Examination of Witnesses (Questions 1
- 19)
TUESDAY 18 APRIL 2000
JANE KENNEDY
MP, SIR HAYDEN
PHILLIPS KCB AND
MR NICK
SMEDLEY
Chairman
1. Good morning, ladies and gentlemen. Welcome
to this one-off evidence session on the Public Trust Office—a
quiet but very important corner of the Lord Chancellor's Department.
We have a deal of evidence suggesting that this is the wrong time
to start making the changes which are proposed—the reform
of mental health legislation: how do you react to that?
(Jane Kennedy) The proposals that Making
Decisions brought forward, the consultation document on the
legal changes that we were proposing, will require parliamentary
time, a legislative slot, which we have not got yet. You know,
as well as I do, the vagaries of achieving such a slot. I believe
there are improvements we can make to the performance of the Public
Trust Office and its various functions to the benefit of the client
group we are serving that we can make without legislative change.
Therefore, given the criticisms (which were very severe and serious)
we could not simply allow the Public Trust Office to continue
as it was and wait until whatever time was made available in a
year, two years', three years' time.
2. We have had a great deal of evidence saying
you tolerated under-funding and under-performance which brought
the PTO to this stage that the Chant Report unveiled—so
what is the rush? You seem to be arguing administrative convenience
over making these changes?
(Jane Kennedy) I would say that what we are doing
is responding to criticism of the service we have been called
upon to make to some of the most vulnerable people in society.
We have not been providing the service I would want to be able
to come before you and say, "I'm proud of what we are doing".
I think we are being criticised for the work we have done; that
criticism has been well founded. I think the Quinquennial Review—the
five-yearly review of the performance of the Public Trust Office—identified
very clearly the difficulties that the Public Trust Office staff
were facing. You have to understand that the Public Trust Office
had been operating under a number of difficulties. It was required
to be completely self-financing, in the sense that any changes
in investments to the work of the Public Trust Office had to be
met by charges levied on accounts of the client group. Therefore,
the Public Trust Office was feeling constantly restrained, and
you could understand that sense of restraint. I think also there
were other factors; and the Quinquennial Review pointed to the
fact that some of the key performance indicators were not appropriate
to the work that the Public Trust Office was performing, were
not adjusted in accordance with the changing times in which the
Public Trust Office was working; and, therefore, the Public Trust
Office failed to modernise with the changes that were taking place
in society, and with the changes in medical treatment available
to people with mental incapacity. When we received the Quinquennial
Review, we were faced with some very serious problems that needed
urgently addressing. I believe that the proposals we are now making
will see the investment that you might say should have been made
over a period of years.
3. Was it coincidence or somebody with a sense
of humour who picked Miss Chant to do this Review, given that
she was less than a resounding success when she presided over
the Child Support Agency?
(Jane Kennedy) I think the Review she has undertaken
is a very good piece of work; it is very thoughtful; it is written
in a very easily accessible style; and I think we were grateful
for the work she did. I have no criticism of the performance of
Ann Chant in the way she has conducted the Quinquennial Review.
4. Could you tell us, please, which of the proposed
administrative changes will require primary legislation?
(Jane Kennedy) We are taking forward immediately,
for example, changes to the Trust work, some of which may need
legislative change. We are going to consult very carefully about
those proposals. The actual work will transfer to the Official
Solicitor; and after that transfer we will then consult further
about exactly how that work should change and about the proposals
in the Quinquennial Review. Most of those proposals would not
require legislation, I understand.
5. Are you bidding for legislative time in the
next Session, or do you accept that this may have to wait until
2001/02?
(Sir Hayden Phillips) We are waiting to hear how well
we have done.
Mr Cawsey
6. We have obviously seen the documents relating
to this and we have had submissions as well. Whilst the case from
your Department is clearly that things have to change and move
ahead, we have also had submissions from people who are less convinced.
What work has the Department done on looking at a cost benefit
and risk analysis of the plan to shut down the PTO and re-distribute
its functions?
(Jane Kennedy) The first thing to say is the Public
Trust Office will cease as a stand-alone public agency on 1 April
next year; but the work of the Public Trust Office will continue,
and ministerial responsibility for that work will continue. We
are, in fact, proposing significant enhancement to the role of
the Protection and Receivership Divisions of the Public Trust
Office, so that the work they will be doing in the future will
be very much more significant, and the oversight of the role of
receivers will be very much enhanced. As you say, the development
of this work will cost money, and the detail of the cost benefit
analysis will be worked out as the total change programme—probably
not until later this year, round about the time of the Autumn.
(Mr Smedley) As the Minister has said and as the document
Making Changes, I hope, makes clear, we have a route map
for change, but there is an enormous amount of detail to be worked
out and we have deliberately set out to do that in a consultative
way. What we want to do over the next six months or so is to settle
the details of some of the points and to do a cost benefit analysis
at that stage of different options—for example, whether
we should use the Inland Revenue; whether we should enter into
partnerships with different organisations—and the costs
will vary according to where we get to on that.
7. At this stage, whilst a decision has been
taken to move ahead for next year, that work has yet to be undertaken?
(Mr Smedley) Yes, the detailed cost benefit analysis
has yet to be undertaken.
8. Of course, this is a second change—bearing
in mind that back in 1994, which is when the Agency was set up
in the first place, before that it was just part of a Government
Department. What was the work that went on at that stage that
decided the Agency was going to be the answer to it all, which
clearly did not happen in reality? What were the disadvantages
of just leaving it as a Government Department, rather than going
to an Agency, especially when you see what has happened since?
(Jane Kennedy) I think I would have difficulty in
answering a question that was so far back.
9. Presumably in 1994 some Minister was willing
to say, "This is a dreadful mess, and this Agency is going
to be the answer to it all". Here we are now saying it is
a dreadful mess and the private sector is going to be the answer
to it all, or whatever.
(Sir Hayden Phillips) What you had was a position
where you had a bit of government that was delivering services
direct to members of the public. There was a policy at the time
that if you could put them into an Agency which had a sharper
focus on that service delivery that should be done. That was a
decision taken under a previous administration, and that was very
much in line with the approach at that time. That is the basic
history.
10. Why is not one of the options to go back
to having it as part of a Minister's Department?
(Jane Kennedy) That is one of the options we are considering.
This may be the first instance of an executive agency being brought
back in under the supervision of a Department.
Mr Cawsey: Some would say it sounds like re-nationalisation!
Chairman
11. Look at Rover, please!
(Sir Hayden Phillips) We are very conscious of risks
in this area. You have got three parts: you have got the Court
Funds operation, and this is an integral part of the Court system
of financing county courts and all the rest; secondly, you have
got the Trust function, and we have got two Public Trustees used
as a last resort—the Official Solicitor and the Public Trustee—let
us put them together in one. Then you are left with the core business,
looking after the financial affairs of the mentally incapacitated.
We are quite serious that we should really consider whether that
work should come back into the core department, at least in the
transitional phase, where it would be subject to closer supervision
by Ministers and by senior officials. We have not taken a decision
on that but—
Mr Cawsey
12.—it is still on the table, as it were.
(Jane Kennedy) We would be interested in the views
of this Committee, for example, on quite a number of the proposals
for change we are making in the document Making Changes.
13. Does that mean at this stage you could not
tell us out of the staff that currently work for the PTO how many
are likely to be transferred into the private sector as a result
of the proposed changes?
(Jane Kennedy) I would not want the Committee to form
the view that we are privatising the functions of the Public Trust
Office. The Court Funds Office staff will largely transfer with
the function of the Court Funds Office to the Court Service in
the Lord Chancellor's Department.
Chairman
14. How many people is that?
(Mr Smedley) It is about 80 staff.
(Jane Kennedy) That is the Court Funds Office. The
staff working in Protection and Receivership, we recognise that
there is a reservoir of skill and experience there which we very
much want to retain. In the enhanced role that the Mental Incapacity
Support Unit will perform in terms of assessing receivers before
they are appointed, monitoring receivers after they have been
appointed, and undertaking the other work that these two Divisions
do, including the accreditation of the Enduring Powers of Attorney,
those roles will continue and we will require staff to undertake
those roles. We do not see there being any compulsory redundances.
Certainly it is my objective to avoid compulsory redundancies
if at all possible. We see staff who are currently doing the Court
Funds work transferring; the staff performing the Trust work will
transfer with that work to the Official Solicitor's Office; and
the remaining staff we will seek to re-skill and find work for
them in the new Unit which we will be establishing. There may
be some staff who will find alternative opportunities elsewhere
in the Civil Service; but at this moment we are hoping that the
programme of change will allow opportunities for staff to take
on new roles and to develop their own work. I hope that we will
be able to avoid, as I have said, the need for compulsory redundancies.
Mr Cawsey
15. You are not intending to push any of the
staff into the private sector as a result of the changes?
(Jane Kennedy) I am not quite clear what you mean
by "push them out into the private sector". There may
be some in the Investment Division, for example, who will transfer
with that work. There may be a few who would do that, but it would
be transferring with the work and where new opportunities might
arise for them.
Chairman
16. Is it just me, Minister, who is rather puzzled
that in evidence-based policy-making there is no cost attached
to the various options better to inform the debate and discussion
about which option is the best one? You strike me as putting the
cart a mile ahead up the road in front of the horse. If we do
not know the cost—it is a factor in some of these options:
what costs more, what costs less and what costs the same—if
you have not costed them how do we know what we are looking at?
(Jane Kennedy) We have costed the change programme;
it would not be true to say that we had not costed it. We do believe
that the changes we are proposing are going to require significant
investment. There will be a large one-off cost to implement the
change programme. It is important to appreciate that it would
have been necessary to incur these costs whether we had left the
Public Trust Office in its current form or not. Perhaps Nick can
help on the detailed costings of different elements of the package.
(Mr Smedley) What I was trying to say earlier to Mr
Cawsey was that there are a number of options which we can pursue.
We have not done the detailed cost benefit analysis on a number
of different options; but what we did on receipt of the Quinquennial
Review was we costed the sort of changes and improvements that
seemed to be required under any scenario. We did reject quite
quickly, as the Lord Chancellor did, doing nothing. The organisation
needed some significant investment. What we concluded was that
if we introduced the changes set out in the booklet Making
Changes we think that the total cost may be in the region
of £25-30 million.
17. One-off?
(Mr Smedley) Yes, exactly, a one-off cost. If we kept
the Public Trust Office going in its present structure (and I
am not sure there would be many advantages to that) we would still
need to invest to practically the same tune in order to invest
in IT, training and so on. Perhaps the disadvantage of that option
would be that we would choose to stay in the same accommodation;
whereas, by restructuring, it looks as though we may have an opportunity
to sell the existing accommodation and that would help us realise
some money.
Mr Winnick
18. Minister, you said in answer to a previous
question that it is not privatisation, but in fact it is a form
of privatisation, is it not? The Public Trust Office is being
broken up in effect?
(Jane Kennedy) The Public Trust Office in its current
form will be broken up, yes. I think it is probably useful if
we talk about the receivership role, which is what I think you
are getting at. It is also important to understand that private
receivers in the shape of solicitors already undertake this work
in very many instances. In the course of the change programme
that Nick Smedley has been responsible for implementing, one of
the first things we did was set up a stakeholders group, which
comprises a number of organisations, not-for-profit organisations
and charities, who are involved very actively in this field. In
the course of listening to these stakeholders it became very clear
to us that there were organisations in this sector who believed
that they could undertake the receivership which is currently
undertaken by the staff of the Public Trust Office. That is, where
there is no receiver obvious, whether it be a relative, carer
or a local solicitor, then the Public Trust Office staff have
performed that function. It became clear to us that there were
these other areas of expertise out there who were very willing
to undertake the work. Particularly when you consider that the
range of clients that the Public Trust Office deals with is not
one generic type of client—there are lots of different types
of client; there are young people who have been injured in an
accident and suffered brain damage who receive significant sums
in damages; there are an increasing number of older people who
lose mental capacity due to illness over time—therefore,
there are very many different kinds of patient groups, if you
like. What we will be introducing, as a result of the changes
we are making now, and what will be augmented when we get the
legislative opportunity to do it, will be a system which is tailor-made
to the needs of the individual client—instead of the current
service we are operating as a receiver of last resort, which is
everybody gets the same standard of service and, in actual truth,
it is not a very good standard of service that they receive. That
would be my initial response to that. I know it is going to prompt
further questions. I believe very strongly that what we are proposing
is a real step forward in terms of the supervision of the finances
of the most vulnerable people in our society. I think the thrust
of the changes we are proposing has been largely welcomed.
(Sir Hayden Phillips) Ministers remain absolutely
and fully accountable for the services that are delivered. I will
remain fully accountable, as Accounting Officer, for what goes
on. We are not removing the responsibility from the public sector
and from Ministers.
19. It is a question of semantics perhaps. It
seems to me that work which is now done in the public sector will
be done by the private sector. I accept the point the Minister
and Sir Hayden have just made, namely there will be a regulation
and responsibility. That is not unusual with privatisation or
semi-privatisation. Minister, we have received a good deal of
correspondence giving a point of view, and there may be others
who have not written to us who would be very much in favour of
what is being done; but the correspondence which we have received
(obviously circulated to all members of the Committee) does not
give a picture of great optimism. They argue there should have
been more consultation—and perhaps there was not sufficient
time, I do not know. One person who seems to know what he is taking
about writes: "I am concerned about the scandalous way the
Public Trust Office is to be broken up and the damage and effects
it will have on the mentally ill in our society". We have
had a note from the Alzheimers Society. There does not seem to
be a feeling that what is being done is highly responsible. In
other words, there seems to be a good deal of unease. What do
you say to that, Minister?
(Jane Kennedy) I would say I have actually met with
some of the organisations who form the stakeholder group; and,
whilst there are differing views about some of the proposals we
have brought forward, I would say that this is the reason why
the Making Changes document contains such a large element
of further consultation; because we are conscious we have only
been making these changes within a period of six months and it
has taken us to this point to really form a view about what direction
we think the Public Trust Office should take from here on. We
very much have at the forefront of our thinking the protection
of these most vulnerable patients and clients. I am not satisfied
that the protection they have been receiving is as good as it
should have been. I am not satisfied that the supervision of receivers
as it stands at the moment is as good as it should be. The proposals
that we are bringing in, given the safeguards Sir Hayden referred
to, will offer a much stronger protection against defraud of their
accounts and abuse than currently exists at the moment.
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