Examination of witness (Questions 40 -
WEDNESDAY 7 FEBRUARY
40. I want to talk in more detail about risk
management. One of the risks is with the existing businesswe
are focusing on what will be, but you have also got to run what
(Mr McNeill) Exactly, yes.
41. Are you confident that there are no risks
to the existing business, particularly in the context of things
like disallowance, because people are trying to look two ways
(Mr McNeill) No. We are talking here of the operations
of CAPPA. The position is that we have now appointed a Director
of Operations, as I mentioned earlier, Hugh McKinnon, who is behind
me. Below the Director of Operations we propose to have three
directors. One will focus on business continuity; that is Peter
Watson. That is his job. His job is to ensure that in the midst
of all this change over the next three or four years, the business
continues to operate, either by moving work between offices, from
closing offices to remaining offices, by moving staff, where possible,
to ensure offices continue operatingby whatever means,
his task is to ensure that there is business continuity planning,
within a risk management framework, and that we continue to manage
the business. There is then an Operations Director, who we hope
to appoint within the next week to ten days, and we can now identify
some very strong candidates for that post. Their job will be to
ensure that the day-to-day processing and running of CAPPA's business
continues. We have a third director under the Director of Operations,
and the proposal is that that Director's focus is on a number
of operational issues, for example, the National Inspection Force,
but in particular on the operations work stream, that is, making
sure that the new systems development will meet the needs of the
operational unit. That is the way in which we intend to ensure
that we have management who understand the business heavily involved
in the future development.
42. When we were doing our inquiry into the
Regional Service Centres, we were told that the Government were
going to develop a comprehensive risk register which covers this
restructuring programme, and I am assuming that in your business
plan, the document dated 24 July, starting at paragraph 10.6,
"Programme risks" is the comprehensive list that the
Government told us was going to be drawn up.
(Mr McNeill) There is now a full-time Risk Manager
appointed. I think we have moved on somewhat from that document.
The last one I looked at was much more detailed than that. Going
back to July last year, I think that was probably an initial,
first cut on the exercise. We have moved on. I am happy to supply
you with the detailed risk management plan that is in place now.
43. So far that is all we have as an indication
to what risk there is. In fact, in a document which arrived only
yesterday under the signature of Joyce Quin, we are told in paragraph
12 "Risk management. The Restructuring Programme includes
a formal risk identification and management procedure. Risks are
reviewed monthly by the Programme and Business Continuity Managers"it
sounds more like a theatre than an IT project to me"to
evaluate the risk, identify mitigating actions and ensure that
each risk is `owned' by a named individual with the Programme
team." That sounds wonderful, but who drew up this first
risk list and who has drawn up the second risk list, and is it
going to be reviewed by these high-powered people you are going
to recruit, such like the Director of IS?
(Mr McNeill) I will have the answer in a moment as
to who drafted that. It is before my time, so you will have to
bear with me. The Risk Manager currently in place is a specialist
consultant who we have engaged from PA. As the paper you have
reports, this is reviewed regularly. The Restructuring Programme
Board, which meets on a monthly basis under the chairmanship of
Brian Bender, reviews that risk plan and it is updated.
44. You can write a list of risks, but you then
have the problem of deciding on, if you like, which are the serious
ones and which are the less serious ones. What criteria are you
employing to decide the level of risk, and therefore where your
management effort is being deployed to minimise risk? At the moment,
in this document, which I have seenand I appreciate that
the world has moved oneach risk is deemed to be equal,
because there is no attempt to differentiate between them.
(Mr McNeill) The methodology is to first of all identify
the risk and assign an owner; to assess the implications and the
probability of the impact; to implement action to mitigate the
risk, reduce probability and/or impact; to draw up contingency
plans for major risks, and to put in place arrangements for managing
45. The owners therefore would regard their
area of risk as as important as any other area of risk. Which
would you identify as the riskiest parts of this project?
(Mr McNeill) If you want to talk of early CAPPA, the
riskiest part in my mind is service failure and farmers not receiving
their money. That is very much at the forefront of my mind, followed
by disallowance from the Commission. So either farmers being penalised
because of difficulties, or indeed, the Commission not being satisfied
we have maintained the level of audit, etc. If we consider end
game CAPPA, I think the biggest risk is the selection of the wrong
partner in developing the systems, and trying either for financial
or time reasons to roll them out too quickly, without the safety
net of expensive parallel running, without ensuring that the systems
are in actual fact going to produce what is required, and in addition,
without ensuring that the farmers and others who use the systems
are content to use them, and again, for other reasons, removing
too quickly the current front desk, face-to-face arrangements
until we are satisfied that the new arrangements can be worked
by the farming community. Those are the key risks in my mind.
46. In this paragraph in Joyce Quin's document
to the Committee, it says, "The work of the review team and
the changing status of the risks are evaluated by a monthly Restructuring
Programme Board, chaired by the Permanent Secretary." I think
you gave us a flavour of that earlier on by saying that he was
involved, but you also indicated that there was another structure
involved. Again, could you describe with a little more clarity
the line of accountability for risk. You said if there was a problem,
you could pick up the phone to the Permanent Secretary and have
a discussion with him. I am getting a bit confused as to the various
lines of communication in the management of risk. Perhaps you
could just clarify.
(Mr McNeill) Of course, we are talking here of the
current arrangements, which is to do, as the Board title indicates,
the restructuring of MAFF. That is the Board which Brian Bender
had set up. Beneath that Board we have the CAPPA Programme Board,
which is currently chaired by the senior responsible officer,
who is Mrs Jane Brown, who is the head of the Regional Services
Group. Those arrangements will be reviewed, certainly, I would
hope, with effect from 1 April.
47. Is Jane Brown the Risk Manager for your
(Mr McNeill) Jane Brown at the CAPPA Programme Board
is obviously very keen to review the risks that arise from the
creation of CAPPA, and so that part of the risk plan is carefully
considered at that Board, and we have identified managers who
are responsible for the risk in whateverif it is IT, it
is the head of the IT stream. The proposal then is that they identify
whether the risk has increased, whether it has been mitigated,
whether we know what contingency plans have been put in place,
and that can be discussed, and a view taken on whether that is
satisfactory or not.
48. This document talks about the changing risks
that are identified, and you said that this document at paragraph
10.6 of the business plan has now been augmented. Can you tell
us who has been responsible for working up all of this risk listing?
(Mr McNeill) That is the Risk Manager, the consultant
we have appointed from PA.
49. So the consultant has done this, and Jane
Brown is taking an interest in it?
(Mr McNeill) No. The consultant is drafting and putting
together a document. When the consultant, who is a specialist
in risk management, identifies a risk, or indeed, when a manager
comes and says, "Whilst we thought we might have difficulties
here, we now see we have difficulties here,"
they sit down and they add that to the risk management plan or
they review what is already stated in the plan. "This is
a greater risk than we thought. This has potentially greater consequences."
They review it. They are really acting in a facilitation role.
We are not allowing consultants to run the business. We are using
the line managers responsible for the business, and they take
the decision, with the consultant advising. Our line managers
are not experts, so we are using that expertise, I think, in a
50. We have touched on the question of the risks
involved in the IT strategy and systems and everything else involved
in this project, and it is obviously central to many aspects of
the change programme that you have identified. Am I right in saying
that until your IS director is appointed, you have not got to
the stage of looking at the systems, testing anything, or developing
the software? Is that work that has to be done, or has progress
(Mr McNeill) There has been progress on that over
the last 12 months. We have a chap called David Davison, who is
an extremely able consultant, who has been heading up the IT stream
for many months now, and we are approaching the stage of putting
together a systems specification, and parallel with that information
technology stream, we also have the operations stream, because,
as you know, we are not trying just to duplicate what happens
now; we are actually looking at what we do from the ground level,
saying, "How can this be improved?"
51. Just to be clear, your expert is designing
what the thing should look like?
(Mr McNeill) Yes.
52. But you have not go down to the nitty-gritty
of the software or hardware?
(Mr McNeill) No.
53. Is it envisaged that part of your existing
systems will form the core of whatever becomes the new integrated
whole or not?
(Mr McNeill) There was a proposal, as I understand
it, that the NURAD development would play a part.
54. Could you spell out what NURAD means for
the benefit of those who do not always think in acronym terms?
(Mr McNeill) New Regional Administrative Development
Exchange System. That system is not now proceeding because of
Mr Jack: So that is off the drawing board and
we are back at the clean piece of paper stage.
55. How much did you spend on it?
(Mr McNeill) I was not involved, Mr Chairman.
56. How much were you told had been spent on
(Mr McNeill) Again, Chairman, I plead ignorance.
57. Would you consider asking how much had been
spent on it and letting us know?
(Mr McNeill) It has no impact on my role as Chief
Executive of CAPPA. There was a Board responsible. They took a
decision on the basis of assessment.
58. I think, Chairman, we are still owed an
answer on this. At an earlier questioning session I asked whether
the amount of money that had already been invested in it would
be written off, and we were told we would be told. We have not
been yet, and I see in Joyce's note that a decision is imminent
on it. Can I turn to the allocation of work amongst the offices.
Just glancing through, a strange thought came to me that somehow
or other, all existing RSC sites and IB sites appear to have won
prizes, either being allocated work under the RDS arrangements
or being part of one of the specialist services within CAPPA.
Is that right?
(Mr McNeill) I have not seen the note, but the position
in regard to CAPPA is that at the end of this process we will
end up with sites in Reading, Northallerton, Carlisle, Exeter
and Newcastle. That is the proposal. The RDS are brigading their
staff to a number of sites.
59. On a really cynical view of this, this would
appear to be driven by internal MAFF politics and ensuring that
existing employment centres are retained in some sense or another,
rather than necessarily the operational efficiency of any new
(Mr McNeill) I was not involved in the thinking for
the selection of sites. It did happen a year ago, or some months