Within the Highways Agency PCS are concerned
about the effect that poor financial management within the Agency
has had on staff and their ability to deliver the Agency's Business
Plan objectives including the 10 Year Plan. The Group is also
seriously concerned about the poor management of a project to
deliver Resource Accounting to the Agency.
Following the publication of the Government's
Transport White Paper in 1998 and the Associated New Deal for
Trunk Roads in England, a new role was identified for the Highways
Agency. This new roleas a road network operatorwas
announced in November 1998 and staff were informed that substantial
additional funds had been secured from DETR to recruit new staff
over the next financial year.
Very few additional staff were recruited over
the following yeardue in part to a high turnover. However,
large numbers of posts had been advertised and it was expected
that these posts would be filled in the first few months of this
Little progress was made and it was noticeable
that very few posts were advertised in April and May 2000. Finally
in June 2000, under pressure from the Trade Unions, the then acting
Chief Executive issued a note to staff to explain that the Agency
did not have sufficient running costs to meet expected spend to
the end of the financial year. The main reasons given for the
agency finding itself in this position were that forecasts for
staff recruitment had proved wrong and £3.5 million was handed
back to DETR in November 1999. Divisional Directors within the
Agency were also apparently "working towards aspirations
that the HA
Board had not signed up to. All recruitment was put
on hold as a result.
A bid was made to DETR for more funds to alleviate
the situation, but the PCS Group understand that this was refused.
Instead an extra £1.6 million running costs was identified
by re-categorising some expenditure as programme spend. A thorough
review of running costs was also announced at this time but the
PCS Group has no information on the outcome of this.
In late July 2000 it was agreed that some limited
recruitment could take place provided this was within existing
budgets and did not incur long-term costs. There is however no
central co-ordination of this recruitment and in fact very few
vacancies have been filled.
The net effect of this has been to cause widespread
alarm and confusion. It has also placed significant numbers of
Highways Agency Staff under considerable stress as they strive
to meet objectives with less staff and other resources (training
for example) than they need. PCS is in no doubt that this is adversely
affecting the ability of HA to perform effectively.
The issue of the introduction of Resource Accounting
and Budgeting (RAB) to the Agency also reveals a lack of good
financial management at senior levels within the Agency.
In 1994 a single external consultant was appointed
to advise on how the Agency could meet the requirement to introduce
Resource Accounting by April 2001. It is assumed that this appointment
was made on the basis of Single Tender Action since there appears
to be no record of any competitive process. The Same Contractor,
under a different name, then bid for a contract to introduce Resource
Accounting and Budgeting to the Highways Agency sometime in 1998.
Around the same time, a PCS member working in Internal Audit raised
concerns about the propriety of the project with senior Highways
Agency management. Despite these concerns the Consultant was successful
with bid. The PCS Member was removed from his post and ultimately
transferred out of the Agency. The Project proceeded until the
contract was terminated on 31 October 2000.
What concerns PCS most about this is that the
consultant involved spent over five years at a cost estimated
to be £13 million with the objective of introducing robust
Resource Accounting Systems to the Agency. A New Project "Strategic
Financial Management" has now been put in place involving
new Consultants because the original project failed to deliver
its objectives. It is estimated that this new project will cost
a further £9 million. This means that the introduction of
Resource Accounting to the Agency will have cost a total of around
£22 million and taken around seven years yet it is still
not clear that it will be successful. PCS believe that this does
not compare well with other Government Department's and Agencies
and is worthy of a detailed investigation.