Q101 Austin Mitchell: I am delighted to hear that because that will pay back those bastards in the big accountancy houses for supporting the Tory party at the last election rather than us. I am delighted to hear it. The last question again arises from our earlier reports by the National Audit Office. They have looked at efficiency savings in the past and made finding about many of the so-called efficiency savings; efficiency savings is a great con-job of British politics because everyone says, "We are going to make efficiency savings and it will not affect services", and it is always a lie. What the National Audit Office reports have shown is that some of them were lies. They were not actually real savings. Some 18% of savings reviewed by the NAO did not represent sustainable savings, and it was unclear whether a further 44% of savings would be achieved. The question therefore becomes: when are we going to be able to assess the scale of deficit reduction that has been achieved by efficiency savings and what has been achieved by cuts in service? We cannot assess that now can we? You have already said that. When are we going to be able to assess that difference?
Ian Watmore: There is a wonderful piece of "Yes, Prime Minister" where Sir Humphrey waxes lyrically on the difference between cuts in the civil service and cuts to the civil service.
Q102 Austin Mitchell: I should tell you, in the Macmillan diaries, he says at one point, when the Government was turning to the IMF for money, "Oh we shall have to achieve savings or pretend to", which I thought was a marvellous quote. I might recommend it to the Greeks.
Ian Watmore: Yes, brilliant, we should end there. My point is that we have made a reduction in expenditure between £3 billion and £4 billion from the results of the measures that Francis and Danny have introduced last year. That I can tell you with some auditor approval has happened. How sustainable is each piece of that? Some of it will just naturally flow through and others of it will require more systemic change, like John was talking about, to endure.
Austin Mitchell: Will we be able to assess what is real before the next election?
Chair: By July.
Ian Watmore: That is why our Group is known as Efficiency and Reform. It is about making the savings and trying to get the system to endure. We have each year to help the rest of Government, because it is them that make the savings, make an accumulation of that £81 billion church spire fund, if you like, that has to be achieved, making it increasingly on efficiency grounds rather than on frontline public service reductions. That is what the aim of the Government is, and that is what the aim of our group is. I would expect each year to be able to report to you figures of the type that I am now quoting for last year. Then it will be for people in the future to judge whether or not that is becoming enduring or not. We will be trying to both save money and change the system at the same time.
Q103 Mr Bacon: You said something fascinating a minute ago about, "I solve more problems by being in the same building as the Treasury than almost in any other way." Have you thought about what wider lessons might be learnt from that maxim across Government? There was talk early on about there being a New Zealand Beehive. I have not heard much of it since the new Administration took office.
Austin Mitchell: What's that?
Mr Bacon: It was about having all the people working-particularly at the ministerial level-in a pod at the centre.
The Paris partner of your former employer, Accenture, once said he used to think office space was a neutral. He now realised, this was some years ago, that it is actually either a positive or a negative. What wider thought have you given to how what you just said could be applied across Government?
Ian Watmore: Quite a lot, because I think where I said the property issue started was on a pure financial basis: can we make savings particularly by selling our assets? We have come to the same conclusion that you have quoted, I think, which is that the property estate is integral to the civil service reform agenda. It is partly about co-location, it is also partly about the environment in which you set people up to work. If you have a flexible hot-desking environment you get more productivity than if you have a very egg box shaped cellular structure to your offices where they are just inefficient. If you give people flexible technology to use then they are more likely to be able to work where they are rather than where their desk is. There is a whole variety of things in there that we are taking forward as part of the civil service reform agenda.
Q104 Chair: Summing up, can I say thank you both for coming? I will start by saying that. We look forward to hearing from you about the details of the £3 billion by the recess. If necessary we can revisit that if we feel it is not real savings in the early autumn. Stephen has asked me to say that it is the Department of Health not the Department for Transport where they said their contractor costs have gone up where consultancy costs have not. I leave you with these thoughts. I think it is a good beginning. I think we feel that in the Committee. I think there is some fragility in the institutional settlement because of your being dislocated from where the money is and where strategy lies. Clearly that is something that we will want to think about. I think accountabilities need some working on in relation to your accountabilities and the accountabilities of Departments for what our job is, which is following the pound. I think you have taken us forward a little bit on the tight/loose relationship but are actually leaving me with a few question marks about whether or not it is a bit too loose, if we really want to get the efficiency gains rather than the cuts in service. It is something else you will want to reflect upon.
Ian Watmore: Music to Mr Maude's ears.
Chair: Thank you very much for a very interesting session.
Ian Watmore: Thank you very much as well.