Select Committee on Public Accounts Minutes of Evidence

Examination of Witness (Questions 160 - 179)



  160. You said the contract was originally worth £183 million and it has now gone up to around £300 million. What is that £183 or £300 million? Is it the total of the cash payments which would be made under the contract or is it, as is the case with many of these PFI projects when a value is ascribed to them, the net present value of the contract?
  (Sir Hayden Phillips) It is a series of cash payment for the delivery of services over a defined period.

  161. Over a period of how many years?
  (Sir Hayden Phillips) At the moment it is over a period of 12 years.

  162. Is that a lump payment each year for 12 years?
  (Sir Hayden Phillips) The structure of the payments at the moment, as the services come on stream, is that the level of payments rises to meet the level of services which have been contracted for.

  163. How much has been paid already to the contractor?
  (Sir Hayden Phillips) Something of the order of £8.5 million.

  164. It says in the press that ICL will get half the value of the contract because of the supply of PCs and Microsoft Office. Is that correct?
  (Sir Hayden Phillips) We are still discussing with the contractor what the future contract they are being asked to deliver should be.

  165. What did it originally say? How many PCs and how many copies of Microsoft Office were originally to be delivered. Let us take the revised 2000 contract, never mind the 1998 one.
  (Sir Hayden Phillips) I do not know off hand the precise number of PCs which were to be delivered. The total electronic system was to be delivered.

  166. Would you write to the Committee saying what the original contract stated in terms of chapter and verse, numbers of PCs, numbers of copies of Microsoft Office what that changed to, how much has been paid so far, how much you expect to have to pay under any circumstances?
  (Sir Hayden Phillips) Yes; absolutely. I committed myself to the Chairman to do this in a fortnight.[14]

  167. Like the Chairman, I was struck by Appendix 2 where it says in paragraph 2, "In September 1994 the Department's Internal Assurance Division reported on the adequacy and effectiveness of controls in enforcement systems in 14 courts. It concluded that there was an unsatisfactory standard of control over enforcement processes and that it was unable to offer assurance that fine enforcement was working effectively". That was in 1994. We read in paragraph 2.22 on page 19 that there was a project as part of the Government's crime reduction programme launched in 1999, after you had become Permanent Secretary, which commissioned research to examine the enforcement of financial penalties. "The aim of this project, which is due to be completed in early 2002, is to identify best practice in enforcement strategies through a study of individual courts' approach to enforcement and identify the relative effectiveness and cost-effectiveness of different enforcement strategies". If this failure was identified in 1994, that basically one was unable to offer an assurance that fine enforcement was working effectively, why did it take five years to come up with the idea of having a research project to study the enforcement of financial penalties?
  (Sir Hayden Phillips) There are two or three basic reasons for that. The first is that it was very difficult to give very much priority to this work amidst the range of other work that magistrates' courts were doing. There was a lack of resources for them to be able to do more. While some improvements were made it continued to remain a very intractable problem. Partly because of the difficulties of enforcement, partly because of the ease with which people move and the difficulty in finding addresses generally and genuinely people in the magistrates' courts found this extraordinarily difficult to get to grips with. We also had divided responsibility at that stage and indeed right up until last year it was the police who were responsible for warrant execution not the courts themselves. So no-one was in a position to look at the total system and say this is how we want to improve it. Those are the basic reasons why. I am not pretending that is a good story.

  168. Has this project completed now?
  (Sir Hayden Phillips) The results of the research project are going to be published later in the year.

  169. Why does it take three years to do a research project on the enforcement of financial penalties? It is not rocket science, is it?
  (Sir Hayden Phillips) They did 18 pilot projects during that time and they wanted to evaluate them right across the country

  170. Do you mean they did them consecutively?
  (Sir Hayden Phillips) No, several of them were running at the same time.

  171. Why did it take three years and it is still not published?
  (Sir Hayden Phillips) The reason is that it was intended that this should be a very thorough piece of work.

  172. The NAO does extremely thorough pieces of work. These reports on average cost £180,000, but they usually, on average, take 12 months and sometimes quite a lot less than that. Why did this take three years and is still not finished?
  (Sir Hayden Phillips) I do not know the answer to that question but I will find out why it has taken so long. That is the position. The results are that we now have best practice guidance about making initial decisions more effective.[15]

  173. I should hope you do. I wrote down when you answered this point earlier. You said you have regional conferences, you are sharing best practice, you have performance targets, all the sorts of things which one would hope you as the executive head of this Department would be encouraging. I must admit that when you said you were sharing this information with Work and Pensions and that you have £465,000 so far, money which would otherwise not have been collected, I thought that sounded good until I looked back at the report and saw that the amount which is imposed every year is £385 million and collections are £242 million, leaving a deficit each year of £143 million. I know a bit of it is carried over, but £465,000 on £143 million does not really sound nearly as impressive, even if it is washing its own face. It is not a lot of money, is it?
  (Sir Hayden Phillips) It is not a lot of money. We are, however, working in this area at trying to tackle getting fines back from those people who are the most difficult to trace, who are the most persistent at avoiding being caught and a small gain in this area is of considerable advantage in demonstrating to the system that if you have information about where people are, you can do something about it.

  174. May I go back to Mr Field's point about people being difficult to trace? Do you, and if you have not done hitherto are you going to, start listening to information you get given about where people are? I find the same problem in surgery cases with child support. They know where the people are but when they tell the Agency, the system ignores it. Are you going to listen to people like Mr Field's constituent when they say where the person who is not paying lives?
  (Sir Hayden Phillips) Yes.

  175. Why have you not been hitherto?
  (Sir Hayden Phillips) I am not suggesting that people have not been doing that locally. I was taking the case that Mr Field raised as one which we should pursue to see why it was that the court felt—and they clearly felt—they could not use that information to enforce it. They may feel under some obligation that I am not aware of that they should get information from other sources in other ways. It seems to me on the face of it that if they want to check that out, it can be checked out if they feel it cannot be taken at face value.

  176. May I draw your attention to paragraph 2.18 on page 18? It says, "None of the five courts we visited, for example, had systematic arrangements in place to obtain offenders' national insurance numbers or verify their addresses". Could you say why not?
  (Sir Hayden Phillips) Because they had not put these arrangements into place.

  177. A systematic arrangement for obtaining national insurance numbers or for verifying addresses is not rocket science. It is a fairly straightforward piece of administration, is it not?
  (Sir Hayden Phillips) I imagine because of the amount of work involved, in some cases people have felt it was not necessary. It is quite clear that what you should do is get reliable information right at the start, up-to-date contact details, information of that sort. You would need legislation to require people to give that information and including their national insurance numbers, but our guidance is that best practice indicates that what you are describing should happen.

  178. In paragraph 2.20 it says, "Magistrates' courts take enforcement action in around two thirds of all cases. There is no standard enforcement procedure". It would not be difficult to have a standard enforcement procedure, would it?
  (Sir Hayden Phillips) No, but it might not be right.

  179. Do you mean the standard enforcement procedure which was chosen might not be the right one or that it might be wrong to have one at all?
  (Sir Hayden Phillips) It might be wrong to have exactly the same process in every part of the country. The responsibility for the enforcement rests locally with magistrates' courts committees. They must make decisions about what they think the right approach in their area is. Our role has to be to give guidance about best practice and so on. If we had a national system of enforcement, then a standard approach is one which we would be willing to look at.

14   Ev 34-39 Back

15   Ev 32 Back

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