Select Committee on Public Accounts Minutes of Evidence

Examination of Witnesses (Questions 20 - 39)



  20. I am sure all Members of the Committee will welcome that. Were you not a bit late in the field when adopting such methods?
  (Dr Perry) Clearly it would have been better if this system had come in two or three years earlier, or even before that. All I can say in explanation of what was happening in the early 1990s is that a lot of systems were changing and while that certainly does not condone or exonerate sloppiness, and there was some sloppiness in the regulatory procedure, it was a system that was in evolution at the time and has evolved further since.

  21. You referred to the early 1990s, let us come a bit more up to date. There is considerable criticism in the report of the failure of the Corporation to allow the National Audit Office faster access to Focus. What was the reason for that delay? Six months I think it was put at.
  (Dr Perry) The actual delay in granting access was four months and then there were two months needed for discussions to set up the meeting and the visit. I think it is fair to say that at the time the request came from the NAO in September 1997 it caused a fair amount of surprise because a year earlier the Corporation had been told that the NAO's investigation would not require access. In that intervening time the NAO had been given access, as indeed it is entitled to have access, to all the papers and documents which were owned by the Corporation, whether at headquarters or in the regional office.

  22. That has not answered my question. When the NAO were asked for access, why did you not say "yes" immediately?
  (Dr Perry) Oh, for a number of reasons. Firstly, as I say, there was an element of surprise because the request had not been expected. Secondly, there was an offer that was made immediately to the NAO to provide any information that would be required given that a huge amount of information had gone already. My predecessor also felt that it was necessary to consult the department because, as the Chairman noted, there is not an automatic right of access to RSLs and, as an NDPB, the Corporation felt it necessary to go and ask the department.

  23. Were you not a bit embarrassed in 1997 that this request was being made when assurances had been given to this Committee in 1994 that prompt action against fraud and irregularities was being undertaken but that was at the same time that this corruption was going unchecked?
  (Dr Perry) The prompt action was taken after the fraud was discovered by Mr Clark and reported to the Corporation. Within two or three weeks the police had been asked to investigate, formal regulatory action was being taken, and a number of independent investigations had been launched. I think the NAO report does say that action was very vigorous once the fraud was discovered. That, of course, was about a year and a half before the request for access was made.

  24. Just explain to the Committee why it took six months to ensure access to the NAO in 1997?
  (Dr Perry) I certainly would not want to defend the length of time it took. I very much hope that if the circumstances arose again these things would be sorted out much more quickly than they were. It was a combination of circumstances. The presumption when the NAO ask for access is that it will be granted but in this particular instance there was a criminal investigation, the police were still on the premises at Focus, a large number of independent investigations had been held and there was a genuine belief in the Corporation at the time that the Corporation itself could provide any information which the NAO required.

  25. I am also concerned that the Valuation Office Agency refused to disclose information to the Corporation that might have helped. I really think that we require an explanation from the Treasury of whether co-operation is now granted more readily. I think we all appreciate the need to ensure confidentiality in taxpayers' affairs but not in the affairs of fraudsters or potential fraudsters.
  (Mr Hull) I have checked with the Valuation Office what their policy is on disclosure of information and they have verified that what the report states was their policy at the time and is their current policy. The reasons are the need to ensure the collection of tax and also privacy to the individual. It is recognised across Government that there are conflicts between issues like this where there is a need to collect information for fraud investigation and another need to protect the privacy of the individual. The Performance Innovation Unit of the Cabinet Office has just begun to undertake a study of privacy and data sharing which is expected to report in the spring of next year. I have drawn this particular report to the attention of the Secretariat and invited them to use it as a case study.

  26. To either Mr Clark or Dr Perry, we know what has happened to the people who have been convicted, I am trying to look at what happened to some of the people whose actions seem to have cost the Association considerable sums. The architect who certified the repairs in figure 3, what is that architect doing now?
  (Mr Clark) I believe he is no longer in practice.

  27. No longer in practice. Is that because of action taken by his or her professional association?
  (Mr Clark) I cannot say that for certain, I think it is possible.

  28. The valuer who was declared bankrupt?
  (Mr Clark) I have no knowledge of his current activities. The decision to cease legal action was taken over two years ago and I have no current knowledge.

  29. Could he be working for another housing association?
  (Mr Clark) I think it is highly unlikely, but I cannot be absolutely certain.

  30. Can you give us any guarantee, Dr Perry?
  (Dr Perry) No, Mr Griffiths, I have no knowledge of that particular instance. Whilst the Corporation does have powers to disqualify people from being on the boards of management of the housing associations, we do not have the same powers with regard to employees or consultants[1].

  31. Do you know who the valuer is?
  (Dr Perry) I do not.

  32. Do you not think it would be helpful to other associations to know who that valuer is and also to circulate them saying "beware of this valuer"?
  (Dr Perry) I think we would need to be very careful. The West Midlands Police carried out a very wide ranging investigation into this matter. They brought charges against three people and considered, I believe, but did not bring charges against a number of others. I think it would be slightly dangerous for either me or a body which I represent to make assertions in public about people against whom no charges have been brought, however difficult we think the circumstances might be.

  33. Was criminal action considered against this person? I know action was not taken because he was bankrupt, but was criminal action considered?
  (Mr Clark) The police looked at all of our papers and were examining everybody who was involved in the matter to see whether or not criminal proceedings could be undertaken and they decided not to.

  34. The architect in question who you said you believed is no longer practising, do you know that architect's name, Dr Perry?
  (Dr Perry) No, I do not.

  35. So there has been no circulation to housing associations saying "beware"?
  (Dr Perry) None that I am aware of.

  36. Do you think that is to be regretted?
  (Dr Perry) I repeat that it is very difficult territory. Where people have been prosecuted or where formal disciplinary action has been taken against them then there are ways of publicising that.

  37. I think we were told, were we not, that formal disciplinary action had probably been taken against this person?
  (Mr Clark) No. We ceased to use the architect obviously, but we also considered legal action and decided not to take it on the grounds that he was no longer practising. That is not the same as a formal disciplinary. There was nothing criminal or civil on the record against him.

  38. You believe he is not practising?
  (Mr Clark) That is right.

  39. You do not know whether he has been struck off?
  (Mr Clark) No, I do not.

1   Note by Witness: The Corporation can remove from office any board member or employee responsible for mismanagement or misconduct, following a statutory inquiry, under Schedule 1 to the Housing Act 1996. Board members so removed are thereafter disqualified from being on the board of another RSL. Employees so removed however are not disqualified from working for another RSL. Back

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 9 July 2001