§ Mr. Maplesasked the Secretary of State for Social Services what steps have been taken by his Department since May 1979 to improve its efficiency; what has been the result; what further steps are currently being taken to improve efficiency; what the results are expected to be; and what output criteria have been developed by his Department to help measure its efficiency.
§ Mr. FowlerWe have taken a number of measures and made good progress in improving efficiency since May 1979. We now do more work with fewer staff. As a result our running costs have fallen—by over two per cent. in real terms in recent years.
My Department met the Government's target for lower manpower levels in the Civil Service by reducing overall numbers by 8 per cent. between 1979 and 1984: as part of that achievement we imposed and met out own target of a 20 per cent. reduction in headquarters staff.
On the Social Security organisation as a whole, there is a wide range of performance indicators to measure efficiency. The key indicators are (a) the unit cost of paying benefits and (b) administration costs as a proportion of total benefit expenditure. The average unit costs of paying benefits fell by 4½ per cent. in real terms between 1978–79 and 1981–82. For the non-contributory benefits, which are mainly means tested and therefore complex and expensive to administer, we have been able to reduce administrative costs as a proportion of benefit expenditure from 7.4 per cent: in 1978–79 to 5.9 per cent. in 1983–84. For the contributory benefits we have kept costs roughly constant at 3.8 per cent. of benefit.
We have carried out 15 Rayner-type scrutinies in the Department which have resulted in savings of over 3,500 230W posts and nearly £22 million so far. We are saving nearly £5 million a year following the introduction of trunking and courier services to carry mail between social security offices. We have saved 1,100 posts through the introduction of a postal claim form for the unemployed. A further 1,000 posts were saved by the devolution of work to local offices which also enabled the number of regional offices to be cut from 12 to seven. Our staff suggestions scheme has identified over £4 million in recurring savings over the last two years.
We also aim to improve the Department's efficiency by means of the financial management initiative. We have introduced a system of decentralised budgetary control for certain items of administrative expenditure and we are currently experimenting on the extension of this to manpower control. A top management review system has been developed whereby individual managers account for the progress they have made against agreed objectives and for the resources they control. Other current measures to improve efficiency include experimental incentive schemes aimed at improved performance and effective use of resources.
Within the NHS, the Department has initiated the development of a wide range of performance indicators for use by health authorities. Accountability reviews are now carried out in respect of districts (by region) and units (by districts) along the lines of the annual review of regions' performance carried out by Ministers. The NHS has also adopted the strategy of Rayner efficiency reviews as practised by the Civil Service. Copies of the published performance indicator data and of the Action Plans agreed by each regional health authority at its annual review are placed in the Library.
For the future, I am committed to maintaining the momentum of efficiency savings. We intend to meet the Government's manpower targets for 1988. We are also developing a major programme for the further use of information technology across social security operations, with implementation beginning next year but stretching well into the 1990s before completion. The aims include the achievement of significant improvements in efficiency, including very substantial staff savings.