CIPFA conference news held in Harrogate on June 1315 Senior US mandarin prefers British system

22 Jun 06
The US comptroller general, David Walker, has praised the UK's system of permanent secretaries running Whitehall departments and wants a similar system introduced in US government departments.

23 June 2006

The US comptroller general, David Walker, has praised the UK's system of permanent secretaries running Whitehall departments and wants a similar system introduced in US government departments.

Walker told Public Finance that having departments run by a senior official who stays in post when the administration changes provides stability. It also allows a focus on governance issues rather than just short-term political objectives.

Walker, who is head of US public spending watchdog the Government Accountability Office, told PF : 'Your concept of the permanent secretary is a good one and I'd like to see it applied to our system.

'I don't think it's, by itself, a panacea, but it's an essential element to dealing with long-standing problems in some [US] departments, notably defence.'

Walker said he would like to see such departments run by individuals, preferably with a mix of public and private sector experience, hired for seven-year terms on performance-related contracts.

He said the current system often resulted in people only being in post for two or three years, which was not long enough for them get to grips with many governance issues.

Senior officials' status as political appointees also meant that they would inevitably focus on short-term objectives, Walker said.

'Political appointees want to focus on policy issues, not management, knowledge capital, finance, which are good governance issues.'

He told delegates the GAO was undertaking work with the Organisation for Economic Co-operation and Development to put together a set of key national outcome indicators for every major industrialised country.

The indicators would establish a clear baseline against which government performance could be reviewed, Walker added.

Double devolution stays on DCLG's list of priorities

Double devolution is alive and well and remains a priority for the newly formed Department for Communities and Local Government, its permanent secretary told CIPFA delegates.

Addressing the conference on June 15, Peter Housden outlined the priorities for the new department, which in the recent adjustment of Whitehall boundaries, added communities work and equality issues to its existing responsibilities for local government, housing and planning.

Among them is double devolution, the brainchild of former local government minister David Miliband.

Housden said: 'Double devolution is not about giving power to local authorities but about working in partnership with local authorities to help them give power to communities.'

Working together or co-production as he termed it was a key theme of Housden's presentation.

He said his department's work was not just about legislation and regulation but about the way the DCLG worked with its partners.

'Desirable outcomes on climate change, obesity, antisocial behaviour need to be co-produced rather than simply delivered by the state,' he told the conference.

Departments suffer from too many changes, argues Talbot

Ministers must adjust the pace and nature of organisational reform across the public sector or face 'serious dysfunctional performance', a leading academic has warned.

Speaking on June 15, Colin Talbot, chair of public policy and management at Manchester Business School, said that academic research indicated that any major organisational reform took at least two or three years to 'bed in' and that improved performance was possible only after that period.

But large swathes of the UK public sector, Talbot noted, are subject to major reorganisations every 12 to 18 months. 'The pace of change is so great that we're seeing serious dysfunctional performance,' he warned.

Talbot argued that this problem was, in part, a reason for continued poor performance across departments and agencies such as the Department for Work and Pensions and the Home Office.

He concluded that ministers were too often tempted into organisational restructuring 'to distract attention away from poor policy making'.

Too many managers are 'financial illiterates'

Mary Keegan, the head of the Government Accountancy Service, has warned that there is a long way to go to overcome 'financial illiteracy' among Whitehall managers.

Keegan told the conference that, while progress had been made on ensuring ministries have a qualified accountant as director of finance, that was not enough.

Keegan also identified problems with financial data produced by Whitehall, which often took too long to produce and, in some cases, raised doubts over accuracy.

NHS reforms 'at risk' from political change

Serious doubts over the government's commitment to its health service reforms could emerge once Prime Minister Tony Blair leaves office, CIPFA conference delegates were told.

Niall Dickson, chair of the King's Fund health think-tank, said that the number of politicians, senior advisers and officials committed to reform plans, such as 'choice' and a commissioner/provider split, is 'relatively small'.

Dickson cited Blair, Health Secretary Patricia Hewitt and adviser Paul Corrigan as among a small group of steadfast 'believers' in the market-driven reforms trialled and implemented by Number 10 and the Department of Health in recent years.

'Beneath that, there isn't a huge commitment to some of these ideas, so there is a real question about how far the momentum for some of these changes will stretch when Blair goes,' he warned on June 15.

However, Dickson said he did not view all elements of the reforms as a 'swing door' through which ministers could go back.

Dickson believes that Blair's likely handover of power next year will be blighted by the fact that government is caught in a 'political pincer'.

It has, he argued, on one side 'those who don't really want significant health reform some trade unions and professional bodies and on the other groups like Doctors for Reform, who don't believe in a tax-funded system'.

He reminded delegates that the biggest challenge across the NHS would be improved productivity and efficiency amid tighter finance settlements than the 7% increases enjoyed in recent years.

Bernard Crump, chief executive of the NHS Institute of Improvement and Innovation, said that required a new focus across Whitehall.

'I challenge& the notion that contestability and control from the centre is the only driver that will get you the improvements,' he said.

'What's needed is a better balance between external regulation and drivers and giving the [local] NHS the tools to attain these improvements themselves.'

LGPS is a poor deal for lower paid, says expert

The Local Government Pension Scheme offers a poor deal for lower-paid members which verges on 'a pensions mis-selling scandal', a senior local government actuary told the CIPFA conference on June 15.

Ronnie Bowie, senior partner at Hymans Robertson, said: 'The LGPS does not serve the majority of the membership well. Within whatever budget society agrees is appropriate for public sector pensions, the cake could be better sliced up.'

Using a detailed analysis of Manchester City Council's scheme, Bowie showed how three-quarters of scheme members had built up savings of less than £3,000 while almost half of the total value of the fund was due to just 10% of the active members.

Bowie contended that many low-paid LGPS members would actually be better off opting out of the scheme altogether and relying on a combination of the basic state pension and means-tested benefits.

Because their pay was so low, they received little or no tax relief on their contributions. Yet their expected weekly payouts from the LGPS were so low they would still need benefit top-ups to bring them up to the guaranteed minimum pensioner income.

'That £4,000-plus that they paid in, that they didn't get any tax relief on and that would have made their lives a lot easier, has been money down the drain,' said Bowie. 'I'm not going to say that this is a pension mis-selling scandal& but this is a big group all the part-timers, all the low paid.'

The bias towards better-paid 'high-flyers' was due to the final salary nature of the scheme, said Bowie. Moving towards a career averaging scheme would involve a modest redistribution in favour of 'low-flyers', he said.

But Glynn Jenkins, head of pensions for Unison, which represents the majority of LGPS members said, the 'devil was in the detail' of career average schemes. Lower-paid workers could do better, but only if their accrual rates were higher, he said.


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