Examination of witness (Questions 323
- 339)
WEDNESDAY 21 JUNE 2000
RT HON
JOYCE QUIN,
MP
Chairman
323. Minister, welcome. You will be happy to
know that tomorrow morning your words will be on the Internet.
That is a privilege that Ministers receive and no doubt the world
will hang on to your every word. Looking at MAFF's departmental
report for the year 2000, on page 9 I see that there is a photograph
of yourself, Baroness Hayman and Elliot Morley. In that report
there is a paragraph headed, "Regional Service Centres".
It says: "There are nine MAFF Regional Service Centres, each
headed by a Regional Director, which act as the Department's front
line representation in their region with the task of explaining
MAFF's policy and feeding back regional perspectives on policy
issues to MAFF Headquarters. The development of the Government's
regional policy and Modernising Government initiatives mean that
this role is of growing importance, involving close liaison with
the Government Offices for the Regions (GOs), the Regional Development
Agencies (RDAs) and other regional partners". That statement
does not stack up very easily with what the PricewaterhouseCoopers'
report suggested you are about to do to them.
(Ms Quin) No, I do not accept that at all. The modernisation
of MAFF services can go hand-in-hand with a strengthening of MAFF's
commitment to regional development. Certainly Ministers in the
department are very keen that MAFF's work overall becomes more
integrated with the work of the Government Offices for the Regions
and that it also feeds into the work of Regional Development Agencies.
That is one of the very worth while parts of the work that we
are currently engaged in, trying to ensure that in the regions
MAFF is very much part and parcel of an overall regional focus,
so that when we look at the potential for regional economic development,
the farming and rural issues are very much integrated into overall
regional thinking. That is why we are keen to see rural and farming
presences on Regional Development Agency boards and that is why
we are keen to build up the linkages between MAFF and other departments
in the Government Office. Indeed what is being envisaged in terms
of trying to ensure that there is an agricultural and rural policy
focus in those Government Offices for the Regions is tremendously
worth while.
324. On 23 May, Nick Brown said, "I have
not yet submitted a proposal within Government" on reform
of CAP administration. The MAFF Business Plan published on 6 June
states: "We are seeking funding in this year's review of
Government spending to implement [the PricewaterhouseCoopers']
recommendations and to establish an innovative IT project".
Does that mean that a decision has been taken in principle to
proceed with these changes and that the only uncertain factor
is whether the Treasury will fund it?
(Ms Quin) Nick Brown has said that he is very much
in favour of the principles which underline the PwC report. However,
he has to be satisfied in examining the draft Business Case that
that is something that will deliver what it aims to do and that
it will be fundable; in other words, fundable by the CSR round.
We do not want to embark on something that will not work out in
terms of being fully funded and, therefore, will be implemented
only in a half-baked way. That would almost be worse than embarking
on that route at all.
325. With respect, treasuries do not fund principles.
We all know that. We have been there and got the T-shirt. Treasuries
fund schemes. The statement that, "We are seeking funding
. . . to implement the recommendations", suggests that the
decision has been taken in principle. Much of Ms Brown's evidence
was about the project which was quite clearly formulated. How
much of this is still open for negotiation. How much is actually
getting to a point of trying to nail matters down in fairly concrete
terms?
(Ms Quin) I think we are near to finalising the Business
Case, but the Business Case is in draft form, as Jane Brown explained.
The Minister who is considering this is looking at a number of
different options of how to take the matter forward. It is not
absolutely cut and dried in a final form, but it is close to being
finalised. Then we shall be in a position to consult with the
trade unions. Nick Brown has said that once the draft Business
Case is finalised he will release that to the staff to look at
and they will see the basis on which we are making a bid to the
Treasury for funding. Perhaps I could say—I do not believe
that this point has been made sufficiently at this stage—that
the PricewaterhouseCoopers' report talked in terms of a pretty
rapid transition from an old to a new system. I should say to
the Committee that I am pretty sure that Ministers are envisaging
that a transition will take place during the period of the Comprehensive
Spending Review round. That is a three-year period. Therefore,
some of the worries about some kind of dramatic, almost overnight
big bang are not justified. We want to ensure that once the Business
Case is finalised and funding has been agreed, if it is agreed,
that we can have a transition period that works over the whole
period of the CSR until 2004.
326. I understand that. You use the expression
the "basis for the bid". Have you not bid already? The
fundamental expenditure review negotiations are under way. It
is sort of high noon at the moment.
(Ms Quin) There have been discussions, but a final
figure rests on some of the choices that need to be made in finalising
the Business Case.
327. The Business Plan states, "We are
seeking funding", but there has not yet been a specific bid
put into the Treasury in respect of the reorganisation, is that
true?
(Ms Quin) Not on the basis of the final Business Case.
Obviously, there have been discussions. What we are about links
into a wider Modernising Government agenda with which you are
familiar. The Treasury too has been interested in working with
all departments in terms of trying to secure benefits from IT
and also in embarking down what is ultimately hoped to be a "spend
to save" route.
328. If the Treasury did not come up with the
money—we know how hard-pressed MAFF is, departmentally and
in funding terms—would that mean that the scheme simply
would not go ahead, or is there a plan B, as it were, under which
you would try to fund it out of your existing resources if the
Treasury did not give you specific funding?
(Ms Quin) In terms of the Business Case based on the
PricewaterhouseCoopers' report, I know that the Minister is very
keen to see that is properly funded and he is not keen to embark
down what I would describe as a half-baked route. Obviously, there
is always an on-going commitment to modernisation of information
technology and modernisation of our processes, so, if say, in
your scenario the bid was unsuccessful, that does not mean that
we simply stop and stagnate. I know that the Minister wants to
be assured, if he supports a Business Case of this kind, that
the funds are there. In relation to some of the fears expressed
earlier, I think by Mr Jack, about Government IT projects, if
they are not properly thought out and properly funded they can
go badly awry. Obviously, we very much want to avoid that.
329. In the absence of Treasury funding you
would seek to make continuing improvements and adjustments in
the way that services are delivered, but the reorganisation, such
as is described in the PricewaterhouseCoopers' report with the
new structures, would depend upon Treasury funding. Clearly, some
of your people or services can be allocated to the regional offices
and you could achieve great co-ordination at regional level in
relation to a specific project, but broader restructuring depends
upon that funding?
(Ms Quin) Yes, indeed. The large-scale project broadly
depends on the funding being secured.
330. Who is preparing the Business Case?
(Ms Quin) It is being prepared within MAFF. If I get
this wrong I shall write to you, but I think it is being prepared
in consultation with people like ADAS and others. Basically, it
is being done in-house.[1]
331. It will address all the issues raised in
paragraph 188 of the PricewaterhouseCoopers' report?
(Ms Quin) Yes.
Mr Jack
332. You talk about the Business Case and your
submission says that the Minister has asked for a more detailed
Business Case to be prepared, testing the key assumptions in the
PwC report. Can you tell us the criteria by which that Business
Case will be assessed?
(Ms Quin) It is being looked at in a variety of ways,
breaking down the different elements of the proposals made in
the PricewaterhouseCoopers' report and looking at how deliverable
those seem to be. The pilot scheme at Northallerton is part of
that information process, to test out how robust the findings
are in terms of defending the bid and also in consultation with
the trade unions and the others so that when they ask how satisfied
they are that they can deliver, we shall be able to provide those
answers.
333. That is an interesting description but
you veered away from paragraph 11 of your own submission, in which
it summarises some of the criteria at which, I suspect, the Minister
is looking. It talks about providing "a significantly better
service to farmers and traders by reducing bureaucracy, placing
a high priority on customer service and speeding up claim processing
and submission through the use of electronic forms". Returning
to the question that I asked about the way in which the Business
Case will be assessed, what weighting are you attaching to each
of those criteria against an obvious overall requirement to produce
a system that costs less money in administering the 70 or so separate
CAP payment schemes that you have to administer? Where is the
balance? Is it a straightforward, financial rate of return, or
are you netting off absolute cost-savings against improvements
in service against these other criteria? How will that be done?
Will it be done objectively or subjectively?
(Ms Quin) Obviously, in terms of costs, to a certain
extent, those figures can be done fairly objectively, but in terms
of service some of that has to result from our consultations and
discussions with people who use our service. Earlier in questioning
Jane Brown, there was some discussion about who our customers
are, whether it is the European Commission, the farmers, or the
UK Government. I suppose the answer is that it is a mixture of
all those things. We need a system that minimises disallowance
because disallowance costs the UK Exchequer. At the same time,
we do not want British farmers to lose out in comparison with
their European colleagues if we are not delivering a sound system
to them. We want to ensure that the staff that we have working
on the system work efficiently and derive job satisfaction through
it. To a certain extent, there are management tools for looking
at such things, but at the end of the day it will not be totally
objective; there will be a little bit of subjectivity, in other
words, the interpretation of what people tell us and what the
results of the process are.
334. The key driver is saving costs?
(Ms Quin) No. I would say that the key driver is delivering
a better and more efficient service.
335. How much percentage reduction error is
there, as mentioned by Mr Drew? Are you saying that there should
be X per cent fewer errors or Y per cent reduction of such an
allowance? The Business Case will have to be assessed. What factors
will decide the matter?
(Ms Quin) Jane Brown mentioned some of the targets
that we have in addressing the efficiency issues, that we would
have to address anyway whether we were going down this particular
route or not. I remember answering a Parliamentary Question from
Mark Todd which gave a breakdown, which I am sure you have seen,
of the efficiency results at different RSC offices. As Jane Brown
explained, we would want to tackle those irrespective of this
particular process. In terms of this particular process we want
to see visible returns on efficiency in each of the areas that
the new process would deal with. In terms of disallowance, if
you look at the figures over the past few years, you will see
that there has been a reduction in disallowance already across
the board for the UK. We would like to see that come down further.
Chairman
336. On the disallowance argument, if I were
a farmer I would be inclined to say that the higher the disallowance
the better MAFF is trying to help me. When as an MP I receive
queries, I consider that the decision has been pretty tough on
farmers and very rarely is the case sustained. The answer is always,
"If we did this, we would get disallowed". I cannot
help thinking that everywhere else in the known world a Minister
would be keener to help the farmer and less keen on disallowance,
and perhaps that is something for negotiation in Brussels.
(Ms Quin) Even in this House, I imagine that one would
get mixed reactions to that. I would find that line a little difficult
to put forward to the Public Accounts Committee—if I were
being cavalier about money that was being deducted from the UK
Government. However, I actually believe that you can do both things:
you can run an efficient system in terms of the European Union
and avoid disallowance, which often brings various Member Governments
in for criticism, and at the same time have a good service for
British farmers. I do not believe that that is an impossible circle
to square. I believe that we can pursue both goals.
Mr Opik
337. Farmers value face-to-face contact with
Regional Service Centres' staff especially in relation to forms.
How much does that play a part in considering office closures?
(Ms Quin) It has played a part in the feeling that
there needs to be a good regional presence of MAFF in the future.
It has also coloured our views in terms of looking at some of
the suggestions in the PricewaterhouseCoopers' report for such
things as call centres. I am not denigrating call centres, but
all of us know that they can be a mixed bag indeed. One can ring
a particular call centre, press lots of different buttons, listen
to lots of irritating music and then just arrive back at exactly
where one started. On the other hand, some systems can be very
effective. As a Minister, I shall not sit here and advertise,
but my own bank operates a very good call centre service, more
or less day and night.
Mr Mitchell: That is probably unique.
Chairman
338. They are probably closing branches as well.
(Ms Quin) In terms of customer satisfaction, they
score pretty highly. Such things are variable. As Ministers, we
have a responsibility to feel confident that, in such a system,
training standards would be good, that the commitment to a certain
approach to dealing with customers would be adopted and so on.
Those are issues which, if they are handled well, can be reassuring
to farmers. I am also struck by what I understand has been some
of the evidence submitted to you and some of the impressions that
you seem to have acquired so far, with which I would concur, that
some people, particularly those who are geographically quite close
to Regional Service Centres, tend to make considerable use of
them, but that is far less true of those who live further away.
We want to ensure that there is a reasonably uniform standard
of service to farmers wherever they may live in geographical relation
to the physical offices of MAFF.
Mr Opik
339. Ms Brown referred to clinics. Could that
be a way forward? It would mean taking the service to markets
and so forth, perhaps in peak months, or something like that.
(Ms Quin) Yes, indeed. That will be a good approach
to adopt. I can imagine, for example, that some mobile advice
units could be particularly useful in going to markets as we reach
the deadline for submissions of claims, and so on, where often
farmers are keen to have some face-to-face contact. There are
also some interesting proposals around that are not finalised
yet, for example, in terms of the review of the work of rural
post offices. One suggestion is that they may provide more of
an interface between the public and government departments and,
for example, advice on CAP payments could be part of that.
1 Note by Witness: The Business Case is being
prepared by MAFF and the Intervention Board with assistance from
PA Consulting. We are also taking account of the findings of a
research project on farmers' use of IT, in which ADAS is participating. Back
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