3 June, 1926.]

-The Stationery Office, yes, but the Office of Works has its own Minister.

a

389. I know it has its own Minister, but has it a Finance Staff comparable in any way to the Finance Staff in the three Fighting Departments ?-It has separate organisation of Finance Staff, but probably not developed to the same extent as the larger Departments.

390. I always understood that the argument with regard to the Stationery Office and the Office of Works, which are both large spending Departments, not having the same strong independent financial staff that the three Fighting Departments have, was that they were directly under the Treasury. If they have not got that strong financial staff, then the Office of Works are not in the position they ought to be in so far as expenditure is concerned. I do not want to get on to a side issue.

Chairman.

391. No; but it is rather an important one. Perhaps you are not prepared to answer it to-day, Sir George? You might let us have that information ?Yes. You are asking me, firstly, a question of fact about which, I am afraid, I am not fully informed, as to whether there are Treasury representatives on two Committees of the Office of Works; secondly, you are asking whether the Office of Works is not in some special degree under the Treasury. That, I think, is by Statute right, that they have to conform themselves to Treasury directions.

Colonel Henderson.

392. But I should like to know whether, apart from being Statute right, it is, in fact, right? Perhaps I may give you some further information about that at a later time.

393. Will you let us also know what Treasury representative there is, if any, on these two Departmental Committees ? -Yes.

Chairman.

394. Can you tell us who undertake the contracts for all the Government Departments? There are two General Service Departments, the Office of Works and the Stationery Office. The Office of Works makes contracts for the provision

[Continued.

of buildings required for all Government purposes, except Docks and Barracks, etc., for the Fighting Services, and except some Prison Buildings, and certain buildings rented by the General Post Office; in addition, the Office of Works supplies cleaning materials, and fuel and light for the Public Service. The Stationery Office contracts for the supply of all types of office machinery, paper, printing, pens, etc., and it also is generally responsible for Government advertising contracts. Those are the two General Service Departments of the Government. Apart from them you may say generally that Departments do their own purchasing.

395. All Departments?-All Departments. Of course, not all Departments have to make contracts.

396. But all the larger Departments? -All the larger Departments do.

on

397. You mean they all possess individual Supply Departments?-They are more or less developed according to the Department. The principal Departments making contracts on a large scale are the Admiralty, War Office, the Air Ministry, the Post Office, the Office of Works, the Stationery Office, the State Management Districts, and the Ministry of Transport, for roads. The following make contracts The a comparatively minor scale : Home Office (Materials for Anthrax Disinfection-a kind of speciality); the Colonial Office (Land for Irish Soldiers and Sailors); the Board of Trade, for Sea Transport Service, they are responsible for Sea Transport; the Department of Overseas Trade, for Exhibitions; the Ministry of Agriculture, for Land Settlement; the Forestry Commission, for seeds, implements, etc.; the Board of Control, for uniforms and provisions; the Mint, for bullion and materials for manufacture; the Prisons Department, for clothing and uniform, and provisions.

Colonel Henderson.

398. Is not that under the Home Office? Yes, but they run as a separate show for their own administration.

399. Are they not under the financial control of the Home Office?-Do they account direct to the Treasury?—No; there is a separate Vote; they are not under the Home Office Vote.

400. I know; but do they account direct to the Treasury, or are they responsible to the Home Office?-They are under the general administration of

3 June, 1926.]

the Home Office, yes. There are a number of others of a small kind; each Department has a speciality; the Inland Revenue, for instance, makes its own contracts for currency notes and stamps, and so on.

Chairman.

401. Sir George, are you not of the opinion that economy might result if there were not so many Departments-if the work were more centralised? I am not referring so much now to the Fighting Departments, but to the other Departments?-There may be opportunities for some greater centralisation than exists at present, but I am not myself in favour of a Central Purchasing Department for all these Departments.

Mr. Ramsden.

402. Do not you think that perhaps certain things would be better bought in bulk? Take textiles: would it not be possible to have one Central Purchasing Department for the whole of the textiles used not only by the Fighting Forces, but by the other minor Departments?There is a certain amount of working together at present, arising under the Contracts Co-ordinating Committee of the Fighting Services, and also in regard. to the purchase of uniforms and clothing with some of the Civil Departments.

Sir Fredric Wise.

403. Is not the Post Office on that Committee as well?-The Post Office representative is not ex officio a member of the Committee, but when items of interest to the Post Office arise they are informed of the Agenda, and are what I may call visiting members of the Committee.

Mr. Ramsden.

404. Do not the Post Office, for instance, order very large quantities of woollen goods for the uniforms?--Yes.

405. And they place their contracts separately?-Yes, I believe they do. There is some correspondence going on at the present time as to whether it is possible to amalgamate rather more than there is at present the purchasing of uniforms by those Civil Departments who buy uniforms. As regards the others, the War Office, I think, buy the Marines' uniforms for the Admiralty, but the pur

56840

[Continued.

chase of cloth for Naval uniforms is a different specification of cloth, and is done separately under the Admiralty.

406. But would it not be an advantage if that were done by one Central Purchasing Board with its own organisation, the Board not only to buy, but also to inspect and deal with and store the different textile materials which are used? Where the requirements of any given Department form only a very frac tional part of the general available commercial stock, there is not much advantage to be gained by combined purchase.

407. Is not the Metropolitan Police Contract for uniform cloths a separate one? I have no doubt it is.

408. That is again another separate contract?-Yes.

Chairman.] What is your main objection to centralising more in. the purchasing of stores? I mean, from a business point of view, it seems to me that there can be no question that the larger the contract you can give out, the better the price you are likely to obtain it at. It is what is done practically in every big business. You have a purchasing department which supplies all the others. What is your objection to the idea of centralising more in Government Departments, apart from purely technical purchases, such as armament, which of course you could not centralise?

Mr. Ramden.] And a better distribuation over the year of the orders.

Chairman.] Yes.

Witness.] I do not say that there may not be an opening for more centralisation on such a matter of common supply as uniforms for prison warders or police, and so on. If you exclude those, I think you will find that the Departments that have the lists I have read to you really are all specialities of quite a minor amount of purchasing; you yourself excluded the specialities.

409. I excluded specialities, like aeroplanes, for instance, but not necessarily armament; all the armament is made practically by a few firms; and of course, in this Purchasing Department you would have experts, too; you would not eliminate the experts because you tried to centralise; you would have the same experts. The only point is that there would be some co-ordination in the form and method of giving out contracts, and in the form and method of buying, and B 3

3 June, 1926.]

when the purchases should be made; you would not eliminate the personnel.

Mr. Ramsden.] If you co-ordinated the small Departments you would get a better type of man; you would be able to employ an expert for each particular section.

Colonel Henderson.

410. There are three technical Coordinating Committees for the Fighting Departments: one for Foodstuffs; one for Mechanical Transport, and one for Textiles and Clothing; they were set up in 1923? Yes. There are five, I think, altogether.

411. There may be more. Are the Treasury represented on those Sub-committees ?-No.

412. Could you give me the other two besides Foodstuffs, Mechanical Transport and Textiles and Clothing?-These are Committees that work for standardisation of patterns.

413. Not only that. I have got their terms of reference here. "The standardisation, wherever practicable, of the specification and design of commodities," which deals with the point the Chairman was referring to, the change of pattern, and also

"The

adoption, wherever possible, of trade standards or patterns' and "The coordination of the methods and procedure of inspection." On a question of that kind the Office of Works provide all the uniforms for messengers, do they not, for the Government Departments? Are not all the uniforms provided through the Office of Works? I think they are?-I do not think you are right in that.

414. I was only going to point out that the Office of Works are not represented on the Textiles and Clothing Committee, are they? No, I do not think so; these are co-ordination of the Service Departments?

415. Yes; they are purely the three fighting departments. Neither the Treasury nor any other department are in any way represented upon them?That is so, I think, yes.

416. The co-ordination appears to go to a certain extent, and then for no particular reason to stop. For instance, all foodstuffs used for the Royal Air Force at home or abroad are obtained through the War Office; but the medical supplies for the Admiralty and the Air Ministry are obtained by themselves. There does

[Continued.

not appear to be any particular reason for that. The Admiralty draw frozen meat from War Office stocks for Mediterranean stations. There appear to be little odd systems of organisation, but no definite system of co-ordination. It seems to be done haphazard, according to my information?-I see what you mean. In point of fact, as a practical problem of administration, it must be dependent upon the difference of geographical distribution of a large number of forces. It is convenient for unification, say, in the Mediterranean; it might not be equally convenient at some place where the forces are not combined.

as

417. Yes; but my point is that if has the Treasury no representative on any of these Co-ordinating Committees and the other Purchasing Departments are there not represented, is really nobody anyhow ever reviewing the question to the possibility of closer co-ordination; it is apparently left to the happy chance as to whether the co-ordination proceeds or whether it does not.-The co-ordination of those Committees that you have named is a co-ordination of pattern and design and inspection largely. The object is to see that the Service Departments who use certain types of articles use, so far as possible, the same type, and, so far as possible, the commercial type of article, instead of having special designs of their That is not a matter, I think, in which the Treasury could really assist; it would merely take up the time of a Treasury Officer; he does not know, and he is not likely to have an opinion of much decisive value on the different patterns of goods required.

own.

418. But is not a great deal of money very often lost or spent owing to a particular Government Department deciding to change its patterns of different things? I think anybody who has served in any of the three Fighting Services could probably tell you that that is so. Are not these Sub-Committees also concerned with change of patterns if they are concerned with standardisation, and is not that a matter which does directly affect the Treasury?-I still do not feel that that is a matter in which the Treasury could usefully intervene.

Chairman.

419. So it comes to this, that the Treasury do not see their way, and I quite realise that the job would be too

3 June, 1926.]

big, to intervene in these matters; therefore, it is all the more necessary to make quite certain that the system adopted by these big spending Departments is satisfactory. Can you tell me what the total amount of Government purchases is -a rough figure?-I made an attempt the other day to find out. I think between 70 and 75 millions, as a very rough shot indeed, would be as near as you would get.

Sir Fredric Wise.

420. Would that include such things as Battleships or Cruisers?—Yes.

Chairman.

421. Of course, that is a very large sum; and the mere fact of these Coordinating Committees existing in one or two or three or four Departments proves the necessity of their working together. Surely the proper way for them to work together would be for all contracts to be placed by a special Contract Department, rather than to trust to these Co-ordinating Committees, which, as Colonel Henderson has rightly pointed out, appear to work in rather a haphazard manner, some Departments not being represented on them at all, although they may be buying the same materials as some of the others that are.-The question of a single Contract Department was gone into very fully by the Mond-Weir Committee in 1923, and the Report of that Committee, as I understand, is going to be republished and will be available at an early date. That will give more fully than I could do to-day the detailed argument on which the Government finally decided that they would not attempt to set up a single Contract Department. They had already decided against the idea of a Ministry of Supply. They then proceeded to set up a Committee to try to get rid, as they said, of the existing triplication, the three-fold Directorate of Contracts. The MondWeir Committee reported in effect that it was impracticable to unify the Contract Departments of the three Services into a single Service, but they recommended a greater measure of co-ordination. The Contracts co-ordinating Committee had already been set up; it was in existence during the war and it was decided to continue it in 1920, I think, when the Government decided that they would not go in for a Ministry of Supply. The Mond-Weir Committee

56840

[Continued.

pointed out that it was not for Contract Officers SO much as for Supply Officers to deal with the specification and design of the commodities used; and it was in consequence of their recommendation that the Co-ordinating Committees which Colonel Henderson has named were set up, to get the Service Departments, the Supply Officers, the people who call for various types of articles, together, with an outside business man, and let them work towards a common pattern wherever that was possible.

422. Is that Report out of print?-It has never been published as a public document, but it has been moved for, and if it had not been for the strike it would have been in your hands by now; it will be out in a few weeks' time.

423. You are opposed in principle to the centralisation of purchases, but do not you think that the present system of co-ordination could be improved upon?I have no doubt that improvements can be made. I mean I am not here to say that the thing is perfect at any rate; and certainly I should agree with you that, for instance, something might be done in the direction of civil uniforms. Take that as an example. I agree it is difficult to understand why civil uniforms could not be bought more satisfactorily by one Department for all the others.

Sir Fredric Wise.

424. Would you be in favour of food commodities being so bought?—I should doubt whether it was practicable in the case of food, Sir Fredric. I mean, if it comes to that, you have got your prisons, for instance, scattered at different points over England; you have got lunatic asylums in other places. Of course, most Civil Departments do not buy food; but I should think it would be a great difficulty to have a common food purchasing Department for those types of separately organised establishments. Mr.Ramsden.] What about fuel?

Captain Loder.

425. On the food question, would it be possible for arrangements to be made for a prison to draw food from a local barracks or something of that sort? Has that sort of arrangement ever been made? Not that I know of. Probably they work upon a different dietary and different standard articles, and so on.

B 4

3 June, 1926.]

Mr. Ramsden.

426. What about fuel: would not that be a type of supply which could be very much easier dealt with by one Purchasing Department.-Fuel again is a commodity the amount of the Government use of which is very small compared with the total commercial stock. The Office of Works does in fact buy for domestic use fuel for Government Departments. The Admiralty require quite a different fuel for steam raising and for industrial purposes, and I understand that the experience of the Contracts Co-ordinating Committee in regard to domestic fuel is that they could do better by each buying their own supplies than by having a common purchase of fuel supply.

Chairman.

427. Now you agree that there should be more co-ordination and you instance civil uniforms. You suggest that it might be more advisable for one Department to buy for the rest. Which Department would you suggest should do the buying in a case of that sort ?-The Post Office is the largest user, I think. I should suggest the Post Office.

428. That the Post Office should do all the purchasing, for instance, of civil uniforms?—Yes.

Colonel Henderson.

429. That would be for prison warders and Government messengers, and everybody of that sort ?-Yes. I cannot say that I have a final opinion upon it. I only say that, looking at this list, it is only in that sort of article that it seems to me possibly co-ordination or centralisation has not been carried as far as it need be.

Chairman.

430. It really is centralisation that you are now talking about, not co-ordination? -Yes.

431. You would not stop at civil uniforms; you would go on increasing the list, would you not?—If it were found convenient, certainly.

432. Therefore, you do agree to a certain extent with the principle of centralisation ?-Certainly. You see, it is in existence under the Office of Works and the Stationery Office. Where you have a commodity of general use throughout, it is clear for example that a single

[Continued.

Stationery Office is a much more convenient way of buying your paper and dealing with your printing than separate contracts by all Departments.

433. Is there any Departmental Treasury Committee considering this at the present moment?—No, not that I know of.

Captain Loder.

434. Is there any advantage in having two common Service Departments separate I mean the Stationery Office under the Treasury and the Office of Works always separate? Would there be anything to be gained in putting the Stationery Office into the Office of Works? -I cannot see that there would be anything to be gained by combining the Stationery Office and the Office of Works; they are dealing with quite different types of supply; the one, I suppose, is the largest building establishment in the country, and the other is the largest publishing establishment in the country, and one would not naturally combine them.

Sir Fredric Wise.

435. One question with regard to the Stationery Office. For argument's sake, supposing the Admiralty ordered paper through the Stationery Office, they put on 10 per cent. to the price, do they not? -No, not the Stationery Office. The Stationery Office's function is to supply paper for the Admiralty.

436. But they put so much on to the price ?-No. The Admiralty get free paper from the Stationery Office. The charge in respect of paper falls upon the Stationery Office Vote and not on the Admiralty Vote.

Colonel Henderson.

437. But it appears as a sub-head in the Admiralty Vote underneath the total? What is known technically as an "allied service," it is not paid for by the Admiralty at all.

Sir Fredric Wise.

438. My point is, not necessarily the Admiralty, but any Department who requires stationery; the Stationery Office supply them with either printing or stationery, but they put on 10 per cent. to the amount, so that they can show a profit. I think you are mistaken Sir