 Er hwyl yw hefyd yn fawr i'r cymdeithas, wrth gwrs, rwy'n wedi gynnig yn gystafol o'r cyfrithur arnaeth yn y ddiwrnod rhywbeth, ond mae'r cyfrithwyr rym ni wedi gynnig hefyd. Rym ni mewn llawer o'r Cyfrithwyr rym ni yn y KEG, mae'r Cyfrithwyr yn yn gilydd yn y gyfrithwyr yma, mae'n wrth gwrs mae'r cyfrithwyr ar y cyfrithwyr. Mae'n o英ynedr ar y Cyfrithwyr. I remember doing an exchange visit with some Japanese visitors when I had no Japanese, he had no English, so we were doing things through translators. My translator started to laugh when I was being introduced to my Japanese friend. I said, what are you laughing at? He said, he's just described you as an eternal typist. So I know my role in life. I'm noted for taking on hopeless causes, the football association job being one for all the Man United supporters in the room. I'm also an Arsenal fan who was in the away end at Old Trafford two weeks ago for the 82 humiliation. And I think being able to take on things that make you unpopular is a necessary part of the job that I now have. We, like every major government around the world, have huge, huge problems to deal with at home. We have financial crises, we have social crises, we have economic and enterprise crises, and it's a huge, huge job that the British government and indeed every other government around the world has to try and turn the situation around. We are trying to play an important part in that role through my team. I work simultaneously to the Prime Minister and Francis Mord, for those of you that know Francis. He's the Minister for the Cabinet Office in the UK government, but also through to the Chancellor of the Exchequer, George Osborne, and to Danny Alexander, who's the Chief Secretary to the Treasury. My job face is both sides of the centre of government, if you like, to the Prime Minister and the Chancellor. I would say that's a necessary part for success. You need to have your equivalent of Prime Ministers and Finance Ministry leads on board with everything you do, otherwise the system will divide and conquer. I think it's also important that you have political leadership in the sense that you need at least one politician who is passionate about the agenda and is prepared to stand shoulder to shoulder with you and all the other people that you work with to push through what are never to be difficult decisions. I have that with Francis Mord, who's a very interesting man, another time I could talk more about him, but he glorifies in doing what he regards as the unpopular, unsexy bits of politics, the things that save real money and change things behind the scenes, and he leaves the front facing stuff to his colleagues. I think that's a really important focal point. I don't believe we will be able to do the job that we've been asked to do without his leadership. We've got a lot going for us in that way from political leadership. One thing that I would urge people around Europe not to do is to enter into a climate of criticising and bashing the public servants that work in the organisations, whether they be central government or wider public sector bodies. In my experience virtually every public employee goes to work to do a fantastically important job that they care about, they work hard for, and they put up with a lot of staff because of what they care about. If you go over the top in terms of criticising them, as the British press does in my opinion with our public sector, it can really damage the climate in which you're trying to introduce change. I always make it a point in any public presentation to make the point I've just made, but mostly to thank and compliment everybody who's working in the public services around the world because I know they all do a great job. If there are systems and problems that they work within, it's very rarely due to them as individuals and I always make that point. If we're operating in a world of economic and public pressures with political support and hopefully without bashing the public servants in the press, what are we actually trying to do? I suppose it really boils down to three things. The nature of my organisation's title is efficiency and reform. The first word is the efficiency word. I'll come back to what I mean by that in a minute. The second is the reform word, making change sustainable and systemic. The third thing I always say is that credibility begins at home. If you don't actually make your own backyard work in a reformed way and in an efficient way, nobody will take you seriously. I make that point because actually when you start on one of these roles, you hoover up bits of government from wherever they might be and put them into one place. You actually have to put quite a lot of effort into bringing that team together, changing it, making it more effective and recruiting new leadership always and you don't normally have the luxury of very long to do that in. So, when I arrived a year ago, I think I had seven different bits of government brought together under one machinery of government move and I make no apology for it. None of the people that were directly reporting to me on day one are still there. I've changed the team completely and I have brought them together in a different way and we operate in a much more in one building in a flexible resourcing mode and it has changed the way that we operate and that is now being talked about by others and I think that's an important lesson for people who are trying to lead one of these exercises. If you're not good at yourselves, nobody will take you seriously. So, having put that out of the way, let me concentrate the rest on what we mean by efficiency, what we mean by reform. Now, I know there is a theological debate about what we mean by efficiency. To my minister, it means about spending less money each year. It's quite simple. He doesn't get into the sort of new security and the nuances of this. He says, I want to see folding money in my hand, you know, being returned from the system. We set a public spending review last October in the British government for four years that basically took the previous government's expenditure plans, which saw public expenditure of about £700 billion sterling at the start and the original plan was to increase it to about £780 billion and the British government basically said we are not going to increase that £700 billion figure. It's going to be a flat cash settlement for four years. So, everybody talks about it as though we are cutting the public sector by £80 billion. In fact, we're not growing it by £80 billion, we're keeping it constant. And I think that's the first important message. So, when we are then trying to say, well, how do we find efficiencies that add up to as much of that £80 billion as we can, we have to be realistic and say we're not going to find it all from just trying a bit harder and doing things a bit differently. There are going to be some tough choices and decisions to be made. One area that's inevitable is going to be welfare. I think in almost every government around the world welfare spending is a huge part. You can't save big chunks of money without tackling the welfare budgets. In the UK's case, they've got a number of reforms to welfare coming through which most people talk about as being linked to a programme called Universal Credit. So, that is a huge part of saving the £80 billion. But the rest has to come from real efficiencies and doing things differently. The way I like to think of it is, we probably want to get about £20 billion of that £80 billion out of central government. We want to probably get about £20 billion out of wider public sector and we probably want to get another £10 billion out of fraud, error and debt in the payment system and those are the sort of three big blocks of money we're going after. We've started on central government in the first year. We've taken the view that central government is key and in the first 10 months we've now had an audited figure published of having saved just shy of £4 billion sterling. I'll talk a little bit about where that comes from in a second, but it's £4 billion that hasn't come from closing hospitals and reducing teachers and schools and all those sorts of things. It's been from stuff that's largely invisible to the general public and it's shown the art of the possible. We're now setting on a journey to try and increase that to a £20 billion per annum figure by the end of the spending review. In the wider public sector, for which for us is places like health education, the police and local government, they've all got their own financial settlements but they in turn are having to find efficiency savings. They're all doing it in slightly different ways and already they are quite politically controversial. Our recent troubles in August from the two or three days of rioting re-invoked the debate about should we be cutting the police numbers at this time and all of that. It's very politically sensitive territory in the wider public sector. Fraud error and debt is something that just about everybody unifies around. It's just it's really hard to find it and to deal with it. But in every trade union discussion I have, in every political discussion or journalistic discussion, they go, if only you collected the tax that was due to you, if only you went after the debts that were paid with penalty fines and courts or whatever it is, that would actually take a lot of the pressure out of the system and so those are important areas. But if I stick just now to the £20 billion and talk about what are the sorts of things we're doing, obviously you have to look where does the money get spent, the money largely get spent in pay and procurement, we know that. We have to deal with those two issues but there are some totemic issues that you have to get right because people won't take you seriously and the two that we've picked upon are spend on consultancy and spend on marketing. We have savaged the budgets on both. In fact the reduction one year on another of consultancy spend is 70%, 70%. And on marketing it was just about 80%. So we've basically just stopped doing TV and radio advertising and stopped employing consultants to walk around the Whitehall and I speakers one so I can say these things. Because if you don't do that, nobody takes you seriously on the rest. It's necessary to do and we've done it and people have stopped talking about those issues now and now they're talking about the real substantial issues which are how do you change beyond that. If you're going to change the payroll bill of somewhere like Whitehall, you have to do it through reductions in the numbers of people working. We have about half a million civil servants in Britain out of six million public servants. We're already down to about 470,000 people and that's a year on and that number is falling all the time. There'll be a new figure out shortly. Don't know exactly how far that's going to go but some commentators have talked about 80,000, 90,000 off the peak total. It's already the lowest it's ever been since World War II but it's got a long way to go. If we're going to reduce the number of people in the system, you have to treat them fairly and well. We had some difficult issues to deal with about redundancies in early retirement programmes where the accrued rights were so expensive and people would argue favourable to the employee that nobody ever invoked them. So the government came in and put an act of parliament on the table to completely savage those rights and then set about negotiating a position with the union somewhere in the middle which it has now done and actually put those offers to larger numbers of civil servants who've accepted the packages and it's actually happening relatively painlessly and for many of the people that I speak to who've taken those packages, they are finding it personally liberating. If they're towards the older end of the spectrum, they're getting their pensions early and finding they can do new things with the younger people who've gone, they're finding they've got a lot of really good experience to take into the workplace with them. So it isn't the disaster scenario that people painted it in advance and most of the people who've left have left in good heart and good odor and it's working well. It also means you then have to concentrate on the people that are left who see a kind of tsunami slice of cuts being applied to them for every week, every month, every year. So what we've tried to do is to say let's get ahead as quickly as possible and make all the reductions in staff that we need to do in civil service quickly in the first 12 to 18 months so that for the rest of the spending cycle and the rest of the parliament, those staff know that they're part of the future and not worrying about their own jobs. It's analogous to the sort of retail organisation taking the jobs out of head office before it starts worrying about what it does in the stores. So a big part of payroll reduction is about getting fewer people. We've had pay freezes, we've had reductions in the compensation scheme but the one that's most controversial in the UK at the moment is the public sector pensions issue where there has been two major changes. To the long term nature of the pension scheme turning it from a peak final salary scheme into a career average scheme and the other is to ask employees to contribute more to their pensions along the way. Interestingly it's the second of those that's more controversial because it's immediate, it's understandable and people see that from next April their pay packet is going to reduce by x% as they increase the pensions contributions they have to make. The ethereal what their pension might be issue is a little bit harder for them to worry about but in either case the trade union movement have made a loss of capital with the public sector workers on pensions. We've already had one round of strikes just before the summer break. I'm fully predicting we'll get many more this autumn particularly as the weather turns. I think we're expecting big days of industrial action in November probably coordinated across all public sector workforces so it's probably the most controversial thing we're doing of all of the reforms around downsizing the people. On the procurement side I think what we've done is straightforward. We've taken a view that if government is buying things that you might classify as commodities, people quote a paperclips but I prefer to talk about things like energy and utility bills. These are things that we're aggregating at the centre of government doing once on behalf of all of the Whitehall system and we have a program now that is agreed with all of the Whitehall departments to increasingly move their commodity spending across 10 commodities to the central buying arm which in turn we're doing some very innovative and good deals with the supply market in order to get the savings. At the other end of the spectrum we're taking the bigger and more complex end of procurements and taking a different approach to how we negotiate with our suppliers. Many of our suppliers work for multiple government departments and they're brilliant at dividing and conquering and doing different things in different departments. We've taken a holistic view of how we deal with a company and pick British Telecom because they're the one company that everybody uses. We now have a single person facing BT on behalf of the British government and dealing with all of the issues that all of the Whitehall machine is having with those suppliers and we're finding that we're getting much better and stronger leverage deals with those suppliers. Interestingly the people that are doing that are not sitting in the centre in my team, they're actually the departmental commercial directors who we've said if you're the commercial director of the home office you're a strong commercial director in your own right we would like you to operate on behalf of the whole of government as well as on behalf of the home office. We've anointed them with crown level representation and they can deal with certain companies as the whole of government as well as for their department which is giving them personal job types of action. It's also getting them into the whole of government agenda and breaking down the traditional barony resistance to doing things in a coordinated way. So those are the big changes that we made there. The change to suppliers, we called them all in the top 20 suppliers, they had an annual budget of about 8 billion between them. We said we want 10% off the price now for no different service and no different contractual terms and we got it, first year 800 million savings just by a coordinated approach to negotiating with suppliers. We begin to bear fruit very quickly and you can get some real savings. Having sort of talked about the savings side and there's more we could go into, what are the reform areas? Because I know that if I took all those sort of approaches and just let them sort of go lax for a minute, behaviour would reverse and we'd be back to the same old stuff as we had when we went in. So what are we trying to do to change the way the system works at large? Well one thing we're doing is we're constituting new style boards of Whitehall departments with a very powerful set of non-executive directors going on from the private sector. This was coordinated by Lord Brown, John Brown, who used to, as you will remember, run BP and John is both the lead non-exec director of the Cabinet Office, my bit of government, but he's also the lead non-executive director across the whole of Whitehall and he has created a team of four non-exec directors to every Whitehall department drawn from the biggest bits of British business, British public service and British voluntary service. Those boards are absolutely crucial to getting systemic change in because otherwise I think the Whitehall machine will fragment when we relax on it. Secondly we're looking at civil service reform. This is an agenda that is a long term one and I think one of the things I find about the British civil service is it is already a very highly capable professional and experienced civil service. I was telling somebody this morning that one of the people who I met in the early 90s was a lady by the name of Ursula Brennan who was a bright young policy sort of star in the traditional Whitehall sense but took the view 20 years ago that her career would be unfulfilled if all she did was policy in the centre. She took herself off to go and do large IT projects and large operational management projects in the north of England as it happened and that's where I first met her. Fast forward 20 years she's now one of our permanent secretaries. She's running the MOD so the idea of a woman running the MOD is something that lots of people find interesting. I find that actually massively reassuring them for the first time I'm actually confident that the MOD now has highly capable professional leadership at the top because her background has prepared her to do such a job by taking herself off into policy, operational and corporate roles in the public sector. So we have some good examples of that. We're also fortunate that we have a diversity success in our British civil service. Half of the permanent secretaries are women and I think now a third of the next 40% of the whole of the senior civil service is now women as well. So we're building a pipeline of really strong female leadership in other diversity ways as well. So we've got a lot going for us already but there is a lot more that we need. I don't buy the argument that you just parachute a whole load of people in from the private sector and just watch it all come right. Many people from the private sector who've gone into the public sector struggle with the way it operates, with the complexity of it all and the fact that the thing doesn't operate as it always does say in a very command and control private sector. So it's a simplistic answer to do that but it is an important part to get a breadth of skills in and what we have found successful in the past is bringing people in perhaps on a sideways move from their job in the private sector letting them become familiar with the environment in the public sector and then they're ready to take on the next stage of leadership. I know I could not do any of the jobs I've done in the last two or three cycles if I hadn't done that myself by coming across in a sideways position from the private sector. I think it's a good model for how people, it takes time but you get better results from it so I think that's important and I'm learning from that. Going forward on civil service reform I think we're looking quite radically at lots of different ideas. One of which is looking at whether or not we can significantly co-locate chunks of the central Whitehall machine so that departments are actually sharing the same buildings that tends to break down barriers between civil servants. We have moved my bit of the cabinet office into the building that is known as the Treasury building for precisely that purpose and that already is enabling the centre of government to join forces in a way that perhaps it hadn't before. We're also looking at new IT tools to try to give people flexibility in working across civil service boundaries and you're probably like me familiar with the situation where you move department and suddenly a technology stops working and you come from usable technology in your private life to government technology which is riddled with security overlays so you can't actually achieve anything with it. It becomes a very frustrating way of collaborating with colleagues. We're trying to enable ways in which we can break the boundaries across departments down in that way. We're also looking at putting other areas out into the wider space so looking at whether more policy advice should be more contestable rather than solely the province of the public sector civil servant. Actually getting the civil service to manage a more plural set of policy advice from think tanks and the like. So lots of ideas going on but I wouldn't pretend we've set the direction out yet on that and probably the next three months we will and then it'll be easier to talk to you more firmly about what that programme is. So those are some of the sort of reforms we're doing at home. I think in the wider world probably the most interesting reform we're doing is for looking at whether the delivery of public services which has traditionally been either a state run body. Or a holy private sector body. Whether there is some hybrid model that might enable us to get the best of both worlds. And the model that the government has picked on is the so-called mutuals model where we're looking to take a piece of the public sector today and say if we put that in as a private entity and gave it a three way ownership structure part owned by the government. Part owned by some private sector partner which might be a venture capitalist or it might be somebody with a natural specific asset to bring to bear. And crucially part owned by the staff then do you create an entity that has the best of both public and private. It's what our government believes in very strongly. They look to well-known models in Britain to sort of use for examples of which the most famous is the John Lewis retail chain. And everybody knows that it's their favourite shop and it's growing and it's very successful and all that so therefore they think it must be a good thing. And so we're trying it out and we have some quite small scale examples in places like small bits of health and so on. But probably the biggest entity we're trying it with is the civil service pensions administration function which is currently done by 500 civil servants on behalf of the one and a half million members of current and previous civil servants for their own individual pensions. And we're looking at creating an entity which is roughly a third owned by the three entities playing different games on their ownership model. But when no one group has the dominant ownership model and where you give the entity an initial contract to get it going but then you treat it as just like any other supplier that you might have. So interesting new model. If it's successful it could be as radical as privatisation was in the 80s. If it's unsuccessful I won't ever mention it in any of my speeches in the future and pretend it never happened but it is something quite new and innovative. Then finally in reform. Reform is then the front line of the public services. This is not primarily where I would argue that me and my team are leading but we are trying to enable it. So for example there are big reforms going on to try to provide more public services digitally so that you don't have to, a bit like the airline industry has reimbursed itself around the web. A lot of public service moves to do the same. My team owns the government digital service which is both doing some of that and enabling some of that. We've just hired one of the Britain's best digital entrepreneurs to come and lead that which is fantastic. We're also helping in areas like the education reforms where the free schools, the particular reform that this government has chosen, freeing schools up from local authority and other control but still being publicly funded. Obviously that's primarily a role for the education department but we're supporting it in ways like finding, when new free schools want to come up, we're finding bits of the public sector property estate that they can inhabit which takes a lot of the lead time out of setting these schools up. We've just had an example of that happening in the city of Bristol so those sorts of areas we're supporting. We're also supporting the reforms like the universal credit program in welfare because as we all know these things are quite easy, they're quite hard to do at the policy level but by comparison they're a lot easier than to implement because the complexity of the technology and the change management of the organisations that deliver welfare are huge and that's an area where we are playing quite a critical role in helping the Department of Work and Pensions succeed. I could go on into the other reform areas, the justice area where there's a much greater use proposed of the voluntary sector in the rehabilitation of offenders. Again my team is responsible for the policies and the arrangements with big chunks of the voluntary sector and the so-called big society agenda and we've introduced new financing models like social impact bonds to enable to encourage and attract new finance to areas of traditional social and public service. So there's a huge amount going on on quite a broad waterfront. I come back to what I said at the beginning however, there's really three key messages. The efficiency measure about saving money and doing it and then establishing an environment in which it's sustainable is crucial. The reform agenda about ensuring that people feel that they're getting a better service for what they would regard as less money and also making sure that you change yourself so that you are credible with the right leadership and the right operating model at home. I leave just with the two sort of slogans that I try and push around the place. For many years government's been talking about more for less. The less now is so dramatic in our administrative budgets we're reducing by 30%. You cannot sit there credibly in front of staff and so we are reducing budgets by 30% and we want you to do even more than you did before. We change that to better for less. Now I know it's a word change but the important thing is you start to open up what does better mean. Better can often mean not doing it at all, vacating that space and allowing other people to fill that space. Better can mean a good enough service not a gold plated service etc. Sometimes better means radically reinventing it and just doing it in a fundamentally different way so we're putting the focus on the better rather than the more and that's the agenda. The final thing people say to me is well I understand all this but how can we save money when we have to invest up front to get the savings, the so called spend to save business case. My colleagues in the British Treasury would say they've seen an awful lot of spending over the years and not much savings so that sort of case gets very short drift. So we've kind of inverted it and said do what you do at home you save to spend. If you want to go on a nice holiday you save up during the year and then you go on holiday and that's the kind of mindset we're trying to get people in. So if your budget is reducing 10% year on year which most of them are, reduce it by 12% year on year and then reinvest the remaining two. That's what I've done in my own backyard and we've gone way below our cost curve initially to come back up again with new investments and new people and new technology and so on. And still live within our affordable budget line. So those are the two mantras we're preaching. It's better for us, it's safe to spend and if we do all of that then hopefully we will come through this dreadful economic cycle with a more sustainable set of public finances but importantly a better set of public services to go with it. So that's my message. I hope that's reasonably clear and across the board. There will be probably loads of detailed questions, some of which there will be massive similarities between particularly Britain and Ireland or other countries in Europe and some of them there will be very many differences. So can I throw it open now to questions and answers. Thank you very much.