Examination of Witnesses (Questions 1
- 19)
WEDNESDAY 15 NOVEMBER 2000
ANGELA EAGLE
MP AND MR
SIMON JUDGE
Chairman
1. Minister, may we welcome you very much to
the Procedure Committee. We are very grateful to you and Mr Simon
Judge for coming to help us with our inquiry, which is all to
do, as you are well aware, with Section 82 and the original justification
for it. All the Members of the Committee will be asking questions.
I hope we do not keep you long. May I begin by putting the first
question to you. Can we begin by exploring why the Government
originally sought Section 82 powers. In your memorandum you say
that this was to avoid delay in setting up new IT systems. We
probably understand that explanation. However, you also admit
that, and I quote: "a lack of Parliamentary time for paving
legislations has not in the past caused delays." Was there
any reason why these powers should not have been sought in the
traditional way through a paving bill?
(Angela Eagle) First of all, thank for
your welcome. The second thing to say is that the Department first
became aware of some of the practical difficulties surrounding
business modernisation, if I can call it that—very complex
and very large systems, of which the DSS has very many—during
the passage of the JSA Act and also the Pensions Act in the previous
Parliament, the 1994 to 1996 era. In the middle of that, the Treasury
produced a clarification of the 1932 Public Accounts Committee
Concordat, which made it clear that the way in which the Department
had been preparing for major modernisation and change in the past
was no longer in line with the spirit or even the letter of the
1932 Concordat. JSA is the obvious example of this. Therefore,
the Department became aware that it could not make the assumptions
that it had made in the past about how it could spend money in
anticipation of a major change in primary legislation, in order
to ensure that change could be effected in a coherent and timely
fashion in the way that it had been doing in the past. What we
then did was to look at the procedures and how we could stay not
only within the spirit but also the letter of the 1932 Concordat
which, in 1995, when the Treasury clarified it, became a much
stricter interpretation than had been thought. That is where the
beginning of this issue came for DSS. We have probably, more than
any other Government Department, large complex IT systems, which
service a very large programme of work. If I could give you some
examples of how big we are and, therefore, how complex change
can be. We have 460,000 visitors to our offices a week. We have
3.1 million phone calls a week. We issue 15 million order book
foils a week. One million giro cheque payments. 2.5 million ACT
payments. We spend £2 billion a week in money that we give
out to people. So our systems are very, very large, very complex.
Large numbers of people, some of whom are the most vulnerable
in society, depend on us being able coherently to modernise our
systems. So it became clear to us, and certainly to the Department
prior to this Government coming into office, that there was between
an 18-month and two-year kind of time you needed to plan and implement
IT change in a coherent fashion. When we looked at how the Concordat
worked, in the absence of having a special new way of dealing
with it, we would have had two choices: either to rush implementation,
which would put at risk the coherence of IT strategies, the testing
mechanisms, and make the whole project much more risky; or an
even longer period of time between when a bill becomes law and
when it could coherently be implemented operationally with a reasonable
amount of risk. Given that the Department looked at the ways it
might be able to make progress—and it looked quite rightly
at paving bills as you have mentioned—it also looked at
making a call on the contingency reserve. Now the contingency
reserve, it was decided, was for highly unusual expenditure in
times of national emergency, and certainly would not be an acceptable
procedure to use in this context. With paving bills, there were
several issues. One, again you have correctly identified from
our evidence to you, the written evidence, that they have to compete
with Parliamentary time like everything else. Not only is Parliamentary
time scarce, but so is Parliamentary Counsel's drafting time.
The main reason why we did not like the idea of paving bills,
was that the Concordat is not a legislative requirement. It is
an agreement between the Treasury and the Public Accounts Committee.
Using legislative time to overcome it for purely administrative
expenditure did not seem to us to be, if we were going to do it
a lot, a reasonable use of Parliament's time. We took Parliamentary
Counsel's view on this as well. They said it would be an "inappropriate
use of Parliamentary time", which is why we developed the
Section 82 powers.
Chairman: Thank you for that answer. You will
clearly appreciate, Minister, that this Committee is a Committee
of the House concerned that the House should not be bypassed in
any way and that the procedures of this House should give the
House an opportunity of, as it were, refusing this expenditure
if it was not in agreement with it. But we want to continue this
line of questioning and I am going to ask Keith Darvill to follow
up my opening question.
Mr Darvill
2. While accepting the pressures which you have
outlined and indeed contained in the evidence, the Report that
you have provided; Minister, do you accept that there are no close
precedents for the grant of powers under Section 82, bearing in
mind the important balance which the House needs to strike between
evidence and scrutiny?
(Angela Eagle) Can I say firstly that I am an ex-Member
of the Public Accounts Committee myself and I take Parliament's
right to have proper oversight of financial expenditure extremely
seriously. I would not be a supporter of Section 82 powers if
I thought it diminished, in any practical way, Parliament's right
to oversee public expenditure, certainly because I take that seriously.
I do not think that is an issue between us. The second thing to
say— Your question was?
3. Do you accept that there is no close precedent?
(Angela Eagle) This is a power which is unique for
the DSS at the moment. Yes.
4. Do you not consider then that this may be
opening up the flood gates for Government to provide for similar
provisions in other legislation?
(Angela Eagle) I hope I have explained the peculiar
nature of the DSS. There are not many Departments that have the
operational size that we have; that have such a scale of operations;
and that have a legacy of very old and failing computer systems
which we need to replace in a coherent fashion over the next period
of time, whilst ensuring that we can continue with this huge volume
of delivery work that we do in ensuring that welfare payments,
large amounts of money, are delivered to the people who are entitled
to them week in, week out. Clearly other Departments might wish
to make arguments but I would say that another feature of the
DSS, which ties us in a certain way with the Concordat, is that
most of what we do is done by primary legislation. If we are going
to have a programme of welfare modernisation, by its nature we
are going to have to be changing primary legislation; be planning
and organising to deliver new types of services; and get ourselves
in a position where we may want to use Section 82 powers. So I
would say that I am not surprised that this power is unique to
the DSS, at the moment, because of the nature of what we do.
Chairman
5. Are you saying that had you had the adequate
investment in the past, you had had IT systems in place, you would
not need a Section 82?
(Angela Eagle) No. What I am saying is that we are
in a position where we are doing a huge programme of modernisation
and change, much of which will involve us in changing primary
legislation. The child support changes are the first such example
of that. Given our legacy of old systems, it is likely that we
are going to be having to do a great deal of IT procurement in
the future, which may involve us having to organise our preparations
in a way that we have had to with the Child Support Act, but we
will use Section 82 powers only when we think they will be necessary,
and we will come to Parliament in the way that this procedure
lays down, to share our information and approach with you and
ask for Parliament's permission to spend these amounts of money
ahead of Royal Assent, if we think that is necessary to deliver
the changes in a timely and coherent fashion.
Sir Paul Beresford
6. In your opening statement you said that it
is a huge Department. We all agree. It is a huge amount of expenditure,
which we all agree. It has a record on IT which is pretty hairy.
(Angela Eagle) I think I would agree with you about
that.
7. That record goes back quite a while, and
has not been improved since the last election. Yet you are using
a short cut on something that is so important that I would have
expected it to be able to find Parliamentary time. It certainly
would be of Parliamentary interest in the House and yet despite
all of this you are running through a Section 82. It is a back-door
technique.
(Angela Eagle) I do not think it is a back-door technique.
It is a perfectly open and transparent technique. It recognises
that life has changed since 1932 when the Concordat was first
put in place, when all of our systems were clerical. First of
all, the system was a lot smaller but also the way we did our
business then, I am told, (I was not around at the time), was
clerical. Now we are in a different position post IT, of massive
IT/IS projects, procuring them, having private sector involvement,
being in a position which is totally different from the one which
would have faced Government in 1932 when the Concordat was developed.
What Section 82 is, it is actually a parallel track to enable
us to do work which was done on the JSA Bill before Royal Assent
but not in the spirit of the 1932 Concordat. Section 82 exists
because when the Treasury tightened up what the interpretation
of the Concordat was in 1995, the DSS realised that the way it
had been working, the introduction of the Pensions Bill, as it
was then, and the JSA Bill, as it was then, was not in line with
the spirit of that. So Section 82 is a way of creating a potential
chance to have a parallel process to make the preparations that
are technical, that are IT related, that are contractually related,
prior to Royal Assent happening.
8. I understand that from your side, Minister.
If I can think back a few years and if I had been a Minister in
your situation, I would have looked on it as a very much easier
way of putting things through. The other way of looking at it,
from our point of view, is that the equivalent of IT requirements
must be found and needed in the Treasury. They are not using Section
82. They have similar demands from Inland Revenue and Customs
and Excise, I would imagine, yet they have not used Section 82.
You, as a Department, have such a poor record that this does smack
of trying to slip it through the system.
(Angela Eagle) No. Firstly I think Section 82 is an
open and transparent procedure. As a Minister, officials gave
evidence to the Social Security Select Committee on the draft
report which went before both Committees. The Report was laid
before the House. We had a debate before the House. I do not think
it is a back-door method in that way. Having been the Minister
who was giving evidence on the Report itself upstairs when it
was published, we were more accountable for the money we were
spending ahead of Royal Assent, paving the way for this, than
we would have been with a paving bill.
Mr Drew
9. Surely you have a problem here? Whether or
not Section 82 is the right way forward in the process of how
Parliament scrutinises, obviously there was a guillotine. Now,
as you quite rightly say, it was discussed in Committee but it
is not the same thing as being discussed on the Floor of the House.
As my colleague says, there are large-scale IT projects in the
public sector, by their very nature difficult to work with. With
the benefit of hindsight, would it not be appropriate to discuss
this properly through the Department?
(Angela Eagle) In my experience we do not have a great
deal of complex debate about IT procurement in ordinary Committee
stages. We talked far more about what was going to be happening
and in detail of what was going to be happening in the Social
Security Select Committee and the Committee upstairs which looked
at the final Report than, in my experience, we ever did on the
JSA Bill, on which I served as a Member of the Opposition. Because
it focuses on this period of time between Royal Assent and when
work has to begin to be effective in both negotiating a contract
and incurring some of the small-scale expenditures prior to Royal
Assent, we concentrated on that area of planning far more with
Section 82 powers than one would ever do with a paving bill.
10. Could I be clear about this because obviously
I am a bit confused. We know it was guillotined on the Floor of
the House. Was this ever discussed?
(Angela Eagle) What was guillotined?
11. We did not get to discussing Section 82
formally. Was it ever discussed in Committee in terms of procedure?
(Angela Eagle) No, I think that is what you are doing
here. The Committee asked you to do that. We discussed the issue
itself, the expenditure of the money, and what it was for. The
key period for Section 82 powers is the period between when Royal
Assent will be and, of course, we do not know when that will be
until we get it.
Chairman
12. May I interrupt you, Minister. I think the
point we are trying to get at is because of the use of the guillotine,
both on the Floor of the House and in Committee, the merits of
using Section 82 were not discussed. That, I think, is the point
that David Drew was getting at.
(Angela Eagle) I was trying to give you some flavour
of my experience of the use of the power, having been the person
who was involved in the first use of it. Clearly, that is all
I can do as somebody who got involved in laying these Reports
before Parliament and going through the procedure. People will
have their own views as to whether Section 82 powers are appropriate
or inappropriate. I am saying that from my experience of taking
the first use of that power through its procedures, it was transparent,
it got us involved and me involved as a Minister, the Members
of the Select Committee involved, in far more detailed discussions
and sessions on what was going on and what was being done with
this money and when, than any other procedure that I have got
involved in.
13. You are failing to answer the question which
I think we are sensibly putting. Do you not, as a Minister, think
that it was regrettable that the operation of the guillotine prevented
a discussion, either on the Floor of the House or in Committee,
on the merits of using this way of allowing the Government to
proceed with the expenditure of a substantial sum of public money?
(Angela Eagle) Obviously guillotines which prevent
discussion on any procedural change are regrettable, yes. If that
is what you want me to say.
14. It is not what I want you to say but your
response to the question which is important.
(Angela Eagle) It is always better to discuss procedural
changes than not. I do not disagree with that.
Chairman: Thank you.
Mr Illsley
15. Following on questions to the Minister,
as David has pointed out, there are two aspects to this. First
of all, whether Section 82 is the appropriate mechanism to deal
with what the Department wants to do in getting agreement to spend
the money before the Royal Assent. Secondly, whether Section 82
of the Bill, when it came before the House, was adequately debated;
and whether it would have got such an easy passage perhaps if
there had been a debate on the Floor of the House, or whether
it would have been criticised as Henry VIII clauses in bills,
which give excessive powers within a piece of legislation. What
I wanted to ask you was: at the time of safe passage of Section
82, the passage of the Bill, were the Department aware of any
Members who had talked to others, to express opposition or state
they wanted this raised on the Floor of the House? Was there any
feel within the Department that it was going to be a difficult
clause to get through the House?
(Angela Eagle) I was not one of the Ministers who
did the Welfare Reform and Pensions Bill which contains this section.
I am not aware that there were any of those issues or points made
but I am quite happy to go back to the Department and check with
the record of those Ministers who did do the Welfare Reform and
Pensions Act, which is the one we are talking about, to check
whether any such representations were made.
Chairman: We thank you for that, Minister.
Mr Beith: The Chairman of the Social Security
Select Committee at the time.
Chairman: Of course, as I expect the Minister
is aware, next week we will hear evidence both from the Chairman
of the Public Accounts Committee and, of course, the Chairman
of the Social Security Select Committee, so we will have the opportunity
of putting those matters then. Thank you, Minister.
Mrs Fitzsimons
16. Having served on the Public Accounts Committee,
you will be well aware of the Chair of the Public Accounts Committee
and what he has told us: that he thinks this is a regrettable
diminution of the powers or effectiveness of Parliamentary scrutiny
on that expenditure. Now, having served on that Committee, you
referred earlier to the reality of what Parliamentary scrutiny
is, and that this does not really change it much. In fact, you
have said it enhances it. Could you flesh out for the Committee
why you think this is not a diminution.
(Angela Eagle) Section 82 is ahead of Royal Assent
so it is a way, with Parliamentary approval, of being able to
run some of the initial preparatory work that you always have
to do with a complex change in parallel with the bill. So clearly
there is a risk of nugatory expenditure if the bill were to be
defeated or lost or abandoned. Clearly Parliament has got to do
what it can to minimise that risk. I might say that Departments
do what they can to minimise that risk as well. If I have money
as a Minister that I want to spend on things, I do not want to
see it going down the drain. I want to see it being used and spent
effectively. The point at issue is the period between when the
preparatory work has to begin in a Department, in order to deliver
the change in a timely fashion, and when the Royal Assent can
be got. Now when the Bill was going through the House with the
child support reforms, which is the only use of this power to
date, we did not know when Royal Assent would be. We hoped it
would be in summer. We had to plan for the potential that it would
be now, in October or November. Now when evidence was taken from
officials about this, those periods were the ones we were talking
about, and that only. Without Section 82 powers we would have
seen a delay of four months until the preparatory work that we
could do—to contract with our primary supplier, Affinity,
to completely give us a new child support computer system to support
the changes to the child support calculations and regimes -we
would have had to put that off four months at best if we had got
Royal Assent in summer, but up to eight months if we had only
got Royal Assent in October. This would have meant we could not,
within the spirit of the 1932 Concordat, do any work, begin to
train our staff, any of the work that we have to do to cleanse
the data which is on the old computer, so that we can put it on
to the new computer in a better way. Without Section 82 and staying
within the spirit of the Concordat, which we absolutely want to
do as a Department, that would have delayed the implementation
of the child support reforms if we had got a summer Royal Assent,
which we did, by four months. If we had been unable to get a summer
Royal Assent, (we only made it by one day), it would have been
eight months. We have announced that the child support reforms
are going to be put in effect from April 2002. The computer which
we are talking about for this expenditure will be available at
the end of December 2001 for us to start migrating the data over
in preparing for April. With that delay of four to eight months,
the actual implementation of child support reform would have been
put off by the same period. Now when one thinks that the Green
Paper on child support reform[1]
was actually published in 1998, we are talking then about a six-
to seven-year period before you can get through an entire change
in Government policy with primary legislation and then put the
actual changes into place operationally. Clearly this Committee
has to think about that. We have to think about the balance between
getting legislation on to the statute book and then being able
to put it into effect. People want the child support reforms put
into effect. They have been enacted. Even with Section 82 powers,
there is an issue about enacting legislation and then operationally
in complex areas being unable to put this it into effect for years
afterwards.
Mrs Fitzsimons: I was just going to further
that. I understand that absolutely, but the Chair of the Public
Accounts Committee is arguing that there is an implication that
there was a previous ability to scrutinise expenditure that now
does not exist. What you are explaining is that this is not the
case because of Section 82.
Sir Paul Beresford
17. May I add to that. Minister, you have given
a very nice answer but it was not an answer to the question asked.
The question was asked: do you accept that there has been a diminution
in the effectiveness of Parliamentary scrutiny of expenditure?
You have explained why you did it, not to answer the question.
(Angela Eagle) I do not accept there has been a diminution.
As I said earlier, Section 82 does allow more of a focus on any
expenditure that might happen ahead of Royal Assent. Clearly there
is a danger that if the bill was not enacted, for that period
of time, any expenditure spent then would be nugatory. Clearly,
if one takes a very, very strict view of what Parliamentary scrutiny
is about—not a penny of money should be spent at all ahead
of Royal Assent—then you could, if that is your interpretation,
say it is a diminution. I am saying Section 82 does give Parliament
enough powers and enables us to be as transparent and open as
we possibly can be at the time about what we are going to be spending
this money on in this period. I do not regard that as a diminution.
It is matter of opinion. Clearly people have their own opinions.
Chairman: Before I ask David Drew to come in
with the next question, can I suggest to Mr Judge, Head of Departmental
Finance and Planning, that if he wants to come in at any time,
obviously we are very happy that he should do so. The Minister
is batting a very fierce attack and responding very positively.
David.
Mr Drew
18. I understand this question of special pleading
on behalf of the DSS, and that it would not in any way diminish
the power that you put forward, Minister, but it is not beyond
the rhyme and reason of the Home Office to come forward with a
similar argument in terms of asylum and immigration computer mechanisms;
whilst the Treasury, I am sure, would find every reason to say
that their latest computer ideas need special enforcement for
the different ways which they might need to bring forward a business
case. Now we know what the Chairman of the Public Accounts Committee
has said so far, and no more. Are you happy that this is not something
that any other Department could, in due course and at the time,
argue very forcefully that they need a Section 82 in place as
well?
(Angela Eagle) I cannot speak for any other Department.
We made the case for the DSS and I have made the case because
of the structure of the DSS: the fact that a lot of our work services
are dependent on primary legislation, which gets us into the Concordat
area, the complexity of trying to modernise old computer systems.
I suppose I would say that each case, any potential future case
ought to be looked at on its merits, but it is not for me to speak
for other Government Departments about what they may or may not
be planning to do, or may argue in the future. But, yes, it is
possible for any Department to argue that Section 82 type powers
ought to be available to it and it is then possible for Parliament
to take a view on that.
19. Could I ask you, has any other department
got a concordat that they could refer back to and see this as
a natural sequitur?
(Angela Eagle) The PAC concordat applies across all
departments to all Government expenditure and is between the Treasury
and the Public Accounts Committee, so it applies across the board.
1 Note by witness: The Green Paper on child
support reform, Children First: A New Approach to Child Support,
(Cm 3992) was published in July 1998. Back
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