Tag: Greg Hands

Below is the text of the speech made by Greg Hands, the Chief Secretary to the Treasury, on 21 April 2016.

Good morning – it’s very good to be here today.

For those of you who don’t know me, I’m Greg Hands, Chief Secretary to the Treasury – you may know me as the minister who gives your departments a hard time during the spending process!

That is of course in the best traditions of the Treasury. And it’s particularly vital to meeting this government’s commitment to fixing the public finances.

A responsible government should only spend what it can afford. And it is the job of the Chief Secretary to make sure that happens.

As you will all be aware, the job has got a little harder recently. We have experienced a downturn in the economic forecast, largely due to factors outside of our control. That increases the need for government to keep the pressure up on public spending.

So what I will be doing is searching for £3.5 billion of savings from public spending in 2019-20, on top of the existing savings plans set out at Spending Review 2015, in line with continuing action to ensure maximum efficiency from every pound of public spending.

This is very much doable: the extra sum represents less than 0.5% of total government spending, or around 1% of departmental resource spending.

These savings are smaller than those we have delivered before. Over the last five years government expenditure was reduced to 40%, from the unsustainable level of 45% of GDP (Gross Domestic Product), in 2010. That involved a fall in departmental spending of 1.7% in real terms per annum, from 2010-11 to 2015-16. Looking towards 2019-20, the projected savings are only 0.9% per annum in real terms.

Perhaps even more importantly, at the same time as cutting the cost of government, we protected, and in many cases, improved core services:

Crime has fallen by more than a quarter since 2010; there are more young people going to study full time at university than ever before; and record numbers of children are now taught in schools that are “good” or “outstanding”.

So we have proven that we can do more with less.

The challenge is that the electorate likes to say “more please”. The demand is always there for government to do more. That is invariably going to be an ongoing pressure.

The situation is, therefore, that money remains tight, while expectations continue to increase. What this means for departments is that we all need to be even more alive to opportunities to become more efficient in everything we do.

This is where the efficiency work initiated by the Cabinet Office creates real value.

And there are some smart ways in which they have helped departments achieve further efficiencies:

Whether that’s developing and using common platforms and services, to drive economies of scale.

Rationalising our estates footprints, through property hubs, whereby departments share a smaller number of buildings in key locations…

Or increasing the skills of the civil service, both generally, and among specific professions and functions, such as digital, commercial and change management.

In addition, we are also merging the Major Projects Authority with Infrastructure UK, to strengthen the assurance and support afforded to departments and project teams, and you heard from Tony Meggs earlier.

We’re introducing single departmental plans, to ensure that departments have the right resources and can deploy them where they are most needed, and you will shortly hear from John Manzoni more on that.

We’re improving both our recruitment and training, to ensure that we have the right commercial and leadership skills in-house.

And we’re undertaking a review of the government’s strategy for IT contracts, an area where I still think significant savings could be realised.

So what can you, as non-executive directors, do to help drive efficiency forward?

I would recommend five things:

First, maintaining focus, within your departments, on the five cross-cutting priorities Sir Ian [Cheshire] has drawn up: talent, single departmental plans, arms’ length bodies, major projects and risk management.

Second, making sure that your boards have sight of data on efficiency measures in the department, and scrutinise departmental programmes through the lens of efficiency.

Third, ensuring that your departments have programmes that are in line with the work of the Cabinet Office’s efficiency unit: programmes to develop common platforms and services (where relevant); the rationalisation of estates,; and the upskilling of the workforce, particularly in relation to digital, commercial and leading and managing change.

Fourth, ensuring robust engagement with the delivery of your Single Departmental Plan, particularly the commitments to drive efficiency.

Fifth, making the most of your expertise, and getting involved in projects outside of your board – for example, taking a leadership role in departmental reviews on issues such as procurement, or advising specific programmes.

I think what underpins all five actions is the need, across the Civil Service, to get a better understanding of costs and outputs.

A lot of you will know about the transformation which took place in the prison service. They used their detailed understanding of the costs of running a prison, from meals, to staff, to building maintenance, to really drive down costs by holding service providers to account.

But there is a lot of other good work going on in the public sector, looking at costs and productivity.

In the Spending Review last year, we said we would establish a new Costing Unit to build a more forensic understanding of the cost of public services and drive productivity across the public sector’.

This is now up and running, and using cost data to improve efficiency across government.

The Costing Unit has done 11 projects so far, on a wide variety of topics such as the border, further education, criminal justice and mental health.

To give you an example of the sort of savings which are up for grabs, the Border Force looked at their costs and outputs to think about their productivity and how they could achieve the same service for less. By looking at costs, they identified £200 million of potential savings out of £900 million, for instance by increasing the number of passengers using e-gates.

That is the sort of saving which should be exciting all of us.

And, to conclude, that is where your role, as non-executive directors, can really add value: by asking the tricky questions, suggesting solutions which you’ve seen work well elsewhere, and – to borrow a phrase from the founder of FedEx, Fred W Smith – making sure that your departments are “keeping the main thing the main thing”.

Thank you for your work so far – and let’s keep up the pressure.

Below is the text of the speech made by Greg Hands, the Chief Secretary to the Treasury, at the London Stock Exchange on 29 February 2016.

Good morning – it’s great to be here with you at today’s market opening; thank you, Xavier Rolet for your invitation.

For those of you who don’t know me, I’m Greg Hands, Chief Secretary to the Treasury.

I myself used to work at the cutting edge of finance: designing models for financial derivatives, back in the early 1990s. Some of my former derivatives colleagues have now become fintech entrepreneurs themselves.

So, in me, you find someone absolutely convinced of the boost that technology can give to competitiveness.

My Ministerial role is largely to manage the UK’s £700-odd billion portfolio of public spending – because a significant part of this government’s long-term plan for securing Britain’s economy is about being sensible on public spending.

But that is merely one side of the coin; the other is, of course, going for growth.

I am a big believer that one of the best ways you secure long-term growth is by making yourself home to exciting, fast-growing industries.

Financial technology firms – Fintechs for short – are precisely one such industry.

I am delighted that this week, an independent EY report has ranked Britain first amongst the world’s seven leading Fintech hubs, from Silicon Valley to Hong Kong.

Our ambition is to maintain, and to consolidate, that position.

Because Fintech is good news; and the economic case for supporting UK Fintechs is nothing if not compelling.

Britain’s Fintech market generated over £6.5bn in revenue last year. Our Fintechs attract significant global investment, with around £550m in capital invested in 2015. Our Fintech industry employs over 60,000 people. Indeed – and this gives me some pleasure to say – more people work in UK Fintech than in US Fintech, or in Singapore, Hong Kong and Australia Fintech combined.

And aside from the positive economic effects, Fintech also promotes greater competition in financial services. That means better products, better services, a more efficient market – and, of course, it makes people’s lives easier too.

In the early days of eBay, you had to send people cheques in the post before they sent you the item you’d won. Now we have Paypal.

Ten years ago, the Guardian was saying that this new-fangled idea of music on a mobile phone would never catch on. Now every high street bank has mobile banking; Barclays has even developed Pingit to transfer money instantly.

While firms such as Funding Circle offer Britain’s businesses a smarter way to access alternative sources of finance.

What we have seen in recent years is a mixture of new market entrants, and established, more traditional companies, both developing Fintechs, and in many cases joining forces to do so.

I believe there are two ways in which the UK Fintech industry can continue to go from strength to strength.

The first is great regulation: that is, regulation which, while protecting the customer, helps new technology to start and grow and succeed.

The second is great collaboration: between Government, regulators, academia, investors, start-up firms, and established businesses.

There’s lots that the Government, working with partners such as the Financial Conduct Authority has done on the “great regulation” front.

The FCA’s Project Innovate Innovation Hub do excellent work in helping innovative businesses understand the regulatory framework and apply for authorisation.

The “regulatory sandbox” – a wonderful piece of jargon there – is helping innovative firms test new ideas at an early stage with real customers.

And our work on the creation of an open banking standard could revolutionise the way people manage their financial information.

“Great collaboration” is equally important. And the events which have taken place all over London this week – Fintech Week – have forged some excellent relationships.

I hope that today’s Fintech Investor Forum brings yet more people together, to throw around ideas, discuss new opportunities, and hopefully create some productive partnerships.

There is palpable excitement about what Fintech can achieve here in the UK.

Our ambition is simple: to consolidate our position as the global Fintech hub, and to keep ourselves at the cutting edge of financial innovation.

It’s win-win: for our businesses, for our consumers, and for our economy.

Below is the text of the speech made by Greg Hands, the Chief Secretary to the Treasury, in London on 25 February 2016.

Good morning – it’s great to be with you today.

I’m Greg Hands; Chief Secretary to the Treasury.

A bit about me: I was born in the States – my first political memory being Richard Nixon’s election – but my family moved back to the UK when I was very young.

After studying history at university, I worked in financial services, in London and New York; was elected Member of Parliament in 2005; became a Whip after the 2010 election; and last year the Prime Minister asked me to become Chief Secretary to the Treasury.

One of the big aspects of being Chief Secretary is the job of portfolio manager.

The sums are quite something. 4 trillion pounds of assets and liabilities; over 700 billion pounds of expenditure a year.

Some people I speak to in the City get quite jealous of those numbers.

But the big difference, of course, is that making those numbers larger isn’t an indicator of success!

The Chief Secretary to the Treasury has to rein in public spending, and make sure that taxpayers’ money is spent wisely.

The caricature of the Treasury is as the department always saying “no, we can’t afford this”.

That’s not entirely unjustified: we were elected by British voters to eliminate the deficit, and made it clear that this would largely be through fiscal consolidation.

We set a very clear path at last year’s Autumn Statement and Spending Review; but navigating it over the coming years has its challenges.

It’s certainly a significant part of my job description to make sure we stick to that path, and that involves being tough; or, being an “economist” in the 19th century definition of the word – i.e. someone who believes in making economies in public spending wherever possible.

This is compounded by the economic landscape we’re currently experiencing.

The Chinese slowdown, the fall in oil prices, continued instability in the Middle East – all are economic risks to a greater or lesser extent.

And because we are an open, trading economy, and rightly so, all these threats will have some sort of impact on us.

The best way to insulate ourselves from these threats is to get our own house in order.

So what I have been saying to the civil servants looking after public spending is: “Now is not the time to take our foot off the pedal”.

Our long-term economic recovery depends on us continuing to seek ways to be more efficient, more effective, smarter in the way we use our resources – and that’s one of the things I’ll be concentrating on over the coming years.

But there is another part of the narrative. Spending cuts – though necessary – by themselves won’t deliver the economic results we need for long-term economic security.

It is equally important that we pull out the stops for enabling growth.

So the sorts of conversations taking place in the Treasury aren’t simply “take this off the shopping list”.

They will be along the lines of: “How can we do this in the most cost-effective way? Could we be more innovative about how we fund it, or design it? Is there a cheaper way of achieving the same outcome?”

Because we know that in order to achieve optimum economic growth, government investment is vitally important. The trick is to do it wisely.

That is why in a large number of areas, we have maintained, and even increased, spending.

Some of these areas are services which improve our quality of life; the NHS, our life chances; schools, our national security, or our commitment to help the world’s poorest people.

And some of those are areas which can be real drivers of economic growth in the future – science, research, broadband, housing, regional growth, and infrastructure, to name a few.

We know that it is businesses – such as the ones you represent – who generate growth in this country. And our programme of spending is directly calibrated to make it easier for you to do that – wherever you are in the UK.

Because although the Northern Powerhouse is a highly exciting programme for regional rebalancing through growth, the Chancellor is in the same place as I am: you don’t make the weak stronger by making the strong weaker.

This is the greatest city in the world, and we’ll keep it that way.

So what are our plans for helping London go from strength to strength? Four things:

Transport is one of the things my constituents are the most exercised about – rightly so. Inadequate transport is bad for productivity and bad for quality of life.

At the Spending Review last year, we committed to £11 billion support for London.

This funding will enable TfL to invest in the network in projects including Crossrail, due for completion in 2018; major underground upgrades, including new trains and increased capacity; 1,700 hybrid-electric buses this year; and new cycle superhighways to open by the end of this year.

Aside from this, we’ll see HS2 construction beginning next year, with the line from London to Birmingham to be completed in 2027, and extended to Leeds and Manchester by 2033.

As HS2 is built, places connected to it – for instance, Old Oak Common – will also receive funding for redevelopment.

And we’ve also pledged £55 million to extend the London Overground to Barking Riverside.

And of course, one of the most important investments we can make is in our people: making sure that we have world-class skills is at the heart of our long-term plan.

That’s why we have protected funding for the core adult skills participation budgets in cash terms, at £1.5 billion.

This will help around 1.7 million learners each year to develop the skills that employers need.

It is also why we are giving local areas more say in setting up skills systems that are responsive to local economic priorities.

We will vastly expand further education loans, to help those seeking to move their skills to a new level; and we will also consult on introducing maintenance loans for people who attend specialist, higher-level providers.

We’re funding five National Colleges and a new network of Institutes of Technology. Given London’s particular strengths in the digital sector, I’m delighted that the National College for Digital Skills – opening this September – will be based in Tottenham.

And there is our apprenticeship system – which is at the heart of our commitment to a world class skills system.

By 2020, spending will be double the level of spending in 2010-11 in cash terms.

We’re also putting control of funding in the hands of the employers through the apprenticeship levy, so that the system delivers the skills they want and need.

We’re committed to creating 3 million new apprenticeships by 2020, and I am delighted that employers across the capital are playing a key part in this, including in the design and development of new degree apprenticeships.

It is also vital that our world-class workforce has good places to live.

Being MP for an area where house prices set new records practically every month, I’m acutely aware of the pressures – particularly when it involves getting onto the property ladder.

Essentially, we need to build more.

Our manifesto committed to delivering 200,000 Starter Homes – homes for sale at a 20% discount, available to younger first time buyers, who plan to live in them.

In the Spending Review, we announced £2.3 billion to help deliver up to 60,000 of these.

We also committed to developing 135,000 Help to Buy: Shared Ownership homes in London, which will allow more people to buy a share in their home and buy more shares over time, as they can afford to.

The scheme will be open to all households earning less than £90,000 in London, and will relax and remove previous restrictions, such as local authorities’ rights to set additional eligibility criteria.

And our London Help to Buy scheme launched last month. The scheme will offer buyers with a 5% deposit on a loan of up to up to 40% of the value of a new build home, interest-free for 5 years.

Finally, we’re supporting specific developments. The Barking Riverside extension, which I mentioned, a few moments ago, will provide 10,000 new homes.

And the £97 million we’re providing to support redevelopment at Brent Cross will support 7,500 homes.

The fourth plank of our strategy for keeping London world-class is to help develop our financial services sector.

That means opening ourselves up to new and emerging markets – particularly in Asia and the Middle East, which still provide enviable levels of growth.

It means priding ourselves on exceptional standards of regulation, conduct – and therefore trust.

It means harnessing new technology, and fostering competition in the market.

And it means maintaining excellence, not merely in financial markets, but in all the range of associated professional services that come with the territory.

The hard work we’ve put in since 2010 has meant that London now enjoys the accolade of the world’s most dynamic financial centre, according to the Global Financial Centres Index.

Maintaining this competitiveness while keeping the highest standards of conduct is a major area of Treasury focus, and one on which my Ministerial colleague Harriett Baldwin is working tirelessly.

Underpinning all this activity is our core belief that the best way to ensure Britain’s continued prosperity is a thriving private sector, one that adds value and creates jobs and growth.

It’s fair to say that many of the old consensuses about the economy have disappeared.

Those of us who believe in things like the free market, and private-sector driven growth, and the benefits of wealth creation, need to continue making that case.

The very best thing we can do is to prove the naysayers wrong, through our actions as well as through our arguments.

Time and again throughout history, a dynamic, innovative private sector has proven the biggest spur to increasing our standard of living.

I look forward to working with you so that this continues over the coming years.

Below is the text of the speech made by Greg Hands, the Chief Secretary to the Treasury, in Birmingham on 28 January 2016.

Good morning, and thank you for inviting me here to Birmingham today.

I feel I am returning home to some extent – because half my family is from Birmingham.

My parents met here, and my father grew up here, one of 18 children in a terraced house in Handsworth.

He attended Handsworth Grammar School, was brilliant at mathematics – I suppose with 17 siblings you get very good at long division – and went on to study at Birmingham University.

He was a great example of what we politicians call “aspiration” – that drive which spurs people on to achieve.

I will speak about my own aspiration shortly!

It’s great to see so many people here – but then again, HMG Finance is quite a major operation…

It employs 14,500 staff across 39 departments, manages 4000 billion pounds’ worth of assets and liabilities, and is responsible for over 700 billion pounds’ worth of expenditure a year.

There are, by the way, many people in the City of London who would like to manage a £742 billion portfolio.

The difference is, of course, that my indicator of success is not how big I can make that number!

The point about these numbers isn’t just their size: it’s also that they have a direct impact on the lives of every single person in this country, as well as quite a few beyond.

However, I never like thinking of it as government money. It is public money.

That distinction is important, because it’s the public who pay the taxes we allocate; and it is ultimately the public to whom we are accountable.

Spending that money wisely is one of the most important aspects of public service. I would argue that that should be the case at any time.

But when the country is on a path of economic recovery, it is particularly crucial.

So my first message today is this: thank you for the hard work you have put in, over the last few years, to make sure we get the best possible bang for our buck.

Getting the public finances in order has been one of our biggest areas of focus since 2010, to reduce the deficit – indeed, to eliminate it altogether.

We’re here now to finish the job. And that’s precisely what we are doing.

At the same time, we have also been asked to cut taxes; to protect and indeed increase spending in several major areas; and to deliver better public services.

This builds on the important changes made since 2010 to the way the country is run – with the aim of creating a modern, reformed state.

Whether that’s reforming the criminal justice system; making tax digital; introducing fresh safeguards to UK borders; or recalibrating the way we finance our infrastructure projects – plenty of big decisions have been taken, and HMG Finance has been at the heart of them.

So, even at a time of deficit reduction, we also have to continue the important reforms we started five and a half years ago.

In other words, we have our work cut out.

To make the job even more of a challenge, in recent months we’ve seen the economic storm clouds once again begin to gather on the horizon: whether it’s the China slowdown, the tumble in oil prices, or the turbulence in various markets.

Our economy is inextricably linked to other economies across the world – as one would expect from a country whose products and services are sought after worldwide.

Unfortunately, that means that when other markets slow down, that has an impact on us.

The best possible antidote to all those external economic risks is making sure that our economy is healthy enough to withstand them.

As the Chancellor said earlier this month in Cardiff, though we’ve made a great deal of progress, on the deficit as well as on the wider economic picture; it’s still “mission critical” rather than “mission accomplished”.

So we cannot let 2016 be the year where the foot is taken off the pedal.

Our long-term economic recovery depends on us continuing to seek ways to be more efficient, more effective, smarter in the way we use our resources.

That is my aspiration!

Agreeing settlements with my Cabinet colleagues was one of the major tasks of last year.

The task now is to ensure that those settlements are delivered – even though we will of course have to maintain the flexibility to deal with unforeseen issues that will inevitably arise.

What that means in practice is that the work you all do, as finance experts, will only become more and more important.

That’s why I regard it as essential that the Civil Service – right across the departments – has the best possible financial capacity and expertise.

The 2013 Review of Financial Management gave us a set of recommendations to improve our finance function.

In response, we developed the Financial Management Reform programme – a programme that’s now recognised as the model for delivering change around Whitehall.

The programme is committed to ensuring five things in particular.

First, creating a pipeline of talent, one that extends to senior roles.

Second, developing the skills of everyone working in Finance.

Third, sharing expertise and developing more standardised processes across departments.

Fourth, enhanced use of data and management information across Government.

And fifth, introducing new projects on specific areas of Government spend, so we can develop a more detailed understanding of the spending issues involved.

Already, you, as our Government Finance Function, have made great strides in putting finance at the heart of decision-making in Government.

And there’s been impressive progress on all fronts.

We have a Finance Fast Stream, for the first time ever, alongside two intakes of Finance Fast Track Apprentices.

There are now established talent forums, and recruitment campaigns, higher up the career ladder.

And there’s the launch of a Finance Academy in the pipeline – something which will really serve to improve our capabilities in this area.

We have 10 costing projects completed. Working across government, these have allowed us to implement savings of £100 million for infrastructure policing, or – another example – announce £600 million extra for mental health services.

I can tell you that the work done in this area was extremely helpful in my cross-Departmental negotiations last autumn!

And within the Treasury, we now have a Costing Centre of Excellence. Down the line, this will make government much better at forecasting what specific projects will cost – which is invaluable for agreeing budgets.

We have a strategy in place for improving the data from which we make decisions – not least through “data sprints”, which are 6-week projects to provide immediate insight into particular issues.

Not least, we’re in the process of agreeing a Finance Operating Model for government. This will enable us to share expertise, and make the finance profession much more effective.

The future is going to see much more of the same – and to that end, in last year’s Spending Review, we committed to resource our Financial Management Reform programme, setting up standing teams to drive forward our work.

I wouldn’t call this the sexy part of running a country, necessarily! And I certainly don’t expect to see, for instance, data sprints on the front pages of national newspapers…

But without getting the finances right, it’s extremely unlikely that in the future, we will be able to meet this country’s aspirations for the public services it receives.

People demand more from government. They demand better.

They demand services more quickly, and for longer.

They want those services to be more accessible. And of course they also have to be affordable.

Through your work, we can make that happen.

The last thing I want to do today is to talk for too long.

Nobody ever leaves an event saying “I wish the Minister had spoken for longer”! And I know that on these kinds of occasions you will be very keen to ask me questions.

But before I’ll take those questions, I’ll leave you with two quotes, which I hope will provide food for thought for the rest of this conference.

The first is from the founder of FedEx, Fred Smith. As well as founder, he is also Chairman, President and CEO. I guess he likes to leave no doubt about who’s in charge…

An interviewer asked him to what he owed his success. His answer, after a brief pause, was:

“The main thing is to keep the main thing the main thing”.

Our “main thing” is the public finances. I know that, and you know that!

But it’s in all of our job descriptions to persuade our other colleagues of it, too.

The second quote is a little less recent.

In fact, it comes from the earliest ever guide to running the British economy, printed as far back as 1178.

It says: “The highest skill at the Exchequer does not lie in calculations, but in judgements on all kinds”.

I find that invaluable advice.

Because it places the emphasis, when you’re making decisions, on realising it’s never a matter of black or white.

There are trade-offs and nuances to consider, and the best submissions and briefings I see invariably take those into account.

Thank you, once again, for the hard work you have put in over the past years.

Have a great conference. And I’m looking forward to working with you over the next few years, as we secure the foundations of our long-term economic recovery.