Select Committee on Public Accounts Minutes of Evidence

Examination of Witnesses (Questions 200-203)



  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.

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2001
Prepared 12 September 2001