rate of the selection and recruitment process. Like other noble Lords, I urge the Government to reconsider.

12.25 p.m.

Lord Bruce of Donington

My Lords, I support the amendment moved so ably by the noble Lord, Lord Bancroft. On examining the original Written Answer to a Parliamentary Question, which materialised suddenly and obscurely on a Friday afternoon, I find that there are two main reasons why the Government embarked upon such a course. The first reason appeared in the first paragraph and the second and subsidiary reason is to be found in the second paragraph of the Written Answer. The Government said: After further consideration in the light of advice from Coopers and Lybrand".—[Official Report, Commons, 23/11/95; col. 235.] That is the first plank of their argument. But what is denied us is any sight of the kind of advice that was sought from Coopers & Lybrand. Very often management consultants, even illustrious ones, are asked what questions should be put in order to give the answer that is required. That is not entirely unknown in the field of management consultancy. Therefore, it would have been most helpful, as a minimum—and especially in the light of today's debate—if we had been provided with a copy of the letter to Coopers & Lybrand in which the Government requested the advice that they received. It would also have been helpful if Members of this House, among whom are some of the most illustrious figures in academic and business life, could have been advised of the precise nature of the reply from Coopers & Lybrand. We must always remember that, being human, Coopers & Lybrand can occasionally make mistakes; they are not God.

The second line of argument adduced by the Government and repeated today is that they are going to rescue the service from the constraints placed upon it by the Government. I have not been cast in the role of Sir Galahad like those on the Front Bench seeking to rescue the organisation from constraints. But, as a matter of common sense, I should have thought that if it is within their power to exercise the constraints under which the enterprise suffers, the easiest way of getting rid of such constraints is to stop exercising them. As I said, it seems a matter of common sense.

We all know that the notion that there is some kind of constraint which remains fixed and immutable is ridiculous nonsense. Indeed, the Government are busily writing off billions every day from privatised assets, forgiving debts, making advances and so on. They are quite capable of doing anything which is fundamentally required by the organisation.

Such arguments simply will not wash. The same applies to the queer notion that private enterprise management and the consultancy firms—or, indeed, headhunter firms—have a specialised intellect and grasp of the realities of life that is denied to civil servants. Again, that is complete nonsense. The noble Baroness, Lady O'Cathain, knows very well that the activities of headhunters have not always been very satisfactory when deployed in the private sector as well as in the public sector. There have occasionally been selections—and I shall not emphasise them unduly—that have landed up in the dock at the Old Bailey. There is no irrefutable line of wisdom in private enterprise.

The Government have to answer this question: if the service is functioning as well as it is, what demands will private enterprise be able to make upon it if it is to remain absolutely unchanged? What is in it for private enterprise? What will private enterprise get out of it? Those are the questions the Government have to answer. My guess is that in due course they will have to bow to the doctrine correctly and succinctly put forward by my noble friend Lord Callaghan. The Government should remember that this is not a government service; it is a service to the nation and a service to Parliament. The quicker the Government realise that the better.

12.30 p.m.

Lord Greenhill of Harrow

My Lords, like the noble Lord, Lord Wright of Richmond, I shall base my views on my experience in the Diplomatic Service. I served from 1946 until 1973, and that included 10 consecutive years in Whitehall under different governments and contrasting Ministers. I believe we served the country reasonably well. We had respect for our own department and that respect was shared by our foreign friends, and indeed some of our enemies.

For the 20 years which followed I was involved with several well-known commercial companies. I did not come away from them with the impression that they recruited their staffs more successfully than we did, or inspired them with more loyalty to their employers. But all that is in the past. Times are fast changing in 1996. We are coming up to an election and whichever party wins will soon face a different country and a different world. Some of the changes cannot now be clearly foreseen. No doubt the Scott Report will—rightly or wrongly—suggest modifications on how departments should be managed. But much more important than the Scott Report is the matter of how our relations with the European Union may soon compel our Government to change. Parliament may become increasingly unrecognisable. Surely we should not in 1996 make the changes now being proposed by the Government. Would it not be more sensible to await the election result and the outcome of our relations and negotiations with Europe?

12.32 p.m.

Baroness Park of Monmouth

My Lords, if the Recruitment and Assessment Services were already a small business, and not, as hitherto, part of an increasingly federal, fragmented public service, and I were a part-time director, I would no doubt be pleased by the business plan, the accounts, the statistics and graphs, and the claims of increased market penetration, higher turnover and competitiveness in a dynamic market place. But we are talking about what has hitherto been a vital part of the public service. Behind all the jargon it has been doing well by any standard. Why sell it, and—I should like to know—for how much?

A major section of the report is headed "Customer partnership in a changing market place". We are told that the emphasis—that is, on the nature of the skills being recruited— has moved from the traditional generalist policy maker towards more specialist technical and managerial competencies. Indeed, encouraging this trend was one of the factors behind the increased delegation of recruitment responsibility". But, we are not talking about the business sector; we are talking about how the public service for the next generation will be chosen, and on what criteria. It seems abundantly clear that the move is being made solely to save—and no doubt to make, temporarily—money. The dogma that business methods are best and that management skills and value for money count for more than leadership, rigour, and experience of government, will in due course drive out all the best civil servants from the great departments of state. It will effectively discourage the best graduates from even applying for, let alone entering, a career full of short termism, bereft of tradition and leadership, where the only inducement to join will be that it may be useful to have five years in Whitehall on one's CV. Constant mobility throughout the service will destroy experience.

Undergraduates used to say to me that if the public service no longer meant tradition and service but was just like joining Marks & Spencer, then they might as well join Marks & Spencer straight away and get higher pay for doing it. The fragmentation of a once coherent and admired public service into agencies, and now into fully privatised bodies, has already led to the entry at the level of heads of agencies of a sizeable number of no doubt otherwise efficient men and women straight from the world of business and the City with no training or experience in the difficult art of government, or knowledge of how Whitehall works.

The White Paper Taking Forward Continuity and Change forecast the loss to the public service of its most enterprising members—those who should be the permanent secretaries of the future. The Treasury and Civil Service Committee, when considering the paper feared that, the value of agency status as an instrument for improving efficiency and quality of service would be considerably reduced if agency status came to be seen principally as a staging post to the private sector". The Government replied, Where there is an intention that an agency should in due course move out of the public sector, this is made clear at the outset". That is news to me. The Government continued, Further, the key tests are whether the function or activity is appropriate to government and which approach is assessed to provide best value for money". I submit that those two objectives are in any case contradictory. I know that some of the best members of some of these agencies are thinking in just that way at a personal level. They take the view that as they cannot be public servants in the old tradition, why should they not instead take lucrative consultancies? That is what they may well do. So who, then, will be left to do the vital work of recruitment in those splendid new privatised agencies?

No one doubts that there is room for reform and new thinking. There is room for that in even the best organisations. But the great casualties, which the Government seem unable to recognise, are quality, morale, commitment and the cohesion of the service. If we must talk about "customers", then the "customers", the public, will be the losers. Our Civil Service has been the envy of the world. It is career based and highly professional. Must it be turned into several corner grocery shops?

I end with a special plea to the Government who seem to have a natural talent for giving away the best clothes to the Oxfam shop and then being unable to get them back, as one cannot train a generation of experienced and devoted civil servants overnight. Once they are gone, they are gone. I ask my noble friend the Minister; please do not also decide—as I understand the Government may be thinking of doing—to abolish the Civil Service College. That, too, is one of the jewels in the crown. Let no one suppose that this will be the end. The Bett Report, which is hovering in the wings, will probably have us selling service recruitment, on the basis of performance related pay, to a really efficient head hunting firm based in, say, Singapore, and recruiting through the Internet.

12.38 p.m.

Lord Henderson of Brompton

My Lords, I believe the best service I can render to the House at this moment is to be brief, and I shall be brief. I have one essential contribution to make. So far no one has mentioned the fact that the Clerks of both Houses are recruited through RAS. They are extremely grateful for the fact that the recruitment base on which to form the final judgment before they are admitted to the service of both Houses is believed to be roughly, but not entirely, the exact equivalent of service in the Civil Service.

I believe that we are a small recruitment. In the case of the House of Lords it is not more than an average of one a year and in the House of Commons perhaps two or three a year. But small though we are, we might have been expected to have been consulted. Of course, I may say that we were not and we much regret that. We have, indeed, some fears for the future because it has been mentioned by the noble Lord, Lord Kennet, for instance, that the new organisation might be taken over with inconceivable consequences to the public service. We do not like the thought of that either.

I have only two or three minor comments to make because most of what I would otherwise have said has already been mentioned in prior speeches. Speaking for the smaller departments—like the two Houses but there are other small departments—I wonder whether the service will suffer when there is no profit motive in those smaller departments, when the profit motive may become more dominant in the privatised RAS. In particular, I wonder what would happen, if as I suppose might happen, some large departments of state choose to opt out from the RAS fast-stream competition and run their own. Where will the smaller departments be left? Can it really be said that they can realistically run their own competitions? They are far too small for that; faced with paying higher charges from commercial organisations for a smaller competition with fewer candidates.

I am also worried about the process of placing candidates being subject to the privatised RAS. It is a potential problem. If the candidates have more than one option—it quite often happens that the candidates in RAS put, as one of their options, service to one or other of the two Houses and service in Civil Service departments—how will that be resolved? I feel it could not be less than deleterious to the process of recruitment which currently exists.

12.42 p.m.

Lord Acton

My Lords, after Zimbabwean independence in 1980 I was for some years a civil servant in that country. Masses of Rhodesian civil servants had left. Thus I found myself part of a largely new and untested civil service. Because of that experience I have a special admiration for the RAS. I particularly respect its work of selecting the fast-stream entry, thereby ensuring continuity and a future leadership of outstanding calibre.

In my enthusiasm for the RAS I am far from being a single, lonely former Commonwealth civil servant. All over the globe a great band of public servants regard the organisation as exemplary.

Since 1993 delegations of civil servants, and sometimes Ministers, from 24 countries have visited the RAS in Whitehall and Basingstoke. From Australia to Zimbabwe and from China to Chile they have come. Representatives from vast countries like India and the United States have come. Representatives from countries that have recently seen dramatic change like South Africa, Hungary and Poland have come. Delegations from all five continents have visited the RAS to look, to listen, and to learn. Truly the organisation is an international beacon of excellence. And now the Government seek to privatise it.

The directors of the RAS in their first annual report in 1992 defined its role: We offer a broad range of services in the following areas—recruitment, consultancy and advice, training. These services are provided primarily to government departments, executive agencies and the Civil Service Commissioners. We can also offer them to other statutory and public bodies, provided this does not detract from the needs of our primary customers". Those last words, provided this does not detract from the needs of our primary customers", are crucial. Privatisation of the RAS would kill that policy. The new RAS's new objective would be to maximise profits in any market it could. The needs of government departments would cease to be paramount and the Civil Service would suffer grievously.

I have studied the Answers to Parliamentary Questions about this matter, and I listened to the Minister today. I am driven to the conclusion that the Government, without thinking through the consequences, mean to privatise the RAS out of a blind faith in the doctrine of privatisation.

I support the amendment of my noble friend Lord Bancroft because I consider that the plan to privatise the RAS is not the result of thought. Nor is the plan a substitute for thought. It is the negation of thought.

12.45 p.m.

Lord Marlesford

My Lords, I intervene with diffidence very briefly in the gap. I am a fervent believer in privatisation for three reasons: first, to give access to capital markets; secondly, to stop governments interfering with the matter of the organisation being privatised; and thirdly, to attract better people. In my view, none of those reasons applies to this particular proposal. I am well aware that there is sometimes a feeling—we have all seen it in "Yes, Minister"—that Ministers cannot cope with the Civil Service. That itself does not seem to me a good reason. I am very aware that a significant proportion of Ministers in all governments are not up to dealing with the Civil Service. That needs remedying, but the remedy is fairly obvious. I say that on the basis of some 33 years observing, and occasionally participating in, the process of government.

Finally, I just say that as a Tory I believe the onus is always for proof in favour of change. I have not heard that proof.

12.46 p.m.

Lord Rippon of Hexham

My Lords, may I also speak briefly in the gap to say I entirely support everything said by the noble Lord, Lord Bancroft, and others. As for relationships between Ministers and civil servants, I recall Harold Macmillan once saying to me, "The Civil Service is a magnificent machine provided you use it." Let us leave well alone.

12.47 p.m.

Baroness Williams of Crosby

My Lords, if the opinion of this House means anything to the Government they must take due note of what has been a remarkable debate, a debate in which, with one exception, from all corners of the House, from Members of every party, and from people with a very wide range of experience of government, of academic life, of the Civil Service and of activities outside government, we have heard virtually a united condemnation of the proposal. I repeat that if the opinion of this House means anything, the Government must reconsider the proposal they are making for the privatisation of the RAS.

We have considered the arguments that might have been deployed. Does the RAS have poor standards? No. The noble Lord, Lord Hunt, and indeed the Minister himself, clearly indicated that its standards are very high. Is there a poor control of costs? No. The annual survey of the RAS, quoted by the noble Baroness, Lady O'Cathain, indicates that costs have been reduced to the lowest level compatible with the service that is carried out. Is the organisation incapable of change? No. In April 1991 the organisation grew out of a decision to make it into a Next Steps agency. It embarked upon a major revolution in recruitment in the Civil Service which all concerned agree went extremely well.

Is it the view of the Select Committee on the Treasury and the Civil Service of another place that this change should be made? No. While that Select Committee accepted the idea of the Next Steps agency its chairman explicitly indicated that that should not be regarded as a threshold to privatisation and in doing so gave the views of an all-party committee. Is it that the staff are discontented? We do not know, because the staff have not been consulted, as an Answer a month ago to a Written Question from my noble friend Lord Bancroft indicated.

I want to discuss the issue of the staff because the major asset of the RAS to be sold to a private bidder is its expertise. I refer to men and women who generally entered the public service because that is what they wanted to do. They found themselves in the OPS—the Office of Public Service—and were informed that they would be forced to join the private purchaser of RAS whether or not they wanted to do so.

In answer to questions prompted by the Cabinet Office's news release of 23rd November 1995, in particular, the question of whether civil servants would be able to seek jobs elsewhere in the Civil Service prior to privatisation, the answer was that, management will be under an obligation to maintain the viability of RAS in the period before sale, and staff may, in practice, find it difficult to secure this agreement". Asked whether staff would have any right of return to central government—and I repeat that these are people who believed that they had joined the public service—the Government's answer was no. All staff covered by TUPE should transfer with the business. That is an extraordinary form of coercion, addressed to men and women who have genuinely sought to serve the Government and the country.

Was the view of the assessors, notified at their request to the head of the Civil Service, to the effect that they believed very strongly that there were great dangers in the path being undertaken made widely known to this House? The answer to that question is also no.

So let me ask the noble Earl—I share the respect of this House for him—a question on the issue of staff. If a member of staff genuinely wishes to stay within the Civil Service and not move into a privatised agency, will the conscience and wishes of that member of staff be respected? The second question I want to ask is whether the wall between the recruitment of civil servants and the recruitment of people into the private sector, to which the noble Baroness, Lady O'Cathain, referred so interestingly, will be maintained. Recently I was told that at the University of Cambridge, outside the halls where Ph.D students learn whether they have passed their examination, there is a line-up of private sector employers from the United States offering them jobs on the spot. Is that what we want to see as a result of privatising the RAS?

This is a bridge too far for privatisation. It intrudes into the whole sense of what the public sector is all about. I quote a troubling leader in the Financial Times of only a month ago: The case for a permanent Civil Service in place of a Whitehall pact with party nominees is to ensure that Ministers receive sound advice and that the administration is conducted on an ethical basis. There are dangers that senior officials appear to see themselves as proselytisers and not as dispassionate advisers. They are doing Whitehall a grave disservice". If the Government proceed with this proposal they will be doing not only Whitehall but the whole of this nation a grave disservice.

12.54 p.m.

Lord McIntosh of Haringey

My Lords, we are confronted today with two issues. One is the issue of propriety and the second is the issue of practicality.

On the issue of propriety a number of noble Lords have already made the point that it was improper for such an important announcement as this to be made as an Answer to a Written Question in another place on a Friday rather than with an opportunity for a formal debate.

However, it is much more improper than that. We have had the benefit of the wisdom and experience of many noble Lords who know about the Civil Service at the highest level and, indeed, about government at its highest level. They have all reiterated that the Civil Service Commissioners are not responsible to individual Ministers, as my noble friend Lord Callaghan said. They are responsible to Parliament and to the Queen. To take away from their responsibilities and their ability to carry out their responsibilities under an Order in Council is utterly improper. So the answer to whether this is a proper procedure must be emphatically no.

Then we turn to the issue of practicality. We have been told by Ministers that there is likely to be no significant benefit to the Treasury. So those who accuse the Government of doing this for money are probably mistaken. We have also been told on numerous occasions, not least by the Minister today, that there is no dissatisfaction with the work of the Recruitment and Assessment Service or its ability to change or to operate effectively under financial constraint.

We have been told at some length that safeguards will be introduced which will distinguish between what the Minister called the operational role of the RAS and the regulatory role, which is the role of the commissioners. That makes clear that this is neither the beginning nor the end of a process. It is not the beginning of a process because the ability of the commissioners to fulfil their obligations under the Order in Council which set them up has already been diminished by the spread of trading agencies, Next Step agencies and quangos. It is fairly clear to those of us who observe these matters that the quality of recruitment and assessment in the agencies, or certainly in the quangos, is well below that which is required of the central Civil Service. It is already happening. It is not something new. The Civil Service Commissioners are being deprived of their ability to do their job. This is a step in the process.

Nor is it the end of the process. If we listen to the arguments of the Minister, as the noble Lord, Lord Wallace, said, every one of the arguments about the distinction between operational and regulatory forces will apply also to the next tier of privatisations which the Government, if they survive, will wish to introduce. The noble Lord referred to the tax service and to the military. The arguments used, which rely on regulation rather than operation, will lead inevitably, if carried to their logical conclusion, to further privatisations at the core of our governmental process.

This proposal is neither proper nor practical.

12.58 p.m.

Earl Howe

My Lords, this has been an interesting and memorable debate. I am grateful to all noble Lords who have spoken. In particular, I should like to thank my noble friend Lady O'Cathain for her supportive speech. That she and I have been lone voices in your Lordships' House is, of course, a disappointment. I confess that it is also not the most comfortable of experiences. As I indicated earlier, I believe that it is entirely natural that noble Lords, and in particular those like the noble Lords, Lord Bancroft, Lord Allen of Abbeydale and Lord Henderson, and many others who have a deep understanding of the Civil Service, should have anxieties when proposals such as these are promulgated in their bald form. I had hoped that in my opening speech I would have persuaded those noble Lords to soft-pedal a little. Despite the suspicion and criticism they have thought fit to articulate, I continue firmly to believe that the Government are deserving of neither, and indeed that the basis of a good part of the criticism rests on fundamental misconceptions. In responding briefly to your Lordships' concerns, I shall endeavour to dispel such confusion.

Perhaps I may first cover one particular point. A few days ago I wrote to a number of noble Lords who I felt might be interested in these issues, inviting them to a meeting attended by senior civil servants as well as Ministers. The noble Lord, Lord Bancroft, was one of the Peers I invited. I did not, for whatever reason, receive a reply from him. But in the event the planned briefing with officials present did not take place. The invitations to noble Lords from all sides of the House were issued in a constructive spirit.

Lord McIntosh of Haringey

My Lords, at 50 minutes' notice.

Earl Howe

My Lords, I am aware that the invitation to the noble Lord, Lord McIntosh, was very much at the last minute; and I apologise to him for that.

Lord McIntosh of Haringey

Then do not say "all sides of the House".

Earl Howe

My Lords, the noble Lord, Lord McIntosh, should have been invited a few days earlier along with other noble Lords and I must express my regrets that he was not.

Baroness Williams of Crosby

My Lords, I thank the noble Earl for giving way. I shall be brief. I, too, was invited at 50 minutes' notice. Can the Government give us an assurance that in future briefing of this kind will be available to people from all parties in the House and not on a very different timescale one side from another?

Earl Howe

My Lords, the invitations that I issued a few days ago were to Peers from all sides of the House. I now acknowledge that that should have been a longer list. I am sorry that the noble Baroness was also one of those affected.

Lord Jenkins of Hillhead

My Lords, I have to add that I was not invited at all.

Earl Howe

My Lords, again I express my regrets to the noble Lord.

Lord Richard

My Lords, I am sorry to pursue this, but the noble Earl says that invitations were sent out to Peers on all sides of the House. So far as I and my Chief Whip know, no one from the Labour Party received any information other than at 50 minutes' notice to my noble friend.

Earl Howe

My Lords, I think lessons have been learnt from this. My intention was that noble Lords, even those as experienced as the noble Lord, Lord Bancroft, might have learnt (as they say in the legal profession) something to their advantage from such a meeting. I regret that we could not have discussed the issues across the table simply in order to allay unnecessary concerns.

There has been a running theme through many of today's contributions. A number of noble Lords voiced concerns, I believe, based on a misunderstanding of the relationship between RAS and the Civil Service Commissioners. RAS was one of the two organisations created in 1991 to replace the Civil Service Commission. The second organisation was the Office of the Civil Service Commissioners, which was established at this time to support the work of the independent commissioners. Here, as many noble Lords have adverted, the history is perhaps worth noting briefly. The origins of the Civil Service Commission will, I am sure, be well known to those noble Lords with an interest in the history. It was in 1854 that the Northcote-Trevelyan Report identified patronage as one of the main causes of the service's then endemic inefficiency and public disrepute. The report recommended the use of open competitive examination to test the merit of those seeking appointment to the Civil Service.

The Civil Service Commission came into being to assist the first Civil Service Commissioners to run examinations and to give approval to the appointment of those duly qualified. The years up to 1920 saw the commissioners' powers extended gradually to cover nearly all appointments. Specially prepared written examinations were at the time supplemented by methods such as interview and assessment centres.

The Civil Service Commission retained its independent existence as a government department for many years. In 1968, on the recommendation of the Fulton Committee Report on the Civil Service, the commission was merged with the personnel management divisions of the Treasury to form the Civil Service Department. The Minister for the Civil Service became responsible for the rules on recruitment to the service. The commissioners were responsible for advising the Minister on those rules.

By 1982, the commissioners had delegated to departments responsibility for recruitment to most junior Civil Service posts. However, the commissioners retained responsibility for the selection of middle and senior level staff representing about 15 per cent. of the Civil Service.

In 1991, new Orders in Council extended departments' and agencies' responsibilities to over 95 per cent. of recruitment. However, all recruitment to the Civil Service, whoever carried it out, still remained subject to the Minister for the Civil Service's rules on selection. As I mentioned in my opening speech, those rules require selection on merit through fair and open competition. I stress that RAS and the Office of the Civil Service Commissioners were established as two discrete, separate organisations to replace the Civil Service Commission.

Further changes to the Orders in Council last year returned to the commissioners the responsibility for interpreting the key principles of selection based on merit through fair and open competition and completed the process of devolving responsibility to departments. The commissioners now oversee only the most senior appointments.

The criticisms levelled by some noble Lords appear to conflate RAS's role as a recruitment agency performing an operational role acting for departments with the regulatory role of the Civil Service Commissioners. Those roles were once combined in the Civil Service Commission. As I said, they are now quite separate.

The noble Lords, Lord Callaghan and Lord Hunt of Tanworth, complained that there had been insufficient discussion of this proposal, which I believe they described as historic. This is, I acknowledge, an important change. But I think that it is stretching the language a little far to describe it as historic. The rules and responsibilities for Civil Service selection will not be changed. The Government's commitment to preserving Civil Service integrity is absolute, and I have explained how we expect to achieve this. Customers and the Office of the Civil Service Commissioners have been closely consulted on their requirements in the work leading to the contracts. They will also be closely involved in the selection of the new owner.

However, let me say this in response to your Lordships' concerns about the way in which the proposal was announced. Noble Lords asked me in Oral Questions on 15th February why the announcement had not also been made in your Lordships' House at the same time as in another place. As the House will know, many announcements are made only in another place. But in view of your Lordships' particular interest in the Civil Service, the Government accept that the announcement should also have been made in your Lordships' House. That it was not is something I regret.

There was another theme in many speeches. Some noble Lords, including the noble Lord, Lord Callaghan, and the noble Lord, Lord Jenkins, saw fit to accuse the Government of arrogance and an unreasoning adherence to dogma. I find that line of argument disappointing. In fact, I find it difficult to take seriously. In my opening speech I endeavoured to show not only that there is a compelling rationale for privatising RAS but that now is the right time to act on it.

However, I will say this. At the heart of this debate is a philosophical divide—a divide between those who believe that when we look at the boundaries and the spread of the state owned sector there should be a strong, indeed a natural, presumption, in favour of the status quo. There are those of us on this side of the House who believe that state ownership is a dead hand; that the size of the public sector is too large; that if there is no need for a business enterprise to be in the public sector then, allowing for proper safeguards, it should not be there; and that the success of past privatisation speaks for itself. To that extent, this is an issue of principle.

But each case for privatisation has to be examined on its merits. In RAS we have an enterprise with a front rank expertise in graduate recruitment. It is operational and administrative in nature. The standards to which it is required to operate are not self generated; they are imposed from outside by the Civil Service Commissioners and by customers. RAS cannot spread its cost base as a normal business might do because it is constrained from selling into wider markets. It cannot raise capital, it cannot spend or invest without close Treasury scrutiny and approval.

I say to my noble friend Lord Peyton that that is not a criticism of the Treasury. As he knows well, if you believe, as the Government do, that public spending and inflation need to be controlled, it is necessary to have rules in place which ensure that the disciplines are respected. I say to the noble Lord, Lord Bruce, that it is not fair to allow a state-owned business to compete with the private sector while enjoying the guarantee of the taxpayer. The choice with a state-owned business is to live with the constraints—and sometimes that is the right course—or to look at other ways of delivering the same service. That is the answer to noble Lords who ask "Why are the Government doing this?" The prospect before us with RAS is to remove the constraints, to allow RAS to seek better economies of scale by broadening its customer base, to allow it to hone its skills in the private sector and thereby to offer better service and better value for money to the customers it serves. That is not a criticism of its performance now, it simply underscores the constraints with which it now has to live.

A number of noble Lords appear to accuse the Government of a concerted attack on the Civil Service. Nothing could be further from reality. I do not believe that there is a Minister or former Minister who has not had cause to appreciate the integrity, impartiality and professionalism of our Civil Service and to understand the pivotal role that the Civil Service plays in our national life. However, governments have a duty to protect the interests of the taxpayer and to ensure that public services are delivered effectively. To fulfil that policy involves a process which inevitably leads to anxieties among the civil servants most closely affected. The Government take those anxieties seriously. But to argue that government policy is in some way anti-Civil Service is nonsense. Still less is it credible to argue that the privatisation of a self-contained business like RAS can be prayed in aid of that view.

The noble Lord, Lord Jenkins, expressed the opinion that the Government have reduced the attractiveness of the Civil Service as a career. That is an odd observation because applications to join the Civil Service have generally increased significantly in recent years. The noble Lords, Lord Bancroft and Lord Allen of Abbeydale, referred to the treatment of the RAS staff. The staff of RAS are being kept informed of progress through regular staff meetings, information bulletins and such communications. The acting chief executive and senior managers will work closely with the Cabinet Office's financial and legal advisers to ensure that the business is presented for sale in the most favourable light. The Government fully recognise that this is an unsettling time for the staff of RAS. We attach great importance to ensuring that staff are treated fairly and that their rights are fully respected in the process.

The noble Lord, Lord Henderson, referred to the House of Lords and House of Commons Clerks. As a matter of fact, I understand that the views of those responsible for the Clerks in both Houses have been sought and that arrangements that take into account their requirements are being drawn up.

The noble Baroness, Lady Williams, asked whether staff would be able to move ahead of the sale. Staff will be able to apply for other jobs within the Civil Service, subject, as now, to the agreement of the management that they can be released. RAS managers will consider each case sympathetically on its merits, but they will need to maintain the viability of RAS ahead of the sale. To date, no application has been refused.

The noble Lord, Lord Bruce, asked what advice was sought from Messrs. Coopers & Lybrand. Coopers & Lybrand were asked to advise on the feasibility of privatising RAS. In particular, they were asked to advise on the likely extent of interest from purchasers, who those purchasers might be and a possible timetable for privatisation. It is a private document because much of the report covers commercially confidential information.

The noble Lord, Lord Bancroft, indicated that all large PLCs retain graduate recruitment in-house. That is less and less the case. The point is significant. There is an emerging trend in the market for placing high calibre graduate recruitment in the hands of quality recruitment firms. A number of top companies have begun to do that and we are confident that it can be done with the Civil Service in a way which preserves and enhances the quality of selection procedures and does not erode them.

The noble Lord, Lord Bancroft, said that he felt that the timetable was too fast. I believe that it is important not to extend for too long the period of uncertainty for staff and customers. However, I have already assured your Lordships that speed will not be at the expense of quality. Customer departments have agreed that a five-year contract is likely at best to provide the services required for most fast-stream recruitment. Bids will be invited to purchase RAS and to price a contract to cover fast-stream recruitment. That contract is expected to cover a five-year period, although that is for negotiation.

The noble Lord, Lord Kennet, asked what protection there might be against takeovers of the new RAS. The fast-stream contract will entitle the Government to withdraw the contract in such an event; hence, only a subsequent new owner acceptable to the Government would wish to proceed with such a takeover. It is obvious that any new owner would wish to ensure that the main customers were fully satisfied.

The noble Lord, Lord Allen of Abbeydale, expressed his opinion that the prime aim of the new company would be to make a profit. He thought that that was inappropriate. That is an extraordinary statement. The new company will need to ensure that it satisfies its customers through providing good services. Without such satisfied customers, the company will not have a secure basis for making a profit. The two are opposite sides of the same coin.

The noble Lord, Lord Moore, said that he thought that privatisation would damage the quality of the Civil Service. Let me simply underline to him that RAS's customers, the departments, are keen to ensure that the quality of Civil Service intake is maintained. It has to be. They will be closely involved throughout the privatisation.

A key criterion on selection of the new owner will be its understanding of the requirements of the Civil Service. All recruitment carried out on behalf of the Civil Service customers will need to meet the requirements of the Commissioners' Recruitment Code. The new owner will have every interest in maintaining its capability in the area.

In a similar vein, the noble Lord, Lord Bancroft, voiced the fear that freedom to sell in wider markets would mean poorer service to existing customers. The contractual terms will carefully define the levels of service to be provided for existing customers. Developing new services for customers and so on will inevitably bring benefits to Civil Service customers. We are confident that the new owner will build on, and not diminish, the reputation of RAS for excellence.

The noble Lord, Lord Jenkins, asked me what would happen if RAS were to lose the contract. I hope he did not think me discourteous for not answering him earlier, but I felt it was perhaps more appropriate to do so at this point. If customer departments had concerns about the performance of the new RAS, the first move would be to ensure that new RAS took steps to solve any problems. However, in the unlikely event that significant problems persisted, then a new competition for the contract would need to be held. Experience of contracting out government services in this and other countries shows that careful initial selection of private sector contractors ensures that continued good service is provided. Private sector providers are keenly interested in continuity, to provide the quality of service sought by customers.

Why is it necessary and important, as the noble Lord, Lord Kennet, asked, for RAS to compete in the private sector? RAS will benefit from the freedom to use its expertise in new markets, subject to the important controls that I have described. It has already demonstrated its ability to win new customers within the wider public sector. Full freedom to compete in the private sector will allow it to build on its success as a centre of excellence and further develop its services to the benefit of all its customers. We are confident too that with this freedom we shall be able to secure best value for money for Civil Service customers and for the taxpayer. That is the duty of government. The Government are committed to ensuring that the sale is conducted on a basis that not only maintains the standing of RAS as a high quality recruitment agency, but also guarantees that the quality and integrity of the recruitment that it carries out is maintained.

I very much hope that the noble Lord, Lord Bancroft, will not press his amendment. I believe that, contrary to what he said, I have done justice to his position. I have to say that I do not believe that he has done justice to mine. I very much hope that he will reflect.

1.20 p.m.

Lord Bancroft

My Lords, in concluding the debate, I once again promise to be brief. I am immensely grateful to all noble Lords who have spoken on an historic occasion, particularly those who have done so at considerable personal inconvenience. There were a number of other Peers, and a bead-roll of extremely well known Peers in public affairs, who would otherwise have spoken. I could read out their names, but I shall not do so.

The noble Earl sought to sum up the debate and I congratulate him on his temerity. Were I to emulate him, it would be with a markedly different perspective. But time does not permit. We are here discussing a matter of high policy and, with deep respect to the noble Earl and the noble Baroness, not a mechanical weeding business.

Perhaps I may say a few very brief words about the business of the briefing meeting. The Government seem to have panicked (if I may use that verb) at the last moment when they saw the weight of the list of speakers. I was kindly invited to a briefing meeting which was also to be attended by the noble Lord, Lord Allen of Abbeydale, and three Conservatives. I replied to the letter on Wednesday—though it did not reach me until Thursday—because I had been told of its contents. I am very sorry that the noble Earl did not receive my reply. It seemed to me inappropriate that I should go to a briefing meeting that evening only hours before the debate, as the matter had been in the public domain and the parliamentary domain since November last year.

I noted very carefully the noble Earl's extremely gallant remarks. I had hoped that he would offer to have the matter reconsidered by Ministers and that the results of that reconsideration would be brought back to Parliament for debate. However, he has not done so.

Let me be frank with the House. At this point in my life there are very few matters, apart from my family, about which I can feel passionately. One of them is the future integrity of the public service and in particular the Civil Service. Many of us devoted our lives to it. In the absence of any assurances of reconsideration or of parliamentary debate, I have no alternative but to divide the House.

1.23 p.m.

On Question, Whether the said amendment shall be agreed to?

Their Lordships divided: Contents, 124; Not-Contents, 64.

Division No. 1
CONTENTS
Ackner, L.	Jenkins of Putney, L.
Acton, L.	Judd, L.
Addington, L.	Kennet, L.
Allen of Abbeydale, L. [Teller.]	Kilbracken, L.
Ampthill, L.	Lauderdale, E
Attlee, E	Lawrence, L.
Avebury, L.	Lester of Herne Hill, L.
Bancroft, L. [Teller.]	Listowel, E
Bath, M.	Longford, E.
Beaumont of Whitley, L.	McIntosh of Haringey, L.
Belhaven and Stenton, L.	Mackie of Benshie, L
Berkeley, L.	McNair, L.
Blackstone, B.	McNally, L.
Borrie, L.	Marlesford, L.
Boyd-Carpenter, L.	Marsh, L.
Bridges, L.	Mayhew, L.
Brightman, L.	Meston, L.
Broadbridge, L.	Milner of Leeds, L.
Bruce of Donington, L.	Mishcon, L.
Callaghan of Cardiff, L.	Molloy, L.
Carew, L.	Monkswell, L.
Carmichael of Kelvingrove, L.	Monteagle of Brandon, L.
Chalfont, L.	Moore of Wolvercote, L.
Chorley, L.	Morris of Castle Morris, L.
Cledwyn of Penrhos, L.	Ogmore, L.
Clinton-Davis, L.	Orr-Ewing, L.
Craigavon, V.	Park of Monmouth, B.
Croham, L.	Peyton of Yeovil, L.
Darcy (de Knayth), B.	Pike, B.
Dean of Thornton-le-Fylde, B.	Prys-Davies, L.
Desai, L.	Redesdale, L.
Donaldson of Kingsbridge, L.	Richard, L.
Donoughue, L.	Rippon of Hexham, L.
Dormand of Easington, L.	Rochester, L.
Dubs, L.	Rodgers of Quarry Bank, L.
Ezra, L.	Roll of Ipsden, L.
Falkender, B.	Russell, E
Falkland, V.	St. John of Bletso, L.
Freyberg, L.	Seear, B.
Gallacher, L.	Serota, B.
Geraint, L	Shannon, E
Gladwin of Clee, L.	Shaughnessy, L.
Gladwyn, L.	Simon, V.
Graham of Edmonton, L.	Simon of Glaisdale, L.
Greenhill of Harrow, L.	Stedman, B.
Halsbury, E	Strabolgi, L.
Hamwee, B.	Strange, B.
Harris of Greenwich, L.	Tenby, V.
Harrowby, E.	Thomas of Walliswood, B.
Haskel, L.	Thomson of Monifieth, L.
Hayman, B.	Thurlow, L.
Henderson of Brompton, L.	Tope, L.
Holderness, L.	Tordoff, L.
Holme of Cheltenham, L.	Wallace of Saltaire, L.
Hooson, L.	Walpole, L.
Hunt of Tanworth, L.	Weatherill, L.
Jay of Paddington, B.	Wedderburn of Charlton, L.
Jenkins of Hillhead, L.	White, B.

Wigoder, L.	Williams of Mostyn, L.
Wilberforce, L.	Winchilsea and Nottingham, E.
Williams of Crosby, B.	Winston, L.
Williams of Elvel, L.	Wright of Richmond, L.
NOT-CONTENTS
Addison, V.	Leigh, L.
Ailsa, M.	Liverpool, E.
Alexander of Tunis, E.	Long, V. [Teller.]
Alexander of Weedon, L.	Lucas, L.
Annaly, L.	Lucas of Chilworth, L.
Archer of Weston-Super-Mare, L.	McColl of Dulwich, L.
Bethell, L.	Mackay of Ardbrecknish, L
Blatch, B.	Mackay of Clashfern, L. [Lord Chancellor.]
Brougham and Vaux, L.
Cadman, L.	Mancroft, L.
Chalker of Wallasey, B.	Mersey, V.
Clanwilliam, E.	Miller of Hendon, B.
Coleraine, L.	Milverton, L.
Colwyn, L.	Montgomery of Alamein, V.
Courtown, E.	Munster, E.
Cranborne, V. [Lord Privy Seal.]	Noel-Buxton, L.
Cumberlege, B.	Northesk, E.
De Freyne, L.	O'Cathain, B.
	Oxfuird, V.
Elles, B.	Pender, L.
Elton, L.	Piatt of Writtle, B.
Ferrers, E.	Rawlings, B.
Finsberg, L.	Rennell, L
Geddes, L.	Renwick, L
Goschen, V.	Seccombe, B.
Harding of Petherton, L.	Selborne, E.
Hemphill, L.	Sterling of Plaistow, L.
Hogg, B.	Strathclyde, L. [Teller.]
HolmPatrick, L.	Swansea, L.
Howe, E.	Swinfen, L.
Inglewood, L.	Teviot, L.
Ironside, L.	Trumpington, B.
Kenilworth, L.	Vivian, L

Resolved in the affirmative, and amendment agreed to accordingly.

The Lord Chancellor

My Lords, the Question is that the original Motion, as amended, be agreed to.

On Question, Motion, as amended, agreed to.

Lord Richard

My Lords, before we proceed to the next business, in view of the vote that has just taken place and the firm expression of the view of this House, will the Government now consider whether this matter should be referred to a Select Committee of either this House or of Parliament? As I understand it, that has happened in the case of changes to the Civil Service constitution and working powers on every other single occasion that this issue has been before Parliament. Will the Leader of the House consider that view?

The Lord Privy Seal (Viscount Cranborne)

My Lords, I can assure the House that the Government will take very seriously the expression of opinion that the House gave this morning. We will look at the implications of the vote. We will undertake to read with care the criticisms voiced as well as the matters raised on the other side. We undertake also to come back to the House when we have considered the matter and advise your Lordships of the conclusions that the Government have reached.