Examination of witnesses
(Questions 300 - 319)
WEDNESDAY 29 JULY 1998
DAME ANN
BOWTELL, DCB
and MR STUART
LORD
300. But would it pay special attention
to the two-way flow of information? I just want to highlight a
particular issue which is that I made an enquiry about RATs in
Birmingham, or remote access terminals, and I was assured that
we did have RATs in Birmingham, but what struck me as absolutely
bizarre was that we have a system whereby the Benefits Agency
would tell the Housing Department when someone was on income support
when they claimed housing benefit, but the system did not work
the other way around when they came off income support that they
would tell the Housing Department because the official answer
I got was that this was the individual claimant's duty to do so,
which seemed a bit optimistic to me, so are you paying attention
if we tell an agency that someone is on benefit that we will also
tell them when they come off it?
(Dame Ann Bowtell) I may have to give you something
on this, but I think the Benefits Agency are running some pilot
studies to develop RATs in a rather more—basically the basic
RATs stuff, all you can do is look things up and see what is going
on, and I think there is something with a more positive exchange
of information going on, but it is probably better if I give you
a note on that,[2]
but your point is well taken. I am sure we ought to be doing that.
Chairman
301. Can we move on to PRIME and maybe you
can tell us briefly how the project is going and the timetable.
(Dame Ann Bowtell) Well, the transfer of our estate
to the contractor happened in April, so since April our estate
has been with the contractor who is now called Trillium and not
only are they providing buildings to us, but they are also providing
a range of services connected with buildings, so they are also
providing the maintenance and the security guards and things like
that. So in terms of their actually doing anything with the buildings,
we are in fairly early days, but what they are contracted to do
is to bring all our accommodation up to statutory requirements
within two years, and then we have agreed a long-term programme
with them of maintenance and upgrading of the accommodation we
are staying in, and of course they will begin the business of
disposing of some of the surplus accommodation which is part of
the deal, so it is very early days to see how the building business
is working. In terms of the services, they are all in there and
there have been the inevitable teething troubles in some local
areas because of course this is a service right around the country
to all of our offices. So basically the thing seems to me to be
working okay and we have got arrangements in there so that there
are penalties on them if they do not deliver the services to the
agreed standard and there is a detailed specification agreed with
them. I have got a contract management group who are managing
the relationship with them, so it seems okay so far.
Mr Wicks
302. When they dispose of property, where
do the resources or where does the money go?
(Dame Ann Bowtell) There is an arrangement for
sharing the development gain. I am not quite sure to which properties
that applies, but there certainly is an arrangement for some of
the properties.
303. I am wondering about the origin of
the name "Trillion", you see!
(Dame Ann Bowtell) It is with an "m"
at the end.
304. But some of the money might come to
the taxpayers who own it?
(Dame Ann Bowtell) Yes, and indeed they paid £250
million up-front to start with and we are saving quite a lot.
305. They paid £250 million?
(Dame Ann Bowtell) Yes.
306. It would be fascinating to see how
much they make from the property disposal.
(Dame Ann Bowtell) Well, the property that they
got which is surplus which is about, I think, 9 per cent of the
estate is in little bits. It is property we could not get rid
of basically, so the stuff which is actually empty is probably
no big deal.
Chairman
307. Have there been any difficulties about
the rationalisation of the sites? You have obviously had to close
some sites, but has that inconvenienced some of your customers
to any noticeable effect?
(Dame Ann Bowtell) Well, before we close any site,
we go over the position with ministers very carefully and what
the alternative arrangements are and so on, so we will try not
to close places without putting some alternative facilities in
place. Inevitably if people have not got the familiar place they
were going to, it is always going to be awkward for some people,
but where an office ceases to be economic from our point of view,
we always try to put some alternative arrangements in place for
people to be able to go for example into the local authority instead.
308. Have you got a mechanism available
to you to consult customers on an issue like that? If you have
got an option of which benefit office you would prefer to close,
is there a mechanism available to you to test that question?
(Dame Ann Bowtell) We would always expect the
local management to be consulting with people locally, so we would
certainly expect them to be talking to the local Citizens' Advice
Bureau, the local authority and people like that and that is part
of the arrangement for closure.
309. And presumably you do consult Members
of Parliament as a matter of course?
(Dame Ann Bowtell) I think so. I am sure.
310. That sounds as if, apart from the usual
normal glitches that you would expect, the project is running
to expectations.
(Dame Ann Bowtell) Yes, so far.
Chairman: Can we now
turn to staffing levels because there were some reductions, I
think, announced recently.
Mr Leigh
311. There was a question from Ian Bruce
to Mr Field on the 13th July saying that between the general election
and the 31st March, the Benefits Agency saw a reduction of 4,289
permanent posts from 71,642 to 67,352, including, I presume, Mr
Field's post, but I do not know. Could you just tell us a bit
more about the reduction in staff in the Benefits Agency? Which
part of the Agency has seen a major loss of these posts, have
any redundancies been compulsory and how have the redundancies
been achieved?
(Dame Ann Bowtell) We had quite a big squeeze
on our administration costs over the last three years and these
reductions are a part of that, so we had less money to run the
organisation with, and some of these reductions have come about
because the Benefits Agency has made some quite substantial changes
in the way in which it has actually managed the organisation.
It has done quite a lot of centralisation of functions and there
have been some mergers of districts, so they have done a lot of
work across the way in which the organisation is managed and that
is where quite a lot of these posts have come out from because
they have actually been managed in a different kind of way. They
were all voluntary redundancies and at some grade levels it was
quite considerably over-subscribed, so we had to do some choosing
among people who wanted to go and we have done that choosing on
the basis of the needs of the business and the value for money.
312. Has there been any impact on services
to the public as a result of these voluntary redundancies?
(Dame Ann Bowtell) Not that we can detect in terms
of changes in performance because they were mostly done in the
way in which we actually organised the management of the offices
and we have not been able to detect that there has been any difference
in the front-line performance.
313. Have any areas of the Benefits Agency
been ring-fenced so that they do not have redundancies or has
the whole Agency been involved in this process?
(Dame Ann Bowtell) These would have been widespread
across the Agency and indeed the squeeze on the Agency was such
that it had to examine every part of it, so it would have been
spread across all areas of the country. There may be some individual
units which are doing specialist functions, but broadly I do not
think there were any off limits when the Benefits Agency began
to look at how it would deal with the situation.
314. Apart from saving money, are there
any benefits accruing to the work of the Department in having
further redundancies or not?
(Dame Ann Bowtell) I think that what the Benefits
Agency has done is probably produce a more tightly managed organisation
and I suppose, because these posts were coming out at the slightly
more senior levels, one of the things it will do eventually is
provide some room for staff who have not had many promotions for
quite a long time, for us to be able to bring them through. I
have been quite worried in the Benefits Agency because they have
had very little promotion for a long time and you have had people
soldiering on and you have had no outlet, so when this settles
down eventually, this will leave room for some of the younger
people to come through and that must be good.
315. Is there any reason for the slight
increase in the staff in the Contributions Agency in a similar
period?
(Dame Ann Bowtell) I think that was a spend-to-save
in that they actually got some extra money in order to do some
exercises to produce more investigations at the forefront, so
it was quite a specific extra chunk of staff in order to save
money.
316. Although there have been these reductions,
a staffing level of 67,000 must make this one of the largest employers
in Europe. I think to the layman it must seem a staggering number
of people.
(Dame Ann Bowtell) It is a doing a staggeringly
big job.
317. Well, I know that.
(Dame Ann Bowtell) When you look at the 20 million
customers of benefits and the Agency is paying not the whole £100
billion, but a fair chunk of it, this is a very big and very complex
job. These are staff who are spread all over the country doing
this job. I think the Inland Revenue is not far short of that
if you look at other organisations—I think the Inland Revenue
have got 50,000 odd staff. I think our staff do a very good job
in very difficult circumstances.
318. There is obviously then no magic formula
and we cannot look to the coming years for some significant reduction,
although there may be further reductions, or perhaps you can explain
to us what might happen in the next year or two or a longer period.
(Dame Ann Bowtell) Well, any manager has a constant
search for ways of running the business more efficiently and we
shall continue to do that and the new IT may make lots of things
easier to do when it comes on-stream. But, on the other hand,
as the Chairman was saying, we also have another thrust which
is towards a more active service, a service which will get staff
more involved in case-working and in dealing much more face to
face with clients and that is liable to be a staff-intensive activity,
and it is the intention to develop the service in that way. That
is not going to save staff. Things which deal with people face
to face are very staff-intensive. JSA, for instance, has really
high administrative costs compared to other benefits because it
involves staff talking to people and spending time with them.
319. What incentives are there on senior
management to reduce staff whilst retaining efficiency?
(Dame Ann Bowtell) The big incentive is in the
money that we get for our administration costs. That is always
a big squeeze on the public sector and that is why you have such
tough disciplines from the Treasury, because we do not have the
same disciplines at the other end that the private sector gets
of the bottom line, as it were. There is also the attitude that
the whole management of the organisation takes towards that. It
is a question of what you reward in your managers and what your
managers expect to do in order to fulfil their objectives, so
to set the organisation in the direction in which it is improving
efficiency is important and we will continue to do that and I
am sure the Treasury will continue to squeeze our administration
costs.
2 See Ev pp. 90-91. Back
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