Good afternoon colleagues, and a special warm welcome to the Chancellor of the Duchy of Lancaster, Pat McFadden. Pat, it is great to see you and the Permanent Secretary, Catherine Little. This is two weeks and two shows, so we are forging that good relationship with the Cabinet Office that we were determined as a Committee to have. Again, thank you so much for coming to join us this afternoon. The two main topics we want to go over with you today, Chancellor, are missions—the whats, the whys, and the wherefores—and civil service issues. If we have time, we wish to touch on intergovernmental relations as well. I am going to kick off with the missions. Every Government coming in will use some sort of language that says this is how we are going to deliver things—that it is a mission, or whatever it may happen to be. Do you think a machinery of government reshuffle is required to help deliver the missions, given how very siloed Westminster and Whitehall are? That is your starter for 10.

Thank you, Mr Chairman. It is a pleasure to be here with you. I will do my best to answer the Committee’s questions over the period of time that we have. To begin with missions, the idea was to have some big long-term aims, as well as managing the day-to-day stuff that any Government have to manage. A Government have to operate at more than one speed—as was famously said, “There are always events” —there is the famous government grid; there will be international engagements that a Prime Minister has to do; there are weekly Prime Minister’s questions and so on. It is very easy to feel incredibly busy all the time and to deal with all the urgent things, but there is a difference between the urgent and the important. I am not saying those short-term things are not important, but we felt before the election that it was good to have a number of big, long-term aims and that is why we had these missions around the economy, the health service, opportunity, crime and clean power. In terms of machinery of government, you are right: there is a lot of Whitehall DNA around Departments. That is traditionally the way spending has worked. These Departments have a very enduring identity—it is remarkably enduring, actually—despite changes of political colour of the party in power and changes of Secretary of State. So, we are trying to do something that is quite ambitious, which is to get them to work across departmental lines to deliver these long-term missions and to make sure that in between the urgent, there is a drumbeat of work aimed towards the long term. The architecture that we set up at the beginning of this Parliament was to have a number of mission boards, each of which is chaired by the relevant Secretary of State, who is the mission lead and is in charge of delivering their mission. I serve on them all, alongside the Chairs. We established a mission delivery unit inside the Cabinet Office, which works with the different mission leads in each of the Departments and then the Prime Minister chairs stocktakes with each of the mission leads to drive progress. In between, there is a lot of informal contact. For example, I have my own bilateral meetings with the Prime Minister. Essentially, that is the architecture we have set up to drive it.

How are the Government intending to have transparency and accountability on the mission boards? Will memberships of them be in the public domain and revised as and when they change? Will we know what the agendas are? Will we know what matrix they are using to measure success, progress, and failure?

A lot of the metrics were set out in the Plan for Change that we published last week.

I have a copy here.

We may come to that, the metrics certainly. In terms of attendance, that might vary depending on the subject under discussion. Location might also vary because one of my messages to all the mission leads is that this is not just a Whitehall exercise. We need to get out of Whitehall and speak to all the expertise there is around the country. So, we will not always say the mission board is meeting today and here is who is coming, but the goals are public. The goals for this Parliament were published last Thursday. So, it is clear what they are trying to do.

Are the boards a replacement of, or ancillary to, the traditional Cabinet Committees?

They are not a replacement for the traditional Cabinet Committees. We have Cabinet Committees, a Home and Economic Affairs Cabinet Committee, and so on, that deal with the day-to-day business of government. Their work carries on as normal.

Who is the ringmaster? Is it you? Do you hold both the carrot and the stick in this increasingly siloed Whitehall that we all know about?

The Prime Minister is ultimately always the ringmaster, but Prime Ministers are very busy people.

He has delegated to you, effectively, has he not?

On a day-to-day basis, he has asked me to co-ordinate and drive this work, but I stress that there was a decision taken to have these boards chaired by the mission leads to make sure they were accountable for delivering their mission. It would not be the right thing to do to just relieve the Departments of their responsibilities and locate it all in the Cabinet Office. We have an important co-ordinating role. We can chase, we can ask questions, we can challenge, but the actual delivery and the bulk of staff and so on are in the Departments themselves.

But you cannot tell; you cannot instruct?

Ultimately the Prime Minister can, of course.

Is that power of instruction also delegated to you?

If there was a dispute, it would be elevated to the biggest authority in Government: the Prime Minister. We prefer to work in a collaborative way, but ultimately the reason we have stocktakes with the Prime Minister is so that he can press us. The function of the meetings is to ask if we are going far enough, fast enough, to ask for more information or what our plan is to get to this.

The Prime Minister said recently that mission Government will, “Change the accountability incentives in Government.” What did he mean by that?

He meant that when you set out big, long-term goals like we did last Thursday, it is clear what the direction of travel should be so people know what their aim is over the next five years.

Yes, but how does that incentivise accountability?

If you are the Secretary of State for X and you have an aim in this document, you know the Prime Minister is instructing you to do everything you can to deliver it.

I appreciate that some machinery of government reshuffles are just changing the brass plate on a door, but as you are a few months into government, do you see any merit at all in a fundamental review of how the machinery of Whitehall looks? Because I think there is an anxiety, if I can put it that way, of trying to retrofit a new way of delivering government and policy from an old machine.

I cannot say never to that because you never know what a Prime Minister might decide to do on machinery of government, but we came into office without the intention of tearing up the departmental structures. I am one of the few people in this Government who served in the last one.

Indeed, with distinction, I think.

There are not very many of us because we were out of power for so long, so most Ministers are new. We have some collective experience of the past, but not a huge amount. Machinery of government changes might have their fans; they might have their sceptics. On the sceptical side, you could argue that they can take up a lot of energy and a lot of heat and cause a lot of friction, and people get very preoccupied with the new name, the new identity, the new this or that. Do you really want to do that, or do you want to focus the energy of the system on the outcomes? We took the latter view: that we should focus on the outcomes. Does that mean the departmental structure will always stay exactly as it is? Of course I cannot say that, but we did not come into government intending to do a lot of machinery of government changes. There were bits and pieces; for example, you said we were maybe going to touch on intergovernmental relations later in the session. That was a function that was in the Ministry of Housing, Communities and Local Government under the previous Administration, but I think I am right in saying the reason it was there was it was a personnel decision. It was because Michael Gove was the Secretary of State, and he was judged—for totally understandable reasons in my view—to be a Secretary of State with experience and standing in the field of intergovernmental relations. This Prime Minister took the view that the natural home for that function was probably not at Ministry but was back in the centre of Government at the Cabinet Office. So, there has been some movement of function but not wholesale redrawing of Departments.

There has been some. You talk there about energy to deliver, how much delivery energy can one find in a tepid bath?

The systems do not always focus on delivery as much as they should. There are a lot of process, and processes are there for a reason: people like to do things properly. What I think the Prime Minister was saying in using that phrase was, “Let’s focus on delivery and focus on outcomes,” which is very much the spirit of the document he published last week.

Thank you. I have a few more quick questions. First, on mission boards, is it just Ministers who sit on the board or is it populated with officials and/or external members as well?

We have officials and people can be invited in. I am keen to open these things to outside expertise so it is not just Ministers—so that Ministers are there, but others are too.

Let me ask you this almost philosophical question: you referenced you were a Minister under Gordon Brown, quite a long time ago when you think of it.

No!

Has how Whitehall now works and how the world of work and policy delivery has changed these last 14 years been a shock to you? Is there anything that you found where you thought, “Dear God, I thought they would have finished doing that by now,” and it is still on the agenda?

It has not really been a shock. There we are.

You are a very sanguine man, are you not? You do not get shocked easily.

A lot has changed. My goodness, since 2010, when the last Labour Government left office, the two most obvious things have been Brexit and the experience of the pandemic. They both had a big influence on Government and what they did. When we left office in 2010, we were just coming out of the great financial crisis. An awful lot has changed, and the country is a very different place. Technology has changed massively. I made a speech yesterday about how that should change the functions of Government, but a lot of the Whitehall processes are still quite familiar.

On achieving the outcomes of those missions, as a Government you can set the missions and you have a huge role in implementing them. As I come from a local government background, I am quite conscious that they are on the pointy end of making a lot of this stuff happen, particularly when you are talking about growing the economy and having that across the regions. How are you planning to work with local government, the private sector, and the devolved authorities to make sure you are achieving everything that you want throughout the UK?

The first thing to say is they are challenging to achieve. They are not easy. This is not like me running my Saturday morning parkrun and saying won’t I be doing great if I can do it in less than 30 minutes. These are challenging things to do. I would like to think they are the country’s missions, not just the Government’s: we have a national challenge on waiting lists, we have a national challenge of not having built enough homes for many years, and so on. So, we definitely need the buy-in, support, partnership and expertise of others to do that. Local government and mayors are very important. I know local government is under a lot of financial pressure and that narrows the options, but at its best, the great advantage of local government is it can be innovative and creative and show you ways to do things that may not have been done elsewhere. Something I said in the speech I made yesterday about reform of the state was the idea of test and learn, which means not always doing policy the traditional Whitehall way of the White Paper and national implementation all at once but taking an idea and developing and testing it. There may be some failure at first. People are scared of failure partly because they will come in front of a Committee like this and people will say, “Why did you let that fail? Why did that project not work?” But we have to have a bit more tolerance of that if we are going to develop things in the right way because human life is complex and getting very clever people at the centre to design it perfectly does not always work. Look at the way products and services have developed in the private sphere, particularly with services and technological companies: the idea of test, learn, fail, develop and make it better in real time is embedded. It is very innovative and creative so that is what we want to do and why I announced a few of these projects yesterday, which are in partnership with local authorities.

We have spoken a little about the machinery of government. You have outlined the mission boards, the delivery units, and how the mission leads and the boards fit together. The Prime Minister talked about rewiring the British state. Those are all mechanical descriptions. What other changes do you anticipate? Is that going to be as a result of seeing whether anything continues to work or not?

The test and learn idea is an interesting one that I was just speaking to Ms Edwards about and some of this has been done. One of the examples I spoke about yesterday was the universal credit system. That was a story of two halves. When the idea was first mooted in Government it was very difficult to get off the ground, and they burned through a lot of money without making much progress. They had to stop and, to use another term of the moment, reset, and they took it away from its usual circumstances. They set up a small team of about 30 people, which included policymakers, IT people, and frontline workers, and they started small instead of trying to do it all at once. They took it step-by-step, learning as they went, so there was a very gradual roll-out. In the pandemic, when the system was under a lot of pressure instantly, it performed very well. You can always have a debate, maybe a political debate in this House, about how much the benefits should be. That is fine but as a mechanical system of getting money to people, they developed a system that worked well under great pressure during the pandemic, so I use that as an example. Another example is the passport service, which works extremely well. But again, a few years ago and some of you are new MPs—

We had urgent question after urgent question.

For those of us who were in the House some years ago, it was very creaky, and our constituency offices were under siege from people who could not get a passport in time to go on holiday, so the service was rebooted and reorganised. Sometimes, you now hear people use it and give a bit of a backhanded compliment, because people have a certain perception of what using a public service is like. They then use the passport service and say, “Do you know what? It was really good,” and there is a slight tone of surprise, which is a shame, but I would like that tone to be seen in more public services. The truth is there are too many things in the country that are not working properly at the moment. You asked me about other changes; I am keen to foster a culture of curiosity about why some things work well and why others do not, and to learn from the ones that work well. Curiosity is a duty of those involved in public life, to learn in that way.

Does that curiosity extend to trying things and allowing them to fail and then learning from them and improving?

I believe it should. We need a greater risk appetite. There are a lot of things that militate against a greater risk appetite. One could argue that the structure of being hauled before Select Committees sometimes does that because people will be asked why a project failed, but that is part of our democratic accountability. Another example is the previous Government set up ARIA which channels funds for research, and it was deliberately designed to have a greater risk appetite and probably a greater risk of failure. It was designed like that because when you are engaged in cutting-edge research, if you only bet on the absolute safe bets you will never find the new discovery. So, in circumstances like that it is sensible to build a risk appetite into it.

On that, is it your assessment that you are able to foster a risk appetite and that inquisitiveness that you spoke of with very detailed, experienced people? Buying that in on an ad hoc basis and relying on the enthusiastic generalist appears to be a general trend of moving away from expertise in the civil service.

The enthusiastic generalist is an old debate, is it not? How can I put it?

I am never entirely convinced it is one or the other. You should have both.

It is a very old debate. Sorry to keep referring to the speech I made yesterday—

We will all go out, Chancellor, and buy a copy of this speech.

You can get one for free, actually. I talked yesterday about the notion of a tour of duty. There has been a programme already but on a very small scale about innovation fellows. The idea is to ask people to come in for a six to 12-month period and help us crack a problem. They do not have to have a whole career in the civil service. It does not have to be so life-changing that they have to do it for the next 10 or 20 years. They need only come in for a short period. One of the challenges we have, particularly in the tech world, is salaries and what people can earn outside compared with what they can earn inside. But I would like to appeal to the public-spirited nature of people who could help us solve some projects that deliver for the public, and there are people out there who want to do good for the country. I am not saying they are going to work for free, but they do not have to make a whole career of it. So, the idea of a tour of duty is one that we should use.

I agree with you. Can I ask you one thing that flows from that, about the ACOBA rules? There are those public service-motivated people who say, “Fine, there is a nut that needs cracking,” and when the Cabinet Office or a Secretary of State reaches out and asks, “Can you come and help us, we understand you have expertise, commercial expertise or whatever?” the reply is “Yes, of course, I would love to.” They then have inside knowledge because they have been working within a Department and ACOBA almost says you cannot go back to the day job once you have finished because you have specialised knowledge, you have to have everything cleared, and there has to be breathing space and all the rest of it. In order to get that tour of duty, there need to be some changes to ACOBA, surely.

Let me bring Cat Little, the Permanent Secretary, in on this because this has been tried in a small way with innovation fellowships.

There is a general point about ACOBA. ACOBA can be a massive deterrent to people coming in and that is on the assumption that people understand exactly how the rules impact them. There is a lot more that we need to do to explain it, but we need to make sure that there are exit strategies and that the terms and the conditions are clear up front. That is what we are doing with innovation fellowships; they are not coming in on full civil service terms and conditions. We are creating secondments and we are creating bespoke arrangements so that there is a clear exit path and a clear understanding about the difference of the role. So, expanding it, yes, and looking again at how we define the rules, yes.

It would be very helpful if we could have a note on that in due course.

I want to go back to the test and learn idea, which is interesting. How are the teams going to be made up? Are they going to have junior and senior staff, and external people?

That is the idea. The Chancellor announced a budget of £100 million for an innovation fund to fund these projects. I announced a few yesterday based on the twin challenges of temporary accommodation and family hubs. The idea is that you have policy people, practitioners, technology, and the users of the service because that is who it is all for, to help crack these problems to see if we can do better. We also need to use the experience, as Ms Edwards said, of local government, some mayors, and some local leaders because they know their area better than anyone. Those are just the first couple, but there will be more of these going forward. My colleague Minister Georgia Gould works a lot on this idea, and this is just the early stages of it.

Will they have different rules to the standard civil service rules, financial regulations, and governance? Will they be able to move quickly?

They will still have to account for public money and so on, but when you start this, you will realise that it will not always work at once. They may get something wrong, but if something is going to go wrong, I would rather it went wrong in a small way than in a huge way, and the cost of the status quo is often very high. There is a huge amount of money spent collectively around the country on temporary accommodation. Are we getting the system right? Can we improve the system? Let’s try this project and find out.

You touched on the fact that some will fail. How are you going to bed in the acceptance—from the Minister all the way through—that the project failing is about learning the lessons from it, rather than a failure that therefore should not have been done?

That is the basic concept from the get-go. There has been a lot of talk of Elon Musk in recent months and he says that every time one of the rockets blows up in space, they learn a huge amount. They learn exactly what went wrong and how to fix it for the next time. Not everything works the first time.

But how are you going to embed that? How are you going to convince the staff, in particular, that they are going to be assessed on how they went about it, the lessons learned, and what it can lead to in the future, rather than assessed on the fact that it did not succeed?

They know from the beginning that that is the idea behind it. You are testing and learning. Failure is not a final thing, it is just the way you did it that time did not work so you can improve the way you did it for next time, hopefully.

I hear that, but how are you making sure that the more junior staff are convinced by that?

It should be the spirit of the team that they are working in.

Could I perhaps just add to that? It is my responsibility to make sure that that is the case across the whole of the civil service. It is a combination of culture and tones set at the top by our political leaders. The Chancellor of the Duchy of Lancaster is entirely right, we set that clarity out front, but it has got to be backed up by performance management and great line management training, so we set standards for line managers across Government. We need to build it into the way in which they coach, mentor and support staff. It takes a bit longer in an organisation with the complexity and size that we are. So for the Cabinet Office, we have to make sure that there is process through performance management and incentives and that people understand the training and the line management expectations.

When these various projects have happened and you have learned lessons, good and bad, how are those lessons going to be shared more widely around the civil service?

If they manage to deal with the two challenges that have been set in different places—these are not in the same place—then you try to replicate that elsewhere. But again, one of the things to remember is not every area of the country is the same. They have their own characteristics and so on. So, it is not always a case of taking it out, like with a cookie cutter, and putting it elsewhere. But if we get success and we think we can save money or get a better outcome, or hopefully a combination of the two, then we will try to replicate it elsewhere.

Where you do not get success—

We will not try and replicate it.

But there are still lessons to learn; how are those going to be shared widely?

People will know what went wrong and why it did not work. They say failure is a good teacher. We should learn from failure as well as success.

There are two things I would add. First, we have an evaluation community across Government: every Department has expert evaluators, and one of the things that we are very keen to promote is active live evaluation of every policy and programme that we do in government, which is important and a real skill. It is a very professional skill set. Secondly, we have amazing communities of best practice and professional networks in Government that get together to share learning all the time and we have to talk about and celebrate it. The civil service is not very good at talking about when we have got things wrong and what we have learned. We are not very good at celebrating when we get things right. We have the Civil Service Awards this evening, which is our annual event, and I am looking forward to celebrating a lot of our winners and some of the great things that they have done.

We have heard elsewhere that even within Departments there is a belief that data cannot be shared between one directorate and another within the same Department because of GDPR and all the rest of it. What you are both saying is compelling and common sense. But you have the accountability frameworks, which organisations like the PAC take very seriously, which do not in any way, Chancellor, encourage or countenance failure because that is a big black cross next to your name, and you are shunned for eternity. Do you see changes to the framework to inculcate that? Between the mission boards aligned to civil service reform and this oil tanker of “risk-averse, nothing can be allowed to fail and money is just pumped into it to keep the myth going of a work in progress”, how do you change the culture of incentivisation and risk when society is moving away from entrepreneurial risk-taking? You are always trying to push the civil service and the machine in a way that the tide is flowing against.

I do not know that society is moving away from entrepreneurial risk-taking. Society likes the fruits of entrepreneurial risk-taking. There are companies that we use every day: Airbnb, Spotify, and WhatsApp that did not exist 20 years ago. They were all built on the basis of entrepreneurial risk-taking and they have changed the way that we think about travel and the way that we consume music. When I started consuming music, I went to the record store and bought a vinyl album that had 12 records on it.

Is this when we have to say you do not look old enough?

I played those 12 records and I have been through all the iterations of cassette tapes; I showed my daughter some cassette tapes, she could not believe it.

Marvellous things.

We then went through the world of CDs. Now we are in the world of single songs and playlists, and it is entrepreneurial risk-taking that took us there. I could say the same for travel.

I take that point but those are usually a very small amount of fleet-of-foot experts focused in a particular area trying something different. I am a huge fan of it, but those are not the immediate words that one would put your hand to when seeking to describe the organisation of the size, complexity, age, and maturity of the civil service and UK Government.

That is right, but when the world is changing so rapidly in the way that I have just talked about in terms of the consumption of music in the private sphere, let us take some of the learning from that and apply the ingenuity, creativity, and capacity to change to the public sphere too. It is not easy; I could give up.

Do not do that.

I could say, “It’s not worth the effort. We’ll just do everything the way we have always done it. Don’t worry, you don’t have to innovate because if you never innovate you have no chance of failure.” But I do not think that would be a very good way to run Government.

I am sure as a Committee we will, as you would expect, monitor this and be interested to hear about progress as time goes by.

Thank you for everything so far. Taking it back to the very beginning, what excites you and therefore the country? What should we be excited about with mission-led Government as opposed to whatever-led Government we have had before?

No one is going to be excited by a label, but there is a serious point underneath this, which is a loss of faith in the capacity of Governments to deliver outcomes because people are seeing their tax burden rise, but there is a feeling that things do not work as well as they should. Waiting lists are longer, we do not build enough homes, and so on. The label I care less about, but the outcome I care about. If we can get the system to focus on the outcome and drive for a better outcome in any of those fields that are in the Plan for Change that we published last week, then people will notice the outcome and that these services we are talking about are trying to deliver for people. I do not know whether you want to call that exciting, you could call it just these services doing their job, but it is important. I also believe the basics in politics and Government are grossly underpriced. People always want the new and the shiny and the exciting, but a health service that treats you in decent time is a very good thing and it should not be undervalued, and the same with the other public services that we are talking about.

In terms of the missions, it has to be cross-cutting. We have talked about silos, so in terms of removing the silo aspect of, let us call it, a project, what would success look like for you? Could you give an example, if you wish, but in terms of avoiding that silo handbrake?

A lot of them cut across Departments. If you want children to have the best start in life, which is one of the things we talked about in the document, that involves the Department for Education, but it also involves the Department of Health and Social Care. It also involves making sure there are enough decent homes in the country for people to grow up in a decent environment. It is more than one Department and that is true of most things here. So, we are trying to encourage people to work together. I know this will sound a bit like a subjective point, but one of the fortunate things about the team of Ministers that have come into Government is that at Cabinet level, it is pretty much the same team as was in the shadow Cabinet; they have worked together for a few years. The team spirit is good and so there are some good grounds for working together, but I am aware of the departmental DNA as well. It is a strong thing and it is a strong pool. This is not easy, but it is important if we want to get the right outcomes.

I agree. We have mission champions in our party, and I know you have mission champions at senior level. My last question, probably more for Ms Little: is there a consideration to put mission champions at the very low level of teams so you have a mass of DNA, as it were, coming from the other end?

It is a great question. Every single Department has taken forward their responsibilities for missions in the way that is most appropriate. I know there are Departments that have created mission focuses at every single level. Obviously, some Departments are more involved and others less so directly. So yes, but I do not think it would be a consistent one-size-fits-all approach.

In these mission boards and so on, who arbitrates? I appreciate where the Prime Minister sits in the pyramid, but in that perennial battle of delivery between the Cabinet Office and the Treasury, who has the whip hand? Because you are on all the mission boards, policies evolve and there is cross-departmental working, and so on, everything is going hunky-dory, and then the happy faces of the Treasury come across it and frown, wrinkle their noses, raise their eyebrows, and say, “It is a lovely idea, but you have to wait for the spending review, we simply cannot afford it, or we are not doing that” and so on. Are you allowed to, metaphorically, shout at the Treasury? Not that one would shout at the Treasury, of course.

The team spirit between us and the Treasury is very good, so there has been no need for any shouting.

You have said that with a wonderfully wry smile, Chancellor, so thank you for that.

You pointed to a need for a greater emphasis on users of services, on not having a cookie-cutter approach, and a need for regional and, in my case as an MP for Glasgow East, different approaches across our family of nations, which was interesting. Something that has long vexed me is whether homelessness policy people speak enough to homeless people and whether drug use policies, which are a big issue in my seat, have been developed in consultation with drug users. It might be a good place to start. Could you talk a little about how you involve users and the people who need to benefit from these improvements?

It is a very good point. Regarding homelessness, there are well-documented examples of people bouncing around between different services, probably in a cumulative way, not getting a good outcome for themselves and costing an awful lot of money. There was a famous article written many years ago called Million Dollar Murray about a homeless guy in Reno, Nevada, who was an example of this. They worked out that for all the money being spent on Murray, they could have put him up in a $1 million apartment rather than him bouncing around these services. So it is an international problem and we have examples of people like Million Dollar Murray here in the UK as well. Joining this up is important and that is what we are trying to do at a macro level through the mission work, but it is important when you get to the service on the ground too.

Ms Little, I wonder if you could give us some concrete examples of how you are going to go about that, or how the Government go about that. Where do they see improvements could be made?

Every single part of Whitehall has taken the challenge that the new Government have brought to us, which is very clear: we need to consult and engage end-users, and we have to diversify the way in which we develop policy. We have done that in the past. Supporting families is a good example of where there has been intensive user engagement. But when we look at some test and learn examples that the Chancellor spoke about, that is a good example where we are talking directly to end-users in local places. I will not go through all the different locations we are currently thinking about working with, but the team has people seconded from the frontline in the team in the Cabinet Office and we are engaging with people directly on the frontline.

It is a good question. If you go through the different policy areas, some are reserved and some are devolved. If I take the example of energy, there are aspects of energy policy that are reserved, but there are also things like planning frameworks which are devolved in different parts of the country. The dialogue on this has been very good between the UK Government, the Scottish Government, and the Welsh Government. Everybody knows there is a challenge for the country to move to clean power. Everybody wants to do it, and it has been done in a respectful way so far. In terms of the private sector, there is a lot of private sector investment in this field, and there is potentially more. When I went to Scotland, I think in October, for the first meeting of the Council of the Nations and Regions, ScottishPower was announcing a doubling of its investment from £12 billion to £24 billion over the coming years. That is not money from the state but from a private company going into clean energy. The message from the industry to us is if you can deal with the planning blockages and you can help us get connections to the grid, there will be more investment that wants to come in to the UK. So, it is not just an energy Department issue, it is an issue for all the different governing Administrations throughout the UK and for the private sector too. Around the world, in this energy transition, most of the investment that is spent in different countries will come from the private sector. This Government believe in the state having its front foot forward on this; that is why we established GB Energy. We think there are certain technologies where some shared risk-taking can help make a market and get things moving. We believe in industrial policy. We do not believe that if you leave everything to the market, it will work. But over the piece, even allowing for that quite, as I say, front-leaning posture, most of the investment will come from the private sector.

I am very conscious the Treasury Minister is on his feet and votes are expected shortly. I presume we would all like to pause and go to vote when the bell rings. I am perfectly relaxed about it, but you see, Pat, it is the enthusiasm of the young which is driving us to do these things. So, let us just try to go through this; Michelle, had you finished?

I am not redesigning the whole of local government, but there is an English devolution White Paper coming. There is an offer to parts of the country that do not have mayors to have them, but it is an offer. My own personal view is that elected mayors have been a successful project in the country. We started it when I was in government last time with the establishment of the Greater London Mayor. You referred to Manchester. I represent Wolverhampton in the West Midlands, where we have had two good people as Mayor of the West Midlands, first Andy Street and now Richard Parker. It is a good model. It might not be for every part of the country as they might not want it, but these powerful voices have done well. So, I do not propose redesigning local government as part of this project; as you say, the tapestry of the UK is varied, but when you think about these goals, most local authority leaders will want to do what they can to implement them in one way or another.

As a former local government Minister, the more unitaries and the more directly elected mayors we have the better because it is much easier for Whitehall and Westminster to deal with, rather than this multi-layered mosaic that we have, as charming and delightful as it is. Peter, on the subject of charming and delightful.

We are going to have to disagree on that point, Mr Chair. On the matter of test and learn, Chancellor, I have been reading your very good speech while I have been in the room. I have often thought that local authorities are a very good example of this with 330-odd different models trying to address the same problems across the country, and you can take what you want from the better of those and ignore the worse. But on the question of better or worse, the nature of a trial is that some things are going to get better, and some things are going to get worse in places, which raises the question of a postcode lottery. Where does the democratic accountability lie? Because if a council messes up, you vote the council administration out, or you at least have that option if they have failed your community. When it comes down to parts of the civil service and arm’s length bodies—I speak from experience as a former local government leader—getting things wrong, and sometimes incredibly wrong, your only option is trying to beg and beg for months for a meeting with a Minister for 15 minutes where you are being pulled in many different directions. If we are going to be experimenting on bits of the country, where do those residents within those bits of the country get a say in it?

These test and learn projects should involve residents. It is never a perfect thing to do, but they should be doing it. As I said earlier, this is about better results for citizens, so why would we not want to do that? At the more macro level, in a democratic system like the one that we have, the truth is that if a Department messes up it will be the Minister who is in front of this Committee, or whatever the relevant Select Committee is in the House of Commons, and they will be answering for it. That is the nature of our system and that has always been the case.

I accept that with any uniform policy that is a reasonable expectation, but in the case where you get a particular difference in one locality from another, that seems to be diminishing the concerns of those particular localities that are disproportionately more affected than the rest of the country.

There is variation around the country at the moment and we live with it. Some places have better bus services than others. There is this phrase, “postcode lottery”. There is always a tension if you can get something in one part of the country and not in another. In the nature of devolving power, you will get differences. There is not much point in devolving power if you still want everything to be absolutely uniform. If we are going to be a country that believes in devolving power, then that is a consequence. I still go on TV 20-odd years, 25 years after the Scottish Parliament and the Welsh Senedd were established, and people say to me, “Do you not know that this happens in Scotland but does not happen in England, or the other way around? What do you have to say about that?” as if this was a great new discovery. I say, “I know this is not the way you meant it, but it is in the nature of devolution.” Is that a Division bell? Maybe I better stop talking.

We have a minute, because we have eight minutes to get down there. Lauren, you wanted to come in?

Just very briefly.

I will give you a quick answer.

On the outputs for the test and learn, they are described as small projects at six to 12 months. Are you envisioning them being a quick-win approach, or are you expecting them to get deeply into problems like temporary accommodation? Because if you look at that holistically, that can go right back to the problems of housing supply in the country.

Yes, it can, and they cannot magic up more housing and properties. What they can do is look at how the available properties are used, look how long families are staying there, whether there is a quicker way to move them into permanent accommodation, whether there is a better way to use data, or whether they are getting the right services when they are in there. There are often vulnerable families living in accommodations you would not want to live in for a long time. So, there are a number of questions they can look at without getting a magic wand out and saying, “We are going to produce X more houses in this area over the next six months.” We want to build more houses but that is a longer-term project. Mr Chairman, I am in your hands but I think the Members want to go and vote.

I think, colleagues, there are at least two votes now so we will not come backwards and forwards in between votes; we just might as well stay down to do them both. Sitting suspended for Divisions in the House. On resuming—

Let me just take you back, Ms Little, to a word that you used before we broke for the Divisions which, rather like the words PowerPoint, sends a shiver down my spine and turn my whole being to lead. You used the word consultation, “Once we have consulted on” whatever it was. Whether one liked the changes to the NPPF, which the Chancellor brought forward shortly after the general election, the directness and the speed with which those changes were introduced was refreshing. No consultation, just a ministerial decision, “Judge me by my actions, this is what I want to do”. How concerned are you, Chancellor—this might speak back to that risk aversion, slow everything down approach—that we consult to the death on everything, instead of Ministers just saying, “This is what we’re going to do, this is why we’re going to do it, this is how we’re going to do it and this is how we’re going to evaluate the doing and the outcomes.” Do you see changes in the approach to Government itself being more prepared to be, for example, judicially reviewed in that balance between, “Oh, let us consult about moving a semicolon from page 7 to page 8”, which we were getting into the habit of?

This is a very broad question. The Government want to deliver, they want to produce, they want to focus on outcomes. Sometimes you have to consult over big changes. You mentioned the NPPF, and it is generally acknowledged that it takes too long to get things built in the UK. My colleague, the Deputy Prime Minister, was on the media on Sunday talking about her plans to break through some of that, and to get things built more easily. She is determined to do that and has the full support of everybody in the Cabinet for what she wants to do. I cannot give a blanket answer about consultation one way or the other, but people are impatient for delivery and they are right to be.

Yes. So, maybe a more flexible approach?

Sometimes you have to consult by law and all of that, but we want to deliver, and time goes quickly.

I just wanted to pick up on the reset of the EU-UK relationship. I am obviously very aware that the Chancellor of the Exchequer has recently been to Europe to meet with EU finance ministers, which is fantastic. I am just wondering if you can give us an update on progress, or a timetable for the negotiations around that issue?

OK, this is a big important question and the really important point that I want the Committee to understand about the Government’s position is that there is a mood abroad that somehow we have to choose between a relationship with the United States and a positive relationship with the European Union or with Europe. We do not have to choose; this country should aim to have a good relationship with both. It is a really important point to make. Not everybody agrees with that; there are political voices out there who say, “You can’t do that and you have to choose.” We do not believe that; that is the first point to stress at the beginning. We are not going to rerun the Brexit debate and all that grand architecture—that debate has been had, the country has decided—the task of leadership that falls to us now is to make the best future we can, having made that decision. I believe that Russia’s invasion of Ukraine has really focused minds on some of the things that used to divide us. And when it comes to our fellow democracies across the channel, we have a great deal in common in terms of values. Within that position, we want what the Chancellor referred to yesterday as a good, positive, adult relationship. There are certain specifics we would like to see, for example, a veterinary agreement: that would really ease the burden on our farming community, our food producers and so on. Do we really think it is important to have different standards on food between us and the European Union? I am not sure that we do. There are specifics that we will pursue. The atmospherics started off in quite a good way, but these things are a discussion. There are interests, and we will not do anything that we do not think is in the UK’s national interest, but we think it is in the UK’s national interest to have a good trading relationship with a group of countries which, taken together, remember, are still our biggest trading partner.

I completely agree. Are there any timetables for those individual negotiations, for instance, on the veterinary agreement?

There is a standard review of the TCA timetable anyway, but I do not think you should expect this just to be around that. That may well just look at the technical operation of the agreement. There are other things we can add to it.

Dear God, there is the Division bell again. That was the shortest 20 minutes I have ever been promised. Shall we just crack on or do we have to suspend?

Yes.

I am not sure. It is in your hands, Chair, but I think, if there’s a Division maybe people will want to vote.

We are required to, I am sorry, I have no discretion, colleagues; I am required to suspend yet again while we go and vote on the criminal law. Our apologies to the fee-paying public, and we are not even offering ice cream and Kia-Ora, which I suppose ages me. Right, let us go. Sitting suspended for a Division in the House. On resuming—

Welcome back. I am told that is the last Division, so we are okay.

I believe so, yes.

But just for today, not for ever.

I know time is pressing; we want to deal with two subjects, one incredibly briefly, and then one in a little more detail. Just a very quick question, please, from me on behalf of the Committee with regard to the Cabinet Manual, eagerly expected and awaited, like the Beano annual of old. The previous Government made a commitment to this Committee that we would have sight of it before publication and would have an opportunity to comment on it, does that still stand?

Are you telling me that the previous Government made a promise to you, and did not keep it? I am shocked, Chair.

That is because the Cabinet Manual was not published, so my question is, as it is going to be published under your watch, Chancellor, do you stand by that commitment, or are you resiling from it?

This document was written in 2010 or 2011 and has not been updated since. Is it the view of the Committee that the lack of the updating of the document has had a serious effect on the operation of Government?

We are not sure as we have not seen it yet. Are you therefore proposing to do away with the Cabinet Manual?

No, but I am saying it has not been updated for 13 years. There is no doubt that the document is out of date. It still has us as members of the European Union, as you may be aware, and various other things, so it will need to be updated at some point. But you will know the point I am making is that there has not been an update in 13 years, and we have been in office a few months.

Our understanding was that the work was in hand, but that the election got in the way.

Is that is what they told you?

Have we been misled?

I do not know.

Ms Little?

Sorry, I do not know who told you what. Of course, we have done some work on it, but when you have a new Government it is our job to revisit the content and to make sure that it is fit for purpose with Ministers, and so we will be doing that as is appropriate.

What I thought was going to be an easy question has now turned into the Schleswig-Holstein one. So, can we just confirm that there is going to be a Cabinet Manual?

There is a Cabinet Manual, but it is out of date.

Okay, let us break this down into its composite parts. There is a Cabinet Manual which is out of date. Is it your intention to review, revise and reissue?

Yes. It is hard to defend a document that is out of date.

I am not asking you to do that.

The reason I am answering in the way I am is, this has not been updated for 13 years and counting. I am not sure to what extent the lack of the updating of the document has had a serious effect on the operations of Covernment, that is open to debate. You could have a view, I could have a view. What we were determined to do when we came in was update the Ministerial Code, and we did that. It has some important changes in it, including the fulfilment of a manifesto commitment that we had to give the independent adviser the power to launch its own investigations. We also put the seven principles of public life more at the heart of the document, and one or two other changes too. That Ministerial Code was the priority for us in the first few months, and it was recently reissued. I am sure the Cabinet Manual will be updated at some point, but I could not tell you exactly when.

I remain to be convinced whether that is a yes or a no answer. If you have reached the conclusion that the Cabinet Manual has no meaning and little relevance, tell the Committee.

I have not reached that conclusion. What I am saying is, we were focused on producing the updated Ministerial Code, and we did that and published that a few weeks ago.

Yes, but this is a question about the Cabinet Manual. So my final question on this. We will take it as a given that it needs review and revision because it has not been done since 2011. We understand that that will take a period of time. If it is to be done, and prior to its publication, is the commitment of the previous Government to the predecessor Committee still live, that this Committee would be shown it prior to its publication, with the opportunity to comment upon, under the Chatham House Rule?

I have not got to that point yet and I am not sure, let me look at where we are when we get to updating it.

In the spirit of forging a positive relationship between the Committee and the Cabinet Office, it would be a welcome thing to do. I have written to you on this not a very long time ago, so it is not a criticism that I have not had a reply, but a detailed reply to that would be helpful. In the time still available, let us turn to intergovernmental relations, and to John, I think.

I think it might be my good friend Mr Baker here.

It is indeed, thank you, Mr Chair.

I am happy to ask a question, Chair, if that is helpful?

Whichever one of you.

Thank you, Chancellor. You talked earlier about the move for responsibility for intergovernmental relations from the Department for Levelling Up, Housing and Communities to the Cabinet Office. The Cabinet Office website lists you as a Minister for Intergovernmental Relations, but it is not included in your official list of Ministerial Responsibilities updated in November. So, just for belt and braces, could you confirm that you are the Minister for Intergovernmental Relations, but also what you see as the responsibilities in that role that you will be taking forward?

Yes, I am. There are major responsibilities. There are always going to be different political parties around the table in different parts of the country and it is really important that, accepting those political differences are there, that we have good working relationships. The Prime Minister deliberately chose to go to Scotland, Wales and Northern Ireland in the first weekend after the election, so we got off on quite a good footing. There are a number of structures that have grown up over the years, many from individual agreements, so the architecture for quite a lot of meetings is there. For example, there are some structures that grew out of the Good Friday agreement, there are others we have looked at. We take the meetings seriously but, even more important than the meetings, is that we try to have a good working relationship on the understanding that sometimes there will be political differences. As I said in our earlier discussion, it is within the nature of devolution that there will be different policies on some things in different parts of the country. But the Prime Minister took the view he wanted this function at the centre of Government, and I was very happy to do it. It is a serious responsibility and I certainly take it seriously.

The structures which are in place are fairly new because they were reviewed in 2022. In terms of your experience thus far, do you think they are the right ones to effectively help that reset of relations that we have talked about, certainly with the devolved Administrations? I know it is something which you have talked about previously, so are those structures helping support that ambition?

Yes, the structures do help to support it. If you started from a completely blank sheet of paper, you might not create all these different bodies, but they are there for a reason. With most of them there would be objections to taking those structures away because the agreement to have that body came out of something. We are respectful of the historic reasons why it has built up in this way over the years. The structures are important; they are the products of various agreements. Like any of these things, the informal bilateral meetings and human contact you have are as important as the formal round-the-table meetings. The Council of the Nations and Regions met a couple of months ago, the British-Irish Council met in Edinburgh on Friday and there was an inter-ministerial council that I chaired on last week on 3 December. We have had meetings with the mayors. On English devolution I should say the relationships between central Government and the mayors are the responsibility of the Deputy Prime Minister. When we talk about intergovernmental relations I am talking about Scotland, Wales and Northern Ireland. These structures are active and they are meeting.

In terms of the frequency of meetings, do you think that these structures are meeting frequently enough, is it about right at the moment?

Yes, I do not think there is any lack of frequency of meetings, that is not the concern. The important thing is you have a good, substantial discussion when you do it. When the Council of the Nations and Regions met, for example, we focused quite a lot on energy and inward investment, and it was a good discussion. We have had informal work, as well. I can give the Committee an example. This was not part of the formal structures but, during the summer when there was some concern about the Mpox outbreak in various African countries, the Government did what you would expect, which was some proprietary work around what should happen if there were cases in the UK. Since then we have had a few cases in the UK. We had two or three online meetings which I chaired, involving the Health Ministers from Scotland, Wales and Northern Ireland and the Health Secretary here, just to check that we had an adequate vaccine supply and to make sure that health services in different parts of the country were talking to one another. How could we know, for example, if there was going to be a first British case, where in the UK it would be? That was not part of the formal structures, but it seemed to us to be good practice to work like that. If you have that spirit, you can take it into other areas too.

Absolutely, but there will be issues where there are disputes and disagreements, I am sure. Over the last Parliament there were significant disagreements over the interpretation of the Equality Act, certainly with the Scottish Government, which ended up in the Supreme Court. There was great disagreement over the implementation of a deposit return scheme as well, which never actually happened in Scotland. These are very high-profile disputes, and it struck me as surprising that at no stage was the actual dispute resolution process, created in 2022 as part of the review, used. Do you think that the Government would use those structures and the dispute resolution process to address issues like that?

They could, but there is more than one mechanism for resolving disagreements. There is a structure of common frameworks, where disagreements are supposed to be thrashed out, particularly when they are to do with issues of trade and regulation and so on. There is the UK Internal Market Act, which is on the statute book too. In one or two cases we have had the courts, as in the case that you mentioned. If there is a disagreement there is more than one way it can play out, dispute resolution being one. I start from the spirit of trying to have as good a working relationship as I can, while understanding that sometimes devolution means a devolved body will go a different way. I am realistic enough to know that when it comes to election time, sometimes we are dealing with people who are political opponents.

Do you think that the current system for intergovernmental relations has sufficient transparency to allow the Committees of Parliament to scrutinise its discussions and decisions? And would you commit to sharing agendas ahead of meetings with this Committee, and accounts of what was discussed, so that we can inform our deliberations and scrutiny of the intergovernmental relations structures as well?

There is nothing secret about the structures.

I meant in the sense of what is being discussed at the meetings, and what the programme of deliberation is?

There is usually a communiqué about what was discussed, as at the British-Irish Council on Friday, for example, when a communiqué was released afterwards. As in the nature of these things, it probably does not tell you everything that is said, but you probably do not want to know that anyway. I do not see any secrets about it.

Do you see the communiqués as providing enough information to Committees like us to scrutinise the operation of the structures?

They will tell you what was discussed. We also had a press conference, which may or may not be related to the subject of the meeting, but that is up to the press because they can ask what they want.

The way of dealing with these things is rather different when we are dealing with the Republic than when we are dealing within the four nations of the UK.

Yes, of course, the Republic of Ireland is not on all the structures.

I do not think we have a communiqué when you sit down with Holyrood, do we?

I would have to check whether we issued a formal communiqué after the Council of the Nations and Regions, but I think the agenda was public. We talked about it and I do not think there was any secret about it.

There is a willingness there, anyway, to engage and ensure we have the right information?

Yes, very much so.

I am conscious of time, so John, Luke, and then Lauren wants a very quick question.

Three short questions then.

Short questions, and short answers.

On the reset of relations with Scotland, Sir Keir was in Scotland on the Sunday afternoon having been elected as Prime Minister with effect from the Friday morning. We have heard a lot over the last few years about things that Westminster is stopping Scotland doing, but of course what the Scottish Government do can have a material impact on our shared goals, for instance in energy policy. If there is a really sclerotic planning process in Scotland, that will hold back building offshore wind farms that reduce the cost of energy for consumers across our family of nations. So, on a ground level, how effectively is the reset operating to enable the UK Government to share their concerns with the Scottish Government when there are things we need to work together on, productively?

The speed of planning, to get these things built quicker, is probably a common challenge in all parts of the UK. The grid, and getting them connected, is also a common challenge. People in the industry will say, “I can build a wind farm in whatever, 18 months, but then getting the connection to the grid might take me a lot longer.” These are common challenges. I mentioned in some earlier questions on energy that the co-operation has been quite good. We do respect that while aspects of energy policy are reserved, something like planning is devolved, and the joint working on that has so far been quite good.

Moving on to the Council for the Nations and Regions: how will that interact with the existing structures?

That is a good question. You can have some subject-specific meetings underneath the Council for the Nations and Regions. I chaired the Inter-Ministerial Council last week, for example, which does not involve the First Ministers, apart from in the Northern Irish case where the First Minister and Deputy First Minister operate in a very joint team-like manner. It is with Deputy First Ministers and something more specific might be discussed. Last week we had a good discussion about resilience, which is a common challenge across all parts of the UK, so it works. As I say, if you were starting from a blank sheet of paper you might not have decided all these things, but I am respectful of them because they are the product of agreements. If you have structures that arose out of the Good Friday agreement, for example, I am going to keep them there, respect them and work with them.

With your indulgence, Chair, a final question from me. You have expressed some enthusiasm for devolution within England to metro mayors and the like. In Glasgow there is a real concern about the state of Glasgow, and whether it has enough support from central Government, and whether things are over-centralised in Scotland. In your experience, would metro mayors for cities like Aberdeen and Glasgow be a good idea?

It is for people in Scotland to decide, and it would be quite an exciting debate because these are great cities with great character, which I am very fond of. I grew up in Glasgow, a wonderful place, I love Glasgow, but I no longer live there so I do not have a direct say in it. It would not be for me to decide, but it has been a successful model where it has been tried, and it can give a city a really good strong voice. So that is a debate for people in Scotland to have— I don’t live there so I don’t have a direct say in it, it is up to them—but they are a good idea and I think it could be good.

You said that if you were drawing these structures and powers up from scratch, you might not draw them as they are today. But if you were moving deals and structures towards an ideal and a better state, do you have a plan for what devolution looks like as the endgame?

We do not have a plan to change devolved powers. When I was saying that, I was mentioning that there are quite a lot of structures for us to meet. But on devolved powers and so on, by design we have a very powerful Scottish Parliament, Scottish Government, and rightly so. Way back in the day—we talked about my longevity—I was involved in the creation of that policy, when I was younger and had a full head of hair, but that was a long time ago. The powers have developed to some extent since then, which is also true of Wales. I am very optimistic and hopeful about the Northern Ireland Executive being back up and running, Michelle O’Neill and Emma Little-Pengelly are doing a great job together. There is a lot of hope for Northern Ireland with the First Minister and Deputy First Minister in place, and I have really enjoyed working with them in the few months that I have been doing this. We talked about city mayors a minute ago, and the London Mayor has been a really good model; it is also true in Manchester and other places, so I am an enthusiast for it. I do not have a grand design to change powers, this has become part of the British architecture, the British constitution and part of the British political system. Fast-forwarding to today, it is now my job to work with certain parts of that to make sure we have a good working relationship, and that is what I want to do.

Thank you. The final, very brief question from Lauren.

Back in July you discussed having a review of the UK National Resilience Strategy, and obviously I am very conscious of the geopolitics situation at the moment, the threat of a major cyber-attack would potentially have a devastating effect on Whitehall. I was wondering what you can tell us about the progress of that review, including its publication date?

That is a really good question.

All our questions are ready good, Chancellor; we are a really good Committee.

Of course, a very good Committee. On cyber specifically, I made a speech to a NATO conference that took place in London a few weeks ago: the threat of this is very real, involving both state and non-state actors, although on that day I was talking probably more about state actors. The security services are very aware of this and are doing everything they can to protect us, and I am really grateful to them for the work that they do. But in terms of defence, if you like, this is an aspect of defence that is highly important now. We used to just think about it in terms of military hardware, which is still important but so are cyber defences. On resilience more broadly, and timetable, when I made the statement in the House in July, it was in response to Module 1 of the Covid Inquiry Report, when we said we would carry out a review of resilience. We are under an obligation to respond to Module 1 of that report by the middle of January 2025—next month—and I intend to meet that deadline.

Just around the cyber risk particularly, my background is in insurance regulations so I am obviously aware there is a great deal of expertise in that particular industry. Who are the stakeholders that you are engaging with specifically around the cyber risk aspects of that review and that strategy?

We do a lot: we talk to local resilience forums and industry. We have what we call critical national infrastructure, which are obvious things such as the power system, the utilities, the major financial institutions and so on, so we have a lot of stakeholders in this. We also have the National Cyber Security Centre, a public-facing part of this, that is there to work with institutions to help them increase the strength of their cyber defences. That it is a public resource that can be used, and I would encourage people in business and academia, and cultural organisations who saw what happened with the British Library and how damaging a cyber-attack can be, to use the National Cyber Security Centre to do what we can. This is not foolproof, it is a constant effort because there are people probing and there is ransomware, but it has to be part of our defence and resilience as a country.

Chancellor, Permanent Secretary, thank you both very much indeed. I am told it is not too early in the month to say every good wish for a very happy Christmas and prosperous New Year. You will obviously be writing the Cabinet Manual, Chancellor, over the Christmas turkey; I wish you well with that. I thank colleagues for taking part. Thank you for your time.