Select Committee on Public Accounts Minutes of Evidence

Examination of Witnesses (Questions 20-39)



  20. The Department did not turnaround and say you had broken the rules?
  (Mr Hall) Not as far as I am aware.

  21. As far as you were concerned these deferred payments, the late payments to creditors as far as you were concerned the Department were not giving you any advice during all of this, they were not saying, "Hang on a moment, something is going wrong here, you are getting things built and things done but there are some rules, you are a public body and it would help to stay within the rules".
  (Mr Hall) What the Department did was to question and query the action that we had taken on occasions. Quite frankly the Department expressed its concerns. From the Corporation's point of view we were satisfied that satisfactory explanations had been given to those questions and matters were resolved. That is why we continued in the way that we continued as part of our regeneration.

  22. Mistakes were made. Can I refer you to page 25 of the Comptroller and Auditor General's Report, you will see in Case D, the case of the Ukrainian Training Ship, a tall ship kept in a port, the crew were paid for 27 months. Is this what public money should be spent on?
  (Mr Hall) In this particular instance it was the Corporation's view, which I obviously share, that this money should have been spent. The reason is, if you take a parallel, the bringing into Hartlepool of the Trincomalee, that was a major restoration of a vessel, costing some £10 million, that became a fundamental part of the regeneration of the area. We were consistently looking to build a tall ship centre. In fact we were undertaking repairs of tall ships to prove we had the labour in the area. The Tovarisch became available and became a great focal point, not only for the potential of Middlesbrough Dock but also a focal point for Lottery funding, which unfortunately failed. In hindsight the situation is, would you have done it because you failed in the end. I have to put it to you, Chairman, that the view would be that we had to try, and try properly. I think the view of the Corporation is that we tried properly and reasonably.

  23. Do you think a lot of the problems that you are now meeting, for instance in the hearing today, are due to your attitude, which some consider to be high-handed and arrogant, particularly with local councillors, and local people generally, that you felt you were doing a good job and you were entitled to cut a few corners to get that job done?
  (Mr Hall) I think so far as peoples' views of myself on a personal level are concerned I think they are matters for themselves, people can make their own judgment, some people like you and some people do not like you. I do not think it was a situation of cutting corners as far as we were concerned, it was a situation of stimulating and continuing to stimulate the regeneration of Teesside in what everyone is collectively admitting was a very, very difficult area, suffering some 25 per cent unemployment.

  24. Can you tell us a bit about other Corporations, were they capable of achieving an orderly wind up?
  (Sir Richard Mottram) They were generally. The Public Accounts Committee published a Report and we incorporated the lessons of that Report in our guidance and other Corporations were successfully wound up.

Mr Steinberg

  25. Mr Hall you said just a moment ago, "the view of the Corporation". If you turn to page 22, paragraph 28, it does not seem to me that the Corporation have much of a view, to be quite honest, because you managed the TDC as a one-man-band, you were a law onto yourself. They did not have a view. Occasion after occasion you were involved personally in handling controversial property deals, were you not? Why have you put yourself into this compromising situation?
  (Mr Hall) There are a number of points that you made there. I frankly do not see it as a compromising situation. I did not envisage it at the time as being controversial. The whole of my background was in property negotiations, having been the Chief Executive for 10 years before in Corby.

  26. Did you run Corby like the Teesside Development Corporation?
  (Mr Hall) I did not run Corby and I did not run the Teesside Development Corporation. I was the Accounting Officer and the Chief Executive of those organisations.

  27. Were the Board so useless that you could not put the information to them? It clearly states on page 22, "All but one of the 24 disposals completed by the Corporation were by negotiated sale. The Corporation's Chief Executive conducted sales negotiations personally, considered and accepted all deals on behalf of the Corporation and, where appropriate, reported," that was good of you, "and recommend their acceptance to the Board". The Board themselves were not doing much, were they? Were they that useless that you could not give them the information?
  (Mr Hall) I do not think it is appropriate for me to say any more than I think the Board of the Corporation was of the highest quality.

  28. Then why did you not consult them?
  (Mr Hall) I find it difficult to interpret the statement there as being I was not consulting them.

  29. Did they make decisions?
  (Mr Hall) Of course they made decisions.

  30. It does not say that here. It says here, "All but one of the 24 disposals completed by the Corporation were by negotiated sale. The Corporation Chief Executive conducted sales negotiations personally, considered and accepted all the deals on behalf of the Corporation".
  (Mr Hall) The prerequisite of that statement is I would be referring to the Board of the Corporation. In relation to negotiations for the sale or purchase of a piece of land that decision does not rest with me, it quite properly rests with the Board of the Corporation.

  31. When you took it to the Board for their decision presumably you would take your Finance Director along with you, did you?
  (Mr Hall) No, I did not. It is well stated in this Report that the Board of the Corporation.

  32. You did not think it was necessary to take along the expert in finance to a Board meeting to give them the briefings that you presumably had, you did not think that it was necessary for the Board to have that information?
  (Mr Hall) At the outset the Board decided that the relationship—

  33. There is an expression about mushroom, Mr Hall, I expect you have heard it!
  (Mr Hall) I think the situation to respond to is that the Board decided, and the Department was well aware of it from inception, that the Corporation ran with the Chief Executive only with the Board members. The reports which were necessary to go to the Board were written by a variety of staff, not only myself, and they went to the Board with best advice. If I can just come back to the sale of properties, if I may, it should be, I believe, taken for granted from this meeting that the Corporation had a duty and responsibility to obtain valuation certificates in terms of all of the negotiations that took place. To suggest, if I may say, from this Report that I simply negotiated and accepted the deals on behalf of the Corporation without the following situation, which is that, yes, I negotiated, yes, I took the lead and, yes, I saw it as a fundamental part of my job in the Corporation.

  34. If that is the case then the Board must have been pretty pathetic. If you look at Cases A and B on page 16, for example, that clearly shows to me if you had given information to the Board and they agreed to these particular cases they were, as I suspected, not very able. How can you justify paying £1.6 million additional costs to two developers even though no development had taken place? On another case, why do you think it is okay to sell the same site twice, which then cost the taxpayer nearly £1 million in compensation. If are you saying the Board agreed that after being given the relevant advice by your Finance Director, who was not at the meeting in the first place to give that advice, it does not give great confidence in the Board, does it?
  (Mr Hall) I can only repeat the confidence that I believe the Board should enjoy and the Corporation should enjoy. If I can take and recall the various points which you have raised. I think the question of these two cases, perhaps, should be also put in the context of the £116 million—

  35. It should not be put in any context, Mr Hall, the fact of the matter is you paid out £1.6 million in an additional costs to the developers out of public money and regardless of how successful they were that is irrelevant, the fact of the matter was that you squandered £1.6 million of taxpayers' money and that is just not acceptable.
  (Mr Hall) My response to you, again, in those circumstances is that in any business, and I consider in part the Corporation to be a business, the situation arises that on occasion some of the negotiations you can prove work, and some of them do not. I think that the important thing is that in the vast majority of cases the Corporation succeeded in its negotiations and, indeed, the capital receipts received by the Corporation were fundamental to the regeneration of the area. I do not see the situation as wantonly squandering of the position. It is unfortunate, I accept that in hindsight, I obviously accept that in hindsight, that the obstacles in the way of these—

  36. It is more than unfortunate, Mr Hall, why did you ignore warnings and the cautions given to you by the DETR?
  (Mr Hall) I am not sure that—

  37. The Report makes it quite clear to us that the Department were warning you, they were cautioning you, they were saying that you better look at what you were doing and you totally ignored it, you just went on your own way.
  (Mr Hall) I have to say so far as the Corporation is concerned when the Department expressed its concerns on any matters which the Corporation was involved with it responded to those concerns. I do not believe that the Corporation simply ignored either the rules or the advice that it was receiving.

  38. If do you not think that turn to page 33, if you would, please, paragraph 4.2, 4.3 and Figure 11, were you aware of the Development Corporation Guide rules and your responsibility as the Accounting Officer?
  (Mr Hall) Yes.

  39. Did you also read the July 1997 Treasury Guidance to Accounting Officers, which lists seven of the keys rules to govern your actions, which is on Figure 11?
  (Mr Hall) I am aware of the actions outlined in the Treasury Guidelines.

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