Absolutely; that is a good and broad-based example that proves the concept’s breadth of applicability.
The whole idea behind that is based on the What Works Network, which is currently backed up by the evaluation taskforce—a joint unit between the Cabinet Office and His Majesty’s Treasury. That is long-standing expertise—over 10 years’ worth—in arm’s length evaluation of Government contracts. It is a great idea in principle, and it has its roots very firmly in successful examples such as the National Institute for Health and Care Excellence, which does a crucial job relating to the medicines bought by the NHS.
But—and it is a very big and important “but”—just how much of that £300 billion-worth of public expenditure is properly evaluated each year? The answer, or the “stat of shame” as it is described in the civil service, is 8%—£1 in every £12. That is shocking and should worry us all. Whether or not we are concerned about value for money or the effectiveness of our public services, 8% is far too low. It is true that some major projects have their own arrangements, including gating agreements and a much more structured approach, which we hope will drive improvements, but for everything else—the annual contracts granted on a three-year rolling basis, then renewed, extended and renewed again—that is where the opportunity is, that is where the magic is, and that is where the potential for massive savings and better value for money really lies.
It is an old marketing truism that most marketing and advertising directors will say that they know that they waste roughly 50% of their advertising budget, but they just do not know which half. This will be an opportunity for us, when it comes to Government expenditure, to break that particular truism in half and say, “We will know.” The amendment allows the Minister to exclude contracts if he thinks they are too small or are governed by national security, but for everything else in that £300 billion, or as much of it as we can possibly manage, we will know up front what the contract is supposed to achieve, which is, after all, a rather basic thing—one would think that that would be automatically recorded, but at the moment it just is not.
We have to say up front what we are trying to do, and we are supposed to say at the end of the contract, “Well, did we do it?” That has to be evaluated by an arm’s length body according to the existing independent criteria laid out in something called the Magenta Book, which is long established and well respected. If we do that evaluation, we can then ask, “Did it work?” If it did not, we get a learning loop; an opportunity—as the new economy specialists and entrepreneurs call it—to “fail fast”, to ensure that we spot the duds and do not renew or extend them, or allow them to carry on rolling over willy-nilly. Instead, we say, “We are going to change something because this did not work.” That will be published, and then we will not renew that contract in that form. We will change it to fix the faults that would by then have been identified. At the moment, those faults are not being identified and are allowed to continue to roll and roll.
That is a blessedly simple idea. It will also pay for itself, as I said earlier when the Chair of the Public Accounts Committee was giving her speech, because the amount of money that it would save would pay rapidly not just for the existing costs of the What Works Network, but probably for a huge expansion, were Ministers so minded, of such evaluations to other parts of the national procurement effort. It would therefore cost the taxpayer net not a bean, it would dramatically improve value for money, and it would improve the credibility of our public service delivery, which all Governments of every stripe always struggle with. It would be a ready-made arm’s length route for politicians of any party to say, “We are doing the right thing. This is done independently. We will make sure that, next time around, we weed out the bad and expand the good.” That could be genuinely revolutionary.