Cable quizzes Byrne on "Putting the Frontline First: smarter government"

• [Dec 07] Vincent Cable: MUCH of the statement is uncontroversial and, indeed, blindingly obvious. Let me start with the efficiency savings. Is not there a basic problem with announced efficiency savings in Government? If they knew that there was inefficiency, why had not they dealt with it already? To what extent is this new?

Let me pick up on a particular item to clarify what the Government are doing. They say that they are cutting the consultancy budget by 50 per cent., but 50 per cent. of how much? What is their consultancy budget? There are estimates that it could be in the order of £20 billion. We discovered on Friday that they are paying more than £100 million a year for consultants who are advising on the bail-out of the banks alone, so what is the consultancy budget that is now being cut by half?

The Chief Secretary said that he is personally going to vet pay of more than £150,000 a year. He is going to be a very busy man. How many people in the public sector are paid more than £150,000 a year, whose salary he will vet personally? Are we talking about GPs and dentists, heads of quangos and the dozens of people in the BBC who are paid more than the Prime Minister? Whom does he mean and how many of them are there? Are we talking about hundreds or thousands of people?

The Chief Secretary also suggested that he will save lots of money by reducing the number of targets for and the amount of monitoring of local government. That is admirable, but I understand that the Government currently spend £1 billion to £1.5 billion on various audit bodies, notably the Audit Commission, in overseeing local government. How much of that budget will be saved and how many officials who are employed in overseeing local government will no longer be required? If he is genuine about restoring autonomy to local government, why does not he consider ideas such as giving them significantly greater freedom over the business rate system?

Let me make a specific point. The Chief Secretary says that the Government are to give away, free of charge, data from the Met Office and the Ordnance Survey. That sounds straightforward, but those organisations survive by selling data, so if they have to give their data away for free, how will they function as organisations, especially now that the Government plan to privatise them? How can the Government privatise organisations that do not have any income?

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Liam Byrne (Chief Secretary, HM Treasury; Birmingham, Hodge Hill, Labour): I am grateful for the hon. Gentleman's welcome for at least some of these measures. I think that there is a direction of travel in some of the reforms that Liberal Democrat Members will welcome, not least the move towards greater freedom and flexibility for local authorities. When he has had time to study the report in some depth, I think that he will welcome some of the flexibilities that we have talked about. On Wednesday, my right hon. Friend the Chancellor will announce further measures, which attempt to bring a degree more freedom from the regime of inspection and performance setting that has helped to drive up service standards over the past 10 years. We will be able to retire some of that regime in the years to come, and there will be significant savings as a result. It is right that many of the relevant reductions in targets should wait until the next comprehensive spending review, so that the plans that are drawn up reflect the resources that are provided.

The hon. Gentleman asked some specific questions that I will try to answer. First, he asked about consultancy bills. My goal is to save about £512 million from the consultancy bill by 2011-12, by reducing it by 50 per cent. He asked about pay, and I reiterate that we have asked Bill Cockburn, the chair of the Senior Salaries Review Body, to draw up proposals on how to bring greater transparency to the system of setting senior sector pay and how to make sure that value-for-money bodies such as the Audit Commission and others are given a greater role in scrutinising those offers. The simple answer is that I believe that too many people are paid more than £150,000, and my goal is to exert downward pressure. That is partly why I say that we should cut the costs of, for example, the senior civil service by 20 per cent. in the next couple of years.

On data, we must get the balance right. Organisations such as Ordnance Survey can make a great deal of money by supporting specialist engineering and mapping companies with high-quality data. Ordnance Survey runs one of the best-if not the best-mapping services in the world. When there are opportunities to make available information such as low-resolution maps or boundary data, the public should be able to get hold of it free of charge.

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