:00:36. > :00:54.We are joins by Seamus Morse and Michael Whitehouse. I will start. In
:00:55. > :00:58.your memorandum, you say the savings for your value for money work
:00:59. > :01:10.amounts to 1.2 alien pounds for 2015. This appears -- billion. Tax
:01:11. > :01:20.credits, accelerating tax goes, defence in Fiji -- infantry. Does
:01:21. > :01:27.that cause you concern about such a small number of sources? Yes. But
:01:28. > :01:36.that is to with the fact that such large and easily quantifiable terms,
:01:37. > :01:41.it is easy to show what savings you have delivered. In one way, fairly
:01:42. > :01:46.mechanical. I have launched a new programme and in fact I was
:01:47. > :01:50.privileged to be speaking to Wednesday morning colleagues this
:01:51. > :01:57.morning demoting a new programme on value management -- promoting where
:01:58. > :02:09.we said our main job is to help Parliament... You mean the meeting
:02:10. > :02:17.of a permanent secretaries? -- opponent. We think it is desirable
:02:18. > :02:24.to achieve savings. We would like to do that in a rather more formal
:02:25. > :02:32.discussion. We have had positive responses from Government. I hope
:02:33. > :02:39.that will, over a relatively short time, provide as macro with
:02:40. > :02:48.something that is more wide-ranging in terms of. All this is agree, but
:02:49. > :02:53.I am aiming to move into something where we have a wider value dialogue
:02:54. > :02:58.in terms of specific reports we have done on the department. And also, in
:02:59. > :03:00.offering to bring the knowledge and benefits we have developed across
:03:01. > :03:07.Government in areas like transformation, we are taking quite
:03:08. > :03:13.a different approach to trying to add value back. We have done that in
:03:14. > :03:19.response to what we have as feedback from Government, we asked for it and
:03:20. > :03:22.this is what they said. They feel we know a lot about what is going on in
:03:23. > :03:29.Government, they would like to have more access to it if they could. It
:03:30. > :03:36.is not going to add an extra cost associated. Do you have an updated
:03:37. > :03:45.figure for 2016? Our current estimate is that we will save 734
:03:46. > :03:51.million pounds that is subject to our own internal audit. That will be
:03:52. > :04:00.done over the next month and then published. I was surprised when you
:04:01. > :04:12.said that. Can you account for the difference? 1.2 billion and a 700
:04:13. > :04:18.million? We have achieved savings of 82-1. We still exceed our target of
:04:19. > :04:24.ten times the running costs. It is a factor of a number of factors. A lot
:04:25. > :04:28.of the low hanging fruit has actually now gone within Government
:04:29. > :04:33.departments. The change in our approach identified is the
:04:34. > :04:37.recognition that if you are going to generate value, you need to be
:04:38. > :04:43.focused on the much longer term value creation within Government
:04:44. > :04:49.departments. Have you got a map in your mind, if you like, about which
:04:50. > :04:57.areas of investigation yields are the most savings? Is there any
:04:58. > :05:03.correlation? Traditionally, procurement, management of avoiding
:05:04. > :05:09.fraud, malpractice, control of a transaction costs, running costs.
:05:10. > :05:12.Infantry is another area that has always been an area we have been
:05:13. > :05:19.able to identify financial savings. Largely transaction costs, with
:05:20. > :05:27.those it is easier to focus on productivity. We don't actually set
:05:28. > :05:31.up our study programme or work programme primarily on identifying
:05:32. > :05:37.savings. But rather on things that we want to explore and is... As it
:05:38. > :05:46.happens, I know we are planning to do more work on infantry. --
:05:47. > :05:51.inventory. In terms of the MoD. Because it is a narrow base, we can
:05:52. > :05:55.go from relative famine to feast quite quickly. That is important to
:05:56. > :06:10.move to more holistic systems. Capability in Government, I'd like
:06:11. > :06:15.to ask about was that you have often drawn attention to the problems with
:06:16. > :06:23.the Government departments having the right capabilities. I am looking
:06:24. > :06:26.now, the report called the assessment of capability review
:06:27. > :06:35.programme which came out in 2009, February, eight years ago, it was a
:06:36. > :06:41.year after that I think that the capabilities plan was launched. We
:06:42. > :06:45.had evidence from the Chief Executive of the civil service a
:06:46. > :06:50.couple of years ago, six or seven years after that, saying one of the
:06:51. > :06:53.biggest problems in Whitehall is the lack of distributive capability.
:06:54. > :07:01.What impact do you think your previous reports on Government
:07:02. > :07:07.capability have actually had? We are publishing another report on that
:07:08. > :07:09.next week. I think it has had a lot of impact. When we are going through
:07:10. > :07:16.the process of developing visual pods, we find that Government reacts
:07:17. > :07:26.and takes action on reports. That is good. I don't think there is much
:07:27. > :07:29.difference between us and is... Recognising the need to
:07:30. > :07:34.professionalise a number of areas. The areas he has recognised are in
:07:35. > :07:38.digital and commercial skills, which you wouldn't find surprising in
:07:39. > :07:43.project delivery and also in change management. I agree that those are
:07:44. > :07:53.the main gaps. The question is, the rate of progress. The only point
:07:54. > :08:05.where we really diverged from him, and we have done a law to support
:08:06. > :08:08.him, is how much pressure and the pace of improvement. I think the
:08:09. > :08:11.pace of improvement has to be pretty rapid considering the threats the
:08:12. > :08:16.Government faces at the moment. Other than that, no difference. We
:08:17. > :08:25.have played quite a big part in supporting. A certain amount of
:08:26. > :08:29.ping-pong between him and us. Not surprisingly you should have this
:08:30. > :08:32.agreement on what needs to be done. What you are looking at, talking
:08:33. > :08:38.about the same problems. The separate issue is how the Government
:08:39. > :08:47.manages to get traction with only departmental fiefdoms and... That is
:08:48. > :08:52.a different thing. My question is about how much impact your support
:08:53. > :08:56.is having is not either people at the centre saying good things, but
:08:57. > :08:59.to what extent is it actually changing behaviour in Whitehall
:09:00. > :09:06.departments and agencies? Two things to say. The departments have adopted
:09:07. > :09:11.the idea of having a professional development structure. I think that
:09:12. > :09:14.is positive. And I think we have contributed to making a difference
:09:15. > :09:23.to that. The and so, there is something we have prayed a part in.
:09:24. > :09:27.-- played. Secondly, we have particularly John a danger to this,
:09:28. > :09:32.and again I am gratified to hear some of this and going back. Join
:09:33. > :09:40.attention to the challenge presented by Brexit. We have said in addition
:09:41. > :09:43.to the heavily loaded programme of existing legislation and reform in
:09:44. > :09:50.Government that we have been looking at, there is going to be even more
:09:51. > :09:57.challenges in negotiating Brexit, where are you getting these
:09:58. > :10:03.resources from? Hold that thought. If one likes, on the general subject
:10:04. > :10:07.of capability, and in the interest of full disclosure, as you say the
:10:08. > :10:14.Chair of his committee and I met with Ben Gummer. He was very focused
:10:15. > :10:19.on and said quite clearly that he wanted to do more to encourage civil
:10:20. > :10:23.service learning to be properly embedded. Some years since the
:10:24. > :10:27.National School for Government was abolished. One has a sense that
:10:28. > :10:31.Whitehall has been giving its weight in terms of what comes next. What
:10:32. > :10:38.contribution will the National War office make in terms of making the
:10:39. > :10:43.centre and departments on getting better learning, presumably
:10:44. > :10:49.including functional leadership? To hold to account and push for actual
:10:50. > :10:52.progress rather than good intentions. The only concern I have
:10:53. > :11:03.with a lot of these programmes is that they are, the decision was
:11:04. > :11:07.previously very much, there was an area where the programme being run
:11:08. > :11:12.out of the Cabinet office, and now there is more of a voluntary
:11:13. > :11:17.approach. I have heard good things about that. But depending on how
:11:18. > :11:23.urgent, is that really achieving results? I think both the PAC and
:11:24. > :11:29.ourselves, we don't have an impact on our own. We will want to ask
:11:30. > :11:34.those questions, just at what rate is progress being made? Otherwise,
:11:35. > :11:36.you tend to get good intentions. And not fat in progress. I think it is
:11:37. > :11:47.true that will make a difference. One area very central to the
:11:48. > :11:56.committee 's work is the government government 's managing -- management
:11:57. > :12:00.with various partners. There are so much more part of the furniture and
:12:01. > :12:08.part of the landscape. What concerns do you have with regard to the weak
:12:09. > :12:18.government managers are these? I think the problem can be just rotate
:12:19. > :12:25.a dip government has what is happening. We have seen a few
:12:26. > :12:30.examples of issues coming from queer work has been given to an
:12:31. > :12:37.organisation and we have not delivered. There has been some major
:12:38. > :12:45.break-up of a relationship. It is a considerable track record. What we
:12:46. > :12:56.'s having a team of auditors skilled at looking at commercial contracts
:12:57. > :13:00.and arrangements. The International Association for contract management
:13:01. > :13:05.will be central to that. We are building up our capability to locate
:13:06. > :13:15.more forensically and more consistently into that. I should
:13:16. > :13:19.have said at the beginning, it is rather hot in here, so England
:13:20. > :13:28.wishing to take off the jacket is very welcome to do so. In the
:13:29. > :13:36.memorandum, you said that Brexit is one of the key areas for the future.
:13:37. > :13:45.What is most likely to add most value the rear the Brexit policies
:13:46. > :13:59.depend? We need the clarification of the issues. The needs to be eerily
:14:00. > :14:08.planning. There are at least two major scenarios. We need to have
:14:09. > :14:17.plans for both. Some government plans are much more affected by
:14:18. > :14:25.others -- than others. We would expect not just the effect on HMRC
:14:26. > :14:29.but others. It is understanding that. Not just having departmental
:14:30. > :14:37.plans, but looking back and looking at the challenges of the government
:14:38. > :14:43.has, not just with regard to the departmental basis. It cannot be
:14:44. > :14:54.good that some departments are not affected by Brexit have to carry out
:14:55. > :14:58.the programme. Particularly, it could be shortages and timetable for
:14:59. > :15:03.legislation, because the legislation surrounding Brexit is going to take
:15:04. > :15:09.up such a large amount of time. All that needs to be put into a
:15:10. > :15:17.prioritised discussion and the circumstances adapted to. The second
:15:18. > :15:22.one, more specifically relating to rose, this is clearly going to be an
:15:23. > :15:28.argument about the outstanding balances with regard to the United
:15:29. > :15:39.Kingdom. It is something which will have to be validated and examined.
:15:40. > :15:44.That is very helpful. I am surprised that there would be an argument,
:15:45. > :15:50.because I thought there should be a pretty clear indication of what the
:15:51. > :15:56.amount should be. But you are seeing that is not the case? I think it is
:15:57. > :16:09.unlikely to turn out like that. In doing that, do you think you will be
:16:10. > :16:12.dealing with the European Court of auditors? Or would you be dealing
:16:13. > :16:24.with the Germans or the Dutch? I am not sure. There are some very big
:16:25. > :16:31.numbers being thrown around. I am sure there will be quite a lot of
:16:32. > :16:44.exchange for information at the Treasury level. What I'm seeing is,
:16:45. > :16:50.I anticipate that been a challenge. There would be substantial
:16:51. > :17:02.requirements. What are your biggest theories about the impact of Brexit?
:17:03. > :17:07.Particularly, the impact on departments, postal functioning as
:17:08. > :17:15.auditors for what lies ahead of us? What other me nearly as of concern
:17:16. > :17:28.for you. Secondly, this focus, would you expect the budget functions, for
:17:29. > :17:35.you to fulfil both rules, to carry out their work and to look at the
:17:36. > :17:42.worst scenario of Brexit, what impact of the budget and resources
:17:43. > :17:47.would you require? I simply do not know the answer to that. It is
:17:48. > :17:54.impossible to answer at the moment. There's a reason for them. If the
:17:55. > :18:01.government decides a process of rationalising the existing Pilgrim
:18:02. > :18:05.and the amount of senior management team and resources go hand-in-hand
:18:06. > :18:15.with that, I imagine that what they would want to do is some overall way
:18:16. > :18:19.in which this could be directed specifically, with regard to the
:18:20. > :18:26.departments and the changes. That would be an outline plan. That will
:18:27. > :18:37.affect the amount of other work being done. And it will the amount
:18:38. > :18:45.of work we would have to do. If it turns out we need more resources, we
:18:46. > :18:53.will go back to HMRC and ask for it. We're not seeing we will need it
:18:54. > :18:56.yet. Whether it is a soft Oriana Brexit, that is part of it, but
:18:57. > :19:11.there are so many other things. The speed of it. The image it imperfect
:19:12. > :19:16.the BBC plan is a very big plan. But we're not looking at any great
:19:17. > :19:26.storm. We need to look at what additional work needs to be done. It
:19:27. > :19:33.is significant growth. But at the moment, I am imagining that it would
:19:34. > :19:44.be manageable. Over the last few years, the fate of Sabre attack and
:19:45. > :19:50.online fraud. What are you doing to develop your own expertise within
:19:51. > :20:01.the National Audit Office Pope with a means say it be? To jump about
:20:02. > :20:07.quickly, what we are doing in this proposal is proposing to invest a
:20:08. > :20:16.lot of money and securing digital capability. We want to make sure we
:20:17. > :20:23.have the latest digital prep. But a slightly different from online fraud
:20:24. > :20:39.prevention. Clearly, we have the capacity to look at this. If you set
:20:40. > :20:54.aside very big events such as Brexit, who is the fate of more and
:20:55. > :20:58.more online activity and online crime. We regard this as a big
:20:59. > :21:06.threat and we are already building up our online capability. We have
:21:07. > :21:15.appointed someone to lead on digital. We have set up that with a
:21:16. > :21:22.specialist team just to address these issues. The department has
:21:23. > :21:34.been looking up what they will be spending on cyber security strategy.
:21:35. > :21:41.That is true. It is falling on their work, but the quality depends on how
:21:42. > :21:49.much you want to spend than making sure that what you are doing works
:21:50. > :21:57.technically. I can do an audit of whether it is real control the real
:21:58. > :22:01.plan, but to understand whether the technology solutions are correct for
:22:02. > :22:13.government, that is more challenging for me. Information technology
:22:14. > :22:20.solutions have kept many people in a job. Looking at the different area,
:22:21. > :22:29.looking at the local services. How are you managing the effectiveness
:22:30. > :22:36.of the work you're doing? As far as doing local government, we do a
:22:37. > :22:40.number of reports. The used to be called national studies by the audit
:22:41. > :22:52.commission. We evaluate the impact of them, but we also have the focus
:22:53. > :22:59.group that we consulted a regular basis from various bodies to get the
:23:00. > :23:05.reaction to what we are doing, get focus reaction and comment on the
:23:06. > :23:11.areas we're looking at, so in some cases, some of the studies we do
:23:12. > :23:25.that have been taken at this committee. He remember all the work
:23:26. > :23:29.we did on children in care. We get a lot of feedback from local
:23:30. > :23:37.government about that. That probably strikes more to local government
:23:38. > :23:41.than any other particular group. You see feedback, but there is the in
:23:42. > :23:53.more formal way of measuring the effectiveness? There are, but there
:23:54. > :23:59.comes under the heading of measuring value. We we are running out of
:24:00. > :24:12.steam. The next hearing is due to start. The question about Brexit. I
:24:13. > :24:17.am a little concerned that we are starting this process of a couple of
:24:18. > :24:22.weeks' time, that we are not more concealed about the workload on the
:24:23. > :24:26.system departments who we are going to be looking at that in this
:24:27. > :24:32.financial year. Given the huge impact this could have. I think the
:24:33. > :24:38.government has been quite clear about what sort of deal that is
:24:39. > :24:48.going for, so things like the medicines agency. Can a place you a
:24:49. > :24:53.little bit to be more open about how the departments are going to be cope
:24:54. > :25:07.with the work we are committed with her you will cope with that. First
:25:08. > :25:11.of all, will we have finalised plans on how they are going to deal with
:25:12. > :25:18.that when they do not know whether it is going to be a hard or soft
:25:19. > :25:29.Brexit? What we are constantly trying to do is evaluating within
:25:30. > :25:39.the departments. It is not too difficult to work out. We realise
:25:40. > :25:44.that. We will do that type of work. But it does require completed
:25:45. > :25:51.planning that there is something in place, rather than just seeing,
:25:52. > :26:01.look, we have evaluated on this part of business. It may be worth doing
:26:02. > :26:11.if they do not work on these problems quickly. I am totally with
:26:12. > :26:15.you on staff and please do not think that because I am giving you a
:26:16. > :26:25.couple of short answer is that we are not thinking of it. The
:26:26. > :26:30.government will publish their strategy and there has been some
:26:31. > :26:36.pressure on the resilience of key public services resisting it. Also,
:26:37. > :26:40.procurement being more transparent. Is that something you have a
:26:41. > :26:47.discussion with do you believe you are sufficiently resourced to make
:26:48. > :26:54.sure our procurement and public services are not weighted by any
:26:55. > :27:00.problems? I am not in a position to really give an answer to that. I can
:27:01. > :27:06.look at the overall view of how this is going. We have planned for this
:27:07. > :27:13.before. More likely, they will look at specific areas we're there could
:27:14. > :27:19.be problems. Ely is revered as a major procurement going on. Looking
:27:20. > :27:22.at the combined effect. We may be getting information that there is
:27:23. > :27:32.maybe something possibly going wrong. We will look specifically at
:27:33. > :27:43.that. In many of these areas, we are actually looking no. We're looking
:27:44. > :27:54.in terms of transport. Thank you very much, that is a good spot at
:27:55. > :28:02.which to finish. Whether, can I say thank you very much for attending.
:28:03. > :28:05.Variable rate is submission letting them know what we thought of the
:28:06. > :29:48.evidence. Subtitles will resume on The Week
:29:49. > :29:57.in Parliament at 23:00.