Mr. Robert Watt:

The total workforce of the public service is now 325,000 people. The figure for the Civil Service is now 41,000. Those are overall numbers as opposed to full-time equivalents. There has been a significant increase after a period of retrenchment. We have increased the numbers once again. There are big issues around both incentivising excellent performance and implementing a tougher regime of exiting people who are not performing. I would not say it is a regret because when running any office or organisation, one cannot do anything one likes at any time. However, I regret that we were not able to have proper conversations about different types of contracts and placing more people on temporary or performance-rated contracts involving payments for delivery and penalties for non-achievement.

There is a bit of a misapprehension when it comes to comparing the public sector to the private sector on this. People in the private sector are on contracts. The arrangements depend on the level an employee is at, but if someone at a senior level does not perform, he or she is given 18 months' or two years' salary. The worker signs a confidentiality clause, nobody reveals the details and the employee does not talk about why he or she left. Nobody will ever know he or she was fired. Employees are not fired; they are just managed out, as the terminology has it. Those tools are available. Would it be better if they were available in the Civil Service or the public service? We have some of them. We can offer people early retirement. As managers, we would like to have the facility to have conversations with people when things are not working out and offer 12 months' or 18 months pay in a confidential arrangement. Can we do that in a public system with taxpayers' money? The Comptroller and Auditor General would want to see it recorded in the accounts. Public accounts show the amount awarded in severance payments and so forth. There is a controversy about that every year. We would like a more mature discussion about this. It would help everybody. It would certainly come at a cost but it would improve performance. If somebody makes a mistake in the private sector, there is a conversation. He or she is told that there will be another conversation if he or she do it again. If it happens a third time, the employee is managed out. It depends on the terms of the contract, which can be quite specific about the terms under which an employee will be managed out. Sometimes things go down the legal route, but they are mostly managed.

There could be a debate about having that type of approach in the Civil Service. In the UK, they have been doing this for several years. My UK equivalents have the capacity to have those conversations and do deals that are kept confidential. This has been very controversial in the equivalent committees in the UK. There has been a lot of pushback about that. It is worth debating. In effect, we make it very difficult for managers. We do all we can to reward people who do well. We have an awards event and we try to promote people who perform well through our system. A lot of our promotions are based on that. If someone delivers, we promote them. It can be very difficult to deal with people who do not perform. We have sanctions. We prevent people from going for promotions, we dock increments and eventually we move people out. We do not have the type of tools that are available elsewhere. I know that was a very long-winded response. I have tried to answer the Senator's question. It would certainly help to have a more sensible engagement. We also have to realise that everybody makes mistakes. The key is to learn from them. Clearly if someone makes two or three, it is over. He or she cannot stay in place any more. We must have that maturity. We would welcome conversations on that, but it is not easy.