Examination of witnesses (Questions 560
- 582)
WEDNESDAY 14 JUNE 2000
SIR RICHARD
MOTTRAM, MR
JOHN BALLARD,
MR TOM
ADAMS and MR
ALAN EVANS
Mr Benn
560. How much are you going to spend on consultancies
this year?
(Sir Richard Mottram) Can I ask John if he can answer
that.
(Mr Ballard) I cannot give you the total figure but
we can give you a note which will set it out. There are two broad
categories of expenditure. One is on major schemes like the CTRL,
those sorts of schemes where there are major contracts. The other
area is small things that may be linked in with other work, the
research and development programme may actually have a small element
in there using consultants. We may be spending something like
40 million on research and development and of that perhaps five
million is taken up with consultants. There are two packages.
We can certainly give you a note that sets out the total.
561. As know, in our Report last year this Committee
said it felt the Department should publish more information in
the Annual Report. I understand the point about commercial confidentiality
as far as the detail of the contracts are concerned, but the names
of the companies you are using, why you are using them, why the
work cannot be done in-house and the range of work that companies
are working upon, is that something that you are going to do in
the future?
(Mr Ballard) The difficulty with that is not an unwillingness
to make the information available where we can protect commercial
confidentiality, it is a question of where do we draw the line
on what goes into the Annual Report. As you can see from the document
you have been passing around, it is already a very major document
and if you put everything in it, it becomes almost unusable. We
are not against the concept and we can certainly consider whether
we have got the balance right.
562. You have no objection to publishing the
information in some shape or form?
(Sir Richard Mottram) The constraint on us is commercial
confidentiality.
563. But the fact that the company is doing
the work and getting paid X amount and the area in which they
are working is surely not commercially in confidence?
(Mr Ballard) Where the contracts have been set up,
no. Where we have difficulties is where the contracts may be developing
in the future and therefore we are still in a negotiating position
with the contractors.
564. Can I ask you about the Department's research
programme. In a Parliamentary Answer published yesterday, Ministers
listed 34 pieces of research-linked information campaigns that
were undertaken in the last financial year. Do you know what percentage
of the results get published? Because in the Answer it said that
we publish some, we do it on a case-by-case basis and I was not
entirely clear why the results should not be published in all
cases unless there was a clear case of commercial confidentiality.
(Mr Ballard) The starting assumption is that we publish;
open government. There will be occasions where we do not. It is
simply a safeguard against commercial confidentiality where that
arises but our general policy is to publish and we can certainly
see if we can give you some data.
(Sir Richard Mottram) Do you want the data in relation
to that Answer?
565. A quick note on that would be very helpful.
Can you give us an example of a piece of research which the Department
has commissioned which has changed the Department's policy or
the way in which you do things? I am trying to discover how research
actually assists you.
(Mr Ballard) I think there are a number of examples
one could give. As I was discussing with the Sub-Committee last
time, the research we did into aggregates was certainly an important
contributor to the ultimate decisions on the Aggregates Tax.
Mr Gray
566. It was the opposite. The London School
of Economics said "Do not have a tax" and the Treasury
imposed an Aggregates Tax. That is a very good example of research
which did not lead to the ultimate conclusion.
(Mr Ballard) What the research did was give us a good
indication of the sorts of sums you would charge if you wanted
to institute a tax and therefore in that sense—
567. Am I right in thinking that the London
School of Economics came to the conclusion that an Aggregates
Tax was the wrong way to do it and a voluntary scheme was the
right way to do it and the end result as announced in the Chancellor's
Budget Statement was exactly the opposite of the London School
of Economics' conclusion?
(Mr Ballard) The report covered a lot of ground. I
do not from memory think we did ask it to address the question
of whether or not to have a tax. What we asked it to do was to
give us a handle about people's attitudes to what they would pay
in order to deliver environmental improvements. That was one example.
(Sir Richard Mottram) Perhaps not such a good example!
We do research, for example, on road surfaces, how best to maintain
them and keep them quiet.
Chairman
568. Perhaps you could give us a list.
(Sir Richard Mottram) It might be quite a long list.
Let's pick out some examples that might be of interest to the
Committee.
Mr Benn
569. Do Ministers see and approve the research
programme?
(Sir Richard Mottram) That is a very good question
to which I do not know the answer. Let me go away and look at
it.
Mrs Gorman
570. Could I ask one question in relation to
this. Could you tell me what research, if any, or consultancy
you do on the amount of road space which is made unusable by the
growing tendency to put up barriers of one kind or another or
stripy lines which is reducing the amount the road surface which
is available? Are you researching that?
(Sir Richard Mottram) We do research individual projects
and whether they would not or would not improve traffic flow,
for example.
Chairman
571. On this question of consultancies, London
Underground told the Sub-Committee that consultancies for the
PPP might be about £60 million, a little bit over. What is
it actually going to work out at?
(Mr Ballard) The figure to date is £60 million
as reported in the PQ. What we said in the letter to the Committee,
and it remains our position, is that we do not feel able to give
an estimate about the total cost because it raises points that
I have referred to before about we think it would affect our ability
to deliver value for money in terms of our negotiating position
with contractors. We do not feel that the relationship with the
consultants and the future work programme is sufficiently stable
that it would be sensible for us to bind ourselves in public to
a particular figure for total spend. Obviously as we go through
the contract our position may well change but at the moment we
do not feel we can give you a figure.
572. The process is you ask the consultants
to come up with suggestions for more consultancy work?
(Mr Ballard) No, what we are saying is that we have
got a particular task here which is a complex task. People are
working their way through it. As you know, with any complex task
you cannot be absolutely sure when you start the process that
you will not need to extend or do some further work in particular
areas which may require additional consultancy or different areas
of expertise.
Mrs Dunwoody
573. The problem with that answer, Mr Ballard,
is that it gives you a get out forevermore. The Committee has
asked you more than once about the very large sums being spent
by the Department on consultancy and the answer that you have
given us today says in effect, "We might need some extra
work in the future and because we might need some we cannot have
an overall figure that the Committee can identify."
(Sir Richard Mottram) What we are saying in relation
to the London Underground PPP is that there are consultants working
on that project at the moment and that consultancy cost will increase
compared with whatever number we have quoted as the historic cost
because consultants will continue to work on that project until
it is completed. What we are reluctant to do is give a figure
for the total cost of that consultancy work because it is, in
our view, in the commercial interests of the people being employed
by London Underground and that is London Underground's view. That
is our nervousness, that is what is holding us back.
574. One understands that.
(Sir Richard Mottram) If I can say in relation to
that because I have been personally involved in this, we share
with you concern about the cost of consultants and we did review,
for example, with London Underground the cost of consultancies
in relation to the PPP a little while ago to satisfy us all that
what they were doing represented value for money.
575. We could get into the absurd situation
where the consultants are costing more than the project. We have
not got to that stage yet but—
(Sir Richard Mottram) No you could not because we
review the value for money of the use of consultants in relation
to each project.
Chairman
576. Surely, if you are looking at the costs
of this we started off saying it was £65 million costs, if
it goes up to 70 I can understand your arguments for confidentiality
but if you are talking about it perhaps going up to 100 we are
turning it into a totally different—
(Sir Richard Mottram) No, because what we are saying
in relation to the London Underground PPP consultancy is the value
of that has to be weighed against the potential benefits of the
PPP. We are talking there about a 30-year project with massive
investment. We are satisfied that the way in which London Underground
are conducting that project represents the appropriate use of
consultants. What we are nervous about is quoting global sums
which could be commercially of interest to the people supplying
the consultants.
Mrs Dunwoody
577. You do understand that that puts the Committee
in a very strange situation. You know that the Committee has already
made very clear its worries about this whole PPP. We were told
nevertheless the government was going to be able to assess it
because there would be the involvement of somebody like the National
Audit Office. The National Audit Office, quite rightly, said,
"It is not our function." I think it is going to be
very important that the Department is open with this Committee
in terms of the sums of money that are involved because it does
seem very likely that they growing exponentially.
(Sir Richard Mottram) There are two sets of issues
here. One is are we conducting the evaluation of bids in the London
Underground PPP in a way which will enable everyone concerned,
including the NAO, to establish whether the decisions Ministers
ultimately take, and including this Committee, on that PPP did
or did not represent value for money. We have structured a process
for conducting that exercise in a way which we are confident will
satisfy everyone concerned, including the National Audit Office,
that there is such an audit trail. There is, secondly, a question
about the use of consultants by London Underground in relation
to their part of this task. We have emphasised to them—they
do not need it emphasised by us because they have also appeared
before your Committee—the importance of using consultants
only where they add value that justifies the costs.
578. I want to ask you, Sir Richard, about a
number of task forces that are within the control of the Department.
I asked a written question about the numbers of task forces and
numbers of people from outside who were part of these task forces.
What is the status of people who come from outside industry. There
were, for example, seven from the construction industry who were
working within the task forces. What is their status? Do they
have access to confidential information? Do they, if that is the
case, undertake the same attitude towards secrecy that civil servants
are bound to by their terms and conditions? How do you build the
Chinese wall that ensures someone working on a task force with
access to the Government's internal information is not using that
directly for the commercial interests of their own companies?
(Sir Richard Mottram) I think there are different
cases and I have not, I am afraid, seen this particular answer
but there are different types of people. Some people are seconded
into the Civil Service and are working full time in the Department.
At any one time there are a number of these people, and they come
from a variety of backgrounds, including the private sector. It
is the policy of the government and the Civil Service to encourage
this process, insofar as the Civil Service can set policy, because
we think they can bring to the way in which we work different
experiences, new insights, etcetera. If they are operating on
secondment then they are subject to the same rules as everybody
else in the Department.
579. They do undertake at the beginning of that
secondment to operate on precisely the same basis and after they
return to their original commercial companies what is the status
of the information they have gleaned from the Department?
(Sir Richard Mottram) What we will always try to do
is to ensure that when people are seconded in they are not put
in places working on particular things where there is a risk of
a conflict of interest of that kind.
580. How do you do that?
(Sir Richard Mottram) We think about where they are
coming from and the work we are going to give them and we think
very carefully about whether there is a risk of criticism because
obviously we are dealing here with two sets of public policies
which it is quite tricky to reconcile. One set of public policies,
which I believe is absolutely right, is to ventilate the Civil
Service and inject new insights from outsiders of all sorts. Another
policy is that people must not gain information from within government
that is used for improper purpose. So what we do is we think about
the sort of people we are bringing in and we expect them and we
only recruit them if we think they are of the right quality, including
integrity. We do not put them in places where there is a risk
of a direct conflict of interest. That is what we are trying to
do. I cannot guarantee that we manage that in every case. There
is no evidence that I am aware of that suggests that we have got
that wrong or that people we have brought in have abused their
position.
Chairman
581. Perhaps we could finish on a cheery note,
your proudest departmental achievement for the last 12 months?
(Sir Richard Mottram) Perhaps this gives me a chance,
Chairman, to say one thing I did want to say and I did not say
at the beginning because I think it is rather boring if I begin
with an opening speech but then I regretted it as the session
went on. I will answer your question secondly. If I could just
make one point which is of fundamental importance to me. I think
the departmental Annual Report shows whole sets of achievements
by the staff within the Department across the piece and those
they work with of a very tangible kind and this bears on a point
the Select Committee made last year which I have to say I personally
found very difficult to deal with. I think the Annual Report shows
tangible achievements across the piece in relation to things which
are important to people, that is a better environment, housing
which is improving for all sorts of people, better transport on
the basis we discussed, etcetera. We have also in the Annual Report
shown a whole series of improvements in the way that government
works and the way in which the Department itself contributes to
more effective government. I think here about the organisations
we have created like the regional development agencies, the Countryside
Agency, all these things. These are significant successes of a
tangible kind and we can show how they are improving the lot of
people and all this is very, very specific. Thirdly, we also have
produced over the last year a number of very high-quality pieces
of policy work. We have done all three things. On the things for
which I am responsible, I took over a Department which was trying
to come together, was trying to understand what it was trying
to achieve, was trying to learn to work together better, and one
of the personal targets I certainly set myself was that we should
achieve the benchmark of being "investors in people"
because this would show that the people inside the Department
knew what they were trying to do and knew how what they did contributed
to the government's wider objectives, and we achieved that piece
of accreditation. That was an important piece of process which
symbolised a much more important thing, that all the people in
the Department (including the people at the centre) know that
they are delivering tangible improvements for people across the
whole country.
582. On that note, I thank you very much for
your evidence.
(Sir Richard Mottram) Thank you, Chairman.
| 
