Select Committee on Agriculture Minutes of Evidence

Examination of witness (Questions 40 - 59)



  40. I want to talk in more detail about risk management. One of the risks is with the existing business—we are focusing on what will be, but you have also got to run what is.
  (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 simultaneously?
  (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 operating—by 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 seen—and I appreciate that the world has moved on—each 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 these plans.

  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 project?
  (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 whatever—if 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 proper manner.

  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 been made?
  (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 certain difficulties.

  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.

Mr Jack

  56. How much were you told had been spent on it?
  (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.

Mr Todd

  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 service.
  (Mr McNeill) I was not involved in the thinking for the selection of sites. It did happen a year ago, or some months ago.

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