Examination of Witnesses (Questions 200-203)
MONDAY 30 APRIL 2001
MR KEVIN
TEBBIT, CMG AND
MR IAN
ANDREWS, CBE
200. The Chairman earlier highlighted your own
words about the value of working with the NAO. Can I simply suggest
there should be a similar exercise with the NAO conducted by the
Department as you move into prime accounting to highlight the
risks and dangers as you have got here in 9b for the new system.
(Mr Tebbit) Very happy to do so.
201. And to try and sort these sorts of problems
out before they arise.
(Mr Tebbit) Very happy to do so and, if I may say
so, we have already had a discussion with the NAO and explicitly
agreed with them that they will also have access to all this information
as we go along to help us both in this process because I do repeat
we are leading the way in the public sector, certainly in big
departments, in doing this and it is important for us all to get
it right. Thank you for that.
(Mr Andrews) Can I confirm we have consulted the NAO
as part of the design process of prime contracting. I think I
would make one key point. As the report acknowledges, many existing
property managers are not professionally qualified and the model
which was put in place ten years or so ago relied on that expertise
coming from a contractor. The whole point about prime contracting
is that the Department will be an intelligent customer and will
have a much more proactive relationship with its prime contractor
and the supply chain. It is culturally a fundamentally different
way of working and that will bring challenges for us and it will
bring challenges for industry. It is not simply amending the model
we have to date, it is about putting in place a fundamentally
different way of doing things.
Mr Williams
202. Treasury, as Mr Tebbit has implied, virtually
all departments have a property management function though not
necessarily on anything like the scale of MoD. In so far as they
are leading the way, how far are you ensuring that the lessons
that have been learned from their present course of action have
been disseminated to other departments? Do you think the other
departments could benefit from the application of a risk modelling
technique?
(Mr Glicksman) I think very much so, Chairman. In
fact, we have started on that process. The Annual Fraud Report
that we produced, the one we put out a couple of months ago, included
an appendix written for us by the NAO on the risk model that they
had drawn up for this study. In addition, we have got plans which
we have been discussing with the NAO and the Ministry of Defence
to run a seminar later this year for all Government Departments
which will actually go into the lessons that were learned through
this report and ways in which the Ministry of Defence are dealing
with these so that all Departments can take advantage from that.
203. Thank you very much. Thank you, gentlemen.
Can I say Mr Gardiner's suggestion that we should consider more
reports 18 months after they have initially been prepared does
not endear itself to me in that we have enough trouble getting
witnesses before us who are relevant to the time of the particular
report. Sir John, you want to make a comment?
(Sir John Bourn) Yes, thank you. First
of all to confirm that I will, with the Ministry of Defence, carry
out the exercise suggested by Mr Gardiner. Secondly, reference
was made to the reference at paragraph 3.59 as to whether there
were any examples of subcontractors failing to pass on discounts
received. In our work we did find an example of this in a wiring
installation in Metropole Buildings in Northumberland Avenue.
In this case a discount had been received but had not been passed
on. It was on the basis of that example that we discussed the
issue with the Department and the wording in paragraph 3.59 derived
from that. A final point to make, the report that we published
was, of course, published in May 12 months ago. Thank you.
Mr Williams: Thank you, gentlemen, it has been
a very positive meeting. Thank you.
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