Examination of Witness (Questions 160
- 179)
MONDAY 24 JUNE 2002
SIR HAYDEN
PHILLIPS GCB
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.
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