Oral evidence

Taken before the Home Affairs Committee on Tuesday 15 July 2003

Members present:

Mr John Denham, in the Chair
Mr James Clappison
Mrs Janet Dean
Mr Gwyn Prosser
Bob Russell
Miss Ann Widdecombe
David Winnick

__________

Witnesses: MR JOHN GIEVE CB, Permanent Under-Secretary of State; MR MARTIN NAREY, Commissioner for Correctional Services and Permanent Secretary, Human Resources; and MR WILLIAM NYE, Director of Performance and Finance; Home Office, examined.

Q1  Chairman: Good morning. As you may have gathered, I have recently become Chair of the Select Committee, so welcome this morning. Perhaps you would like to introduce yourself and your colleagues for the Committee?

Mr Gieve: I am Permanent Secretary of the Home Office; Martin Narey is now Commissioner for Correctional Services and Permanent Secretary in charge of Human Resources; and William Nye is our Principal Finance Officer.

Q2  Chairman: We are grateful to you for the annual report which we are discussing today and also for the further information that you have submitted in response to earlier questions from the Committee. This is very much a session about the Home Office's performance over the year in question, but I wonder if I could start by asking you a question that seems to be quite immediate today which concerns the reports today that the Home Office's new building in Marsham Street is going to be far too small for the number of people who work for the Home Office, and whether those reports are true.

Mr Gieve: The Home Office building will take, we think, all the people in the core Home Office headquarters but will not be enough to take also the headquarters of the Prison Service and the Probation Service, so that is true. Originally the feeling was that the numbers in the Home Office would decline between the commissioning of the building and the arrival of the building - in fact, they have gone up - so that bit of the report by the National Audit Office is absolutely right.

Q3  Chairman: When did that become apparent?

Mr Gieve: It has been apparent for the last two years.

Q4  Chairman: I see. Can I ask about your PSA targets? You had eight PSA targets in 1998. How does the Home Office's performance against its targets compare with that of other government departments?

Mr Gieve: I have seen a league table and I think we are in a respectable position in it. As you know, many of the targets run over a number of years so we are not yet in a position to say whether we have hit them or not. I think of the four targets where the due dates have passed from the original comprehensive spending review we have hit three. The fourth was a target for getting a percentage of final asylum decisions within six months and we did not hit that in the due date although we continue to have a target, and we are improving on that front now.

Q5  Chairman: How good a measure of the Home Office's performance would you say the targets are?

Mr Gieve: I would say they are a very important measure. Probably of all the departments that I know the Home Office targets focus on outcomes rather than processes and outputs and in the areas of crime, the fear of crime, criminal justice, harm from drugs, escapes and the rate of re-offending, I think they are the right targets and the right measures by which we should be judged. They are not comprehensive - for example, we have not got a target on terrorism - but clearly it is an important function of the Home Office to maintain our defences against terrorism. So there are a number of things which the Home Office has to do, continue to do and to do well which are not captured in the targets but I think as a measure of the areas where the Government and the Department most want to see improvements, our targets are pretty good.

Q6  Chairman: You appear to have a number, according to the most recent advice we have had from the Home Office, like improvement in the level of public confidence in the criminal justice system or the target for the proportion of asylum applications to be decided at a particular time, or the measurement of the improvement of police forces, which have yet to be resolved as targets. Do you know when those targets will be set?

Mr Gieve: Yes. For the ones which have not been set yet or have not been fully defined yet I think we publish the target and then there is a technical note which sets out exactly how it will be measured, on which statistical series and so on. We are hoping in the next few days, before Parliament rises, to issue the technical notes on confidence and I think one of the others --

Mr Nye: The joint target for value of money in the criminal justice system.

Mr Gieve: That leaves two which we have not yet published - one is the definition of frontline policing which is a subsidiary target to increase the proportion of resources going into the front line and we are hoping to do that in the early autumn, and we also have a target which talks about the performance gap between the worst and the best, and so far we have got an "X" in there to say we will narrow it by X per cent and we are going to define "X" again in the autumn when we have our first comparative two years' data on police performance.

Q7  Chairman: What is the value to the public of targets that the year after the spending review have not been defined?

Mr Gieve: First of all, the spending review runs from this April for three years and many of the targets run beyond then so we are a bit late in setting these targets; we would have liked to have done it earlier but we are not so far behind the game. Secondly, as I say, to narrow the gap in performance, for example, between the worst performing police forces and the best is a valid target. We have said we want to do it and we are setting in place, as you know very well, a quite sophisticated mechanism for measuring performance. Now the department has been working on how we narrow the gap since the target was set. The fact we have not yet got the statistical series precisely defined does not mean no work has been done and on that one, as you know, a huge amount of work has been done.

Q8  Chairman: The Prime Minister recently made a speech in which he seemed to suggest that there would be less focus and less emphasis on targets in the future and public sector delivery than in the past. Has that message been communicated to the Home Office?

Mr Gieve: No, in the sense that I went to a meeting with the Prime Minister and other ministers and it was made very clear that what we were talking about was, if you like, delivery plus rather than a switch, so we have got to hit our targets but I think the emphasis we have been given is that merely improving performance is not enough and targets are not enough, so no one has suggested that we can slacken off - attractive though in some ways that would be.

Q9  Chairman: So you are not expecting to have less targets to report to us in a year's time?

Mr Gieve: In a year's time we should have completed the next spending review, and I expect there may well be less targets. We have ten PSA targets at the moment and there may be a few less, but I expect that targets in the areas of reducing crime and the fear of crime, improving the performance of the criminal justice system, reducing the harm from drugs, improving our performance on immigration and asylum, will still be there - and rightly so.

Q10  Chairman: Finally, you have told the Committee that the details of the confidence in the criminal justice system measurement target will be published, you hope, before the House rises. Targets are meant to be SMART - specific, measurable, achievable, relevant and timed. Are you confident that the technical definition you publish will meet that criteria? If so, how?

Mr Gieve: Yes, I am. Broadly speaking, we are going to measure it by surveys of people's confidence in the criminal justice system. As you know, the British crime survey has for a number of years included questions on how people think the criminal justice system is performing and that will give us something which is measurable, specific, timed and relevant. The question of "achievable" is the most difficult one because obviously people's attitude to the criminal justice system, just like to government in general, is affected by many things other than what the Home Office does, or in this case the three criminal justice departments, but we think we can influence it in a number of ways by improving the treatment of people who come into contact with the criminal justice system as witnesses or victims because that, we know, influences how people view the system as a whole, by improving the actual performance and telling people about it. We have not tried to do this systematically before and we hope that will have an effect.

Q11  Mrs Dean: The expenditure tables in the departmental report suggest that the growth of your resource budget will be significantly slower between 2002-3 and 2005-6 than it was between 1999-2000 and 2002-3. Are you confident the Home Office will be able to keep spending to the amounts in the table?

Mr Gieve: You are right that the rate of growth will be slower and was expected to be slower. The tables are a bit complex in that some of the years include transfers into the Home Office which other years do not and William will say something about that. On your broad question of can we stick within these budgets, the one point I would make on that is that, as the report notes, we are still in negotiations with the Treasury about our budget for this year and future years for asylum and immigration, so those may change the numbers. Also, as you know, there is a reserve which, depending on events, we may or may not get access to.

Mr Nye: In addition to the point about asylum and immigration, we also anticipate receiving transfers from the Office of the Deputy Prime Minister and the National Assembly of Wales in 2004-5 and 2005-6 in respect of an element of the total police fund settlement. This happens on an annual basis so we have had those equivalent transfers in the past years and also in 2003-4, but not 2004-5 and 2005-6, so if we were able to take account of those in the tables which we cannot at this stage then it would show a slightly higher growth rate.

Q12  Mrs Dean: So the tables are distorted because of transfers in that have taken place in previous years but are not shown yet?

Mr Nye: I would not say distorted but the tables necessarily show the position of the Home Office as a snapshot at a moment in time, the moment in time being the point when this was published effectively at the same time as the budget and the main estimates. They show the position we had then but not things we can anticipate either by this year or future years necessarily.

Q13  Mrs Dean: You mention immigration and asylum matters. Why has it taken so long to finalise the budget for those?

Mr Gieve: I think the main answer to that is that we have been changing the policy and our programmes very substantially over the last year and at the time of the last spending review we put in some numbers, as you will see, for that over the period but we knew at that point we had not yet got sufficient grip on how big an influence the new measures introduced in the Bill last autumn were going to have on the intake, particularly of asylum seekers, and therefore the numbers we had to support. The biggest single part of the budget is asylum support costs and we are still discussing what a reasonable profile for that is likely to be.

Q14  Mrs Dean: When are you likely to be able to produce those figures?

Mr Gieve: I hope shortly.

Q15  Chairman: Could you be a little bit more specific?

Mr Gieve: No!

Mr Nye: In terms of formal notification to Parliament we would anticipate bringing something forward in the winter supplementary estimates.

Q16  Mrs Dean: Turning to prisons and probation, spending increased at a rate of 8 per cent per year in the three years up to 2002-3 but your plans are for annual increases of under 5 per cent per year in three years 2005-6. What steps are you going to take to hold back increases in spending?

Mr Narey: The spending on Correctional Services has been pretty generous over this period. It has allowed us to set up the National Probation Service and the Youth Justice Board and across all three services, including the Prison Service, put a considerable investment into things which we believe will work to reduce offending. The increase in spend right across that period is significantly above inflation and has allowed us to start to do things which seem to be delivering the results we want and there is some emerging and encouraging evidence about some of the programmes being used both in probation and in prisons and particularly being used by the YJB which are cutting re-offending.

Q17  Chairman: Just following up one point briefly on immigration and asylum, if the budget is not settled, what figures are the people in the Immigration and Asylum Service working to at the moment? The published figures? Or do they have a different budgeted figure working for which has not yet been agreed?

Mr Nye: While the discussions Mr Gieve has referred to are going on, people in the Immigration and Nationality Department need to work with indicative budgets in order to ensure there is financial control within the organisation. As part of the overall position of management and finances of the department, we authorise them to have indicative budgets to enable them to do that management, which are not precisely the same as the sample that is here but which give a view of what we could manage within the Home Office as a whole on the basis of what we could do about moving money around or reprofiling money to ensure they have budgets that they can work to and live with.

Q18  Bob Russell: Gentlemen, moving to crime and the justice gap, as I understand it the target is to improve the delivery of justice yet the information given in the departmental report shows that, since that target was set from March 1999 to September 2001, it fell, then began to improve, and although there has been a slight increase it does not really fit in with the Home Secretary's view that crime figures were a "disgrace". With that background, how can you make realistic predictions of your future success in meeting the target and bringing more offenders to justice if you cannot explain why the measure has already fallen? Albeit it has stabilised, it is still way below what it was three or four years ago.

Mr Gieve: This was an occasion when we announced a target for increases and the numbers promptly went in the opposite direction, and we have had to put in place measures to reverse that. As with crime as a whole, it is quite difficult to be completely certain about what caused this. There was a decline through the 1990s in experienced police officer numbers: that has kicked up in the last few years and as those new recruits gain experience we think that is one factor which is helping us boost the number of people brought to justice. There was also, at the time that this fell away, a great concentration within the court system on reducing delay, and we think that that also had an influence on the number of cases taken through --

Q19  Bob Russell: You mean the cases never got to court?

Mr Gieve: Yes. We think that in some cases people put their efforts into advancing the cases they could advance. I have not got numbers on this; I am just looking at the fact that delays came down at the same time and there was a lot of emphasis on reducing delays. But why should we be able to reverse this, which is our target, that was the main point of your question.

Q20  Bob Russell: Yes.

Mr Gieve: There are three points, I think. Firstly, at the police end of the process, we have many more police now - record numbers - so that increases the resource going into the investigation of crime at the front end. Secondly, we have set in place a series of particular measures around improving victims and witnesses, improving case preparation by the CPS and police together, we are looking at listing in courts to try and increase the output and we are doing that in a more systematic and coherent way than ever before; and, thirdly, we have put a lot more resources in and from April this year we have in each of the 43 police areas a local criminal justice board bringing together the chief executives from the different criminal justice agencies, and we have asked them to focus on how they can increase the efficiency and effectiveness of the process from charge through to sentence. We have provided staff for each of these boards and we believe, and they believe, that they can increase these numbers.

Q21  Bob Russell: So with all these extra police officers and all the additional support, new systems, etc, etc, when would you expect the figures to get back to where they were in March 1999?

Mr Gieve: Our target is to get to 1.2 million by 2005-6, and I think that means broadly getting back to 1.1 in 2004-5.

Q22  Bob Russell: So it has taken five years to get back to where we were before, with all those extra resources?

Mr Gieve: We will be back at the same level, yes. Of course there have been changes in the mix and number of crimes in that time, so with reduced crime this will be a higher percentage of people brought to justice than in the past.

Q23  Bob Russell: Would you agree, then, that it is not necessarily the resources, as such, it is how those are used, and therefore the way they have been used in recent years has not been put to good effect?

Mr Gieve: I think it is a question of how resources are used, yes, and I would agree that we have not been getting as big a bone for our pup as we should have done, and not just in the last few years. I think practically anyone you speak to in the criminal justice system will say that there are lots of dysfunctional features in the courts - the frequent adjournments, the fact that witnesses have to wait, the fact that there are glitches in that the prosecution often has not got its case ready, or if they have the defence has not, and so on. Those are the practical things we are working on in order to improve the process. Looking a little bit further ahead, and it starts to have an effect in the years I am talking about, we are investing very heavily in IT support for the criminal justice system - that is linking up the case management systems of the police, the prosecutors, the courts and, indeed, the prison and probation. The first part of that will be establishing secure e-mail links between all those agencies and the other people - the barristers and so on who have to deal with the courts, and that will be another way of reducing delay and improving efficiency.

Q24  Bob Russell: So in a year's time we will look forward to improvement?

Mr Gieve: Yes.

Q25  Bob Russell: In written evidence you refer to the "justice gap" in different areas ranging from 12 per cent recorded crimes brought to justice to 45 per cent. Is such a significant disparity indicative of the huge variations in the effectiveness of the criminal justice system, or does it cast doubt upon the validity of the indicator? And how is this huge variation being addressed?

Mr Gieve: There are very different areas, and if you take Staffordshire which has the highest rate or parts of Wales which have a very high rate of bringing crimes to justice and then compare those to some inner city areas like Manchester and London obviously there are different social patterns and hugely different problems, and no one is saying that you can eliminate those. I do not think it does invalidate the target. There are tensions, of course, in the police, for example, between putting effort into good case preparation and bringing people to trial and, for example, reassuring the public and preventing crime as opposed to crime reduction measures, but I think in any system of criminal justice the number of people brought to justice must be a core indicator of success. That is what the justice system is for so I do not think it is a bad measure. Obviously there will continue to be some geographical differences. In some cases, comparing like with like, we can see there are questions and I think that benchmarking between like areas is an important aspect.

Q26  Bob Russell: It is more appropriate?

Mr Gieve: Yes.

Q27  Mr Clappison: On the point you made about bringing offences to justice, that may be true looking at the broad picture but is it more important that certain offences should be brought to justice than others? Is the number of robberies brought to justice, for example, decreasing or increasing?

Mr Gieve: Yes, obviously it is more important. Some crimes are much more important than others, absolutely, and the rate, for example, of bringing people to justice for murder is extremely high, much higher than these numbers, and that is right because police put a lot of resource into that. On robbery I think the rate is increasing but I have not got those figures in front of me.

Q28  Chairman: If you hit the target of 1.2 million, which is the number of crimes for which offenders are brought to justice, what then would be the proportion of crimes that are brought to justice?

Mr Gieve: We have not got a projection of recorded crime to 2005-6 I do not think, but broadly speaking that will be slightly over 20 per cent of recorded crimes and less than that, perhaps 10 per cent, of crimes as calculated on the back of the British crime survey.

Q29  Chairman: Would it be unfair to say that the government's target is that 10 per cent of crimes that take place should be brought to justice?

Mr Gieve: Well, we have set our target, as you know, in terms of an absolute number of offences brought to justice because we think, even if the number of crimes is falling, we can still improve the absolute number so we have not set it as a proportion. One point on that: that number is low and we want it to be higher. Of course, many offenders commit a lot of crimes and so to say that a relatively small proportion of total offences are cleared up and brought to a conviction does not mean that the percentage of offenders that are brought to justice is equally low.

Q30  Mr Prosser: Can you tell us why the Home Office dropped the economic cost of crime as a measurable target?

Mr Gieve: Yes. It was partly what the Chairman was saying earlier - that we wanted to refine down our targets to a relatively small number and the economic cost of crime varies pretty evenly with the total amount of crime - particularly the total amount of economic crime - so we thought it was unnecessary to have both.

Q31  Mr Prosser: And what is your latest estimate of that cost?

Mr Gieve: In round numbers we think the cost of crime is around £60 billion a year, which includes allowances for trauma and so on. We have a graph showing trends in that level but I think we are less confident about the actual pound billion number to put on it. It is broadly £60 billion.

Q32  Mr Prosser: You are planning to review the way you calculate these indicators, but in the meantime would you agree that the cost of crime is rising? The trend is rising?

Mr Gieve: No. I think the cost of crime is falling as is the total level of crime, and has been for some years. If you look at page 16 of our report, our estimates of the economic cost of crime, there has been a blip at the end which I think is more to do with the exceptional decline measured in the 2000 BCS, but if you look at the trend since the mid-90s it has been steadily down and that reflects a general decline in the amount of crime.

Q33  Mr Prosser: And when you update your estimates of the cost of crime, how will you do that? Will you be looking at different sets of data or analysing it differently?

Mr Gieve: We are always working to improve our assessment of the data and in this case what we do is to take an average cost for particular sorts of crime and then multiply it up, so what we are looking at is the typical cost of particular sorts of crime and there is a lot of judgment involved in those estimates.

Q34  Mr Prosser: I want to move now to street crime. According to the table you supplied us with the volume of robbery in some police forces appears to have risen over the period covered by the Street Crime Initiative as compared with the same nine months last year. For instance, in South Yorkshire it is up by as much as 18 per cent. Have you made analysis of why this has occurred, and how would you turn it around?

Mr Gieve: First of all, the figures we published for the ten forces are up until September, the first six months of the Street Crime Initiative, and you are right that some forces started quicker than others. The first point I would like to make is that for South Yorkshire and Merseyside which showed some increases in the first six months we have already turned the picture round and we have seen declines in those areas. We will be publishing our latest crime statistics on Thursday. I cannot tell you what is going to be in them but they will set out the figures up until the end March for all the street crime areas, and I think you will see that the areas which started slower have done better since then.

Q35  Mr Prosser: Finally, how do you react to the criticism that the Street Crime Initiative has drawn resources away from other areas of crime enforcement?

Mr Gieve: I do not think that there is much evidence that that is true and such evidence as I have seen suggests that in the areas where we put more effort into street crime we also saw some reductions in other forms of crime, being crime and burglary, so I do not think there is a simple trade-off at all between this form of policing and others. But even if there is, and any police superintendent will tell you he has only got so many people and he has to decide where to put them and there are trade-offs every day, the rapid increase in street crime towards the end of 2001/beginning of 2002 did call for a response, and I think the fact that the police and the other agencies involved have been able to turn that around has been an important demonstration to the public that we do respond.

Q36  Bob Russell: Just on that last point about street crime, does street crime also include a sudden surge in mobile telephone thefts?

Mr Gieve: Street crime is defined as robbery and snatch theft and very often it does involve mobile phones. Very often that is what is snatched, yes.

Q37  Bob Russell: Is there any indication that some of those snatches never took place and are either insurance fraud or mobile telephone shops, obviously not deliberately but perhaps with a few initiatives from staff, encouraging alleged thefts of mobile phones in order that new phones can be acquired?

Mr Gieve: I think you probably know that the Metropolitan Police has uncovered some evidence of scams of that sort and is investigating and prosecuting them at present, but I do not think they would suggest that the rapid increase in street robbery in 2001 was just a insurance scam. I do not think there is any evidence to suggest that.

Q38  Bob Russell: If there were to any extent that would adversely affect your figures, would it not?

Mr Gieve: Absolutely. If people report crimes which have not taken place and the police record them and investigate them that affects our figures, and of course the most important thing is it wastes police time and energy.

Q39  Chairman: I do not want to misinterpret what you said so can I be clear about your answers? When we look at the forces where numbers of robberies rose up to December, are you effectively saying that in those areas the police were simply too slow off the ground and that is why they did not achieve the reduction that was achieved in other areas, and are you now confident that those areas are performing as well as the areas that achieved reductions?

Mr Gieve: I am not saying the last point. We still have a spread of performance. Some areas are doing and have done less well than others and in some cases we are working with those forces to see whether there are elements of best practice and so on and they can learn from the more successful areas. What I was saying was that some forces, and take a small force like Lancashire, had very good results very quickly - things have levelled off since then - and in others like South Yorkshire we saw quite a persistent continuing rise through 2002 which we were very concerned about, and so were the South Yorkshire authorities, and I believe that the next set of figures will show that that has started to turn round.

Q40  Miss Widdecombe: What are your working projections for the expansion of the prison population over the next five years?

Mr Narey: We are just waiting for some new projections to be worked out at the moment because at the moment the prison population is significantly under-cutting most recent projections, so those new projections are being cut out. At the moment, there is every sign that the population will reach somewhere in the region of 80,000 by about 2005-6.

Q41  Miss Widdecombe: And what will capacity have reached by that same period?

Mr Narey: Operational capacity today is about 76,400 although we cannot of course, as you know, use every one of those spaces. Operational capacity will have increased to 77,000 at the end of this year and by March 2006 it will be about 81,000.

Q42  Miss Widdecombe: So Op Cap will be 81,000 by 2006?

Mr Narey: Yes, but that includes every place and obviously we cannot use 81,000 places.

Q43  Miss Widdecombe: And operational capacity, of course, is very different from non overcrowded capacity?

Mr Narey: Indeed.

Q44  Miss Widdecombe: What will the non overcrowded capacity be by 2006?

Mr Narey: I would have perhaps to write to you with that exact figure but I would say that the uncrowded capacity at that point will be in the region of about 70,000.

Q45  Miss Widdecombe: So you will have uncrowded capacity of 70,000 and a prison population of about 80,000?

Mr Narey: We may have. It depends on what the new projections --

Q46  Miss Widdecombe: I am aware these are not very precise instruments but that is your estimate. Therefore, we are working towards a situation in which overcrowding, even within operational capacity, is going to increase over the next five or six years?

Mr Narey: Overcrowding has certainly increased over the last few years. We are not planning at the moment for it significantly to increase - indeed, we are hoping very much to hold to operational capacities. It has been very close but the overcrowding is not quite as bad in some respects as it used to be. We measure overcrowding by prisoners sharing two to a cell. We no longer have prisoners sharing three to a cell like before.

Q47  Miss Widdecombe: We have not had three to a cell meant for two since 1994.

Mr Narey: Indeed.

Q48  Miss Widdecombe: Let alone for one, so that is an old figure that need not even be looked at. I am trying to look at where we are going in the next five years from, say, where we have been over the last five years. What is the percentage of prisoners sharing a cell, two to a cell designed for one?

Mr Narey: 22 per cent right now.

Q49  Miss Widdecombe: Is that going to go up or down over the next five years?

Mr Narey: It is difficult to say. I would expect it, if it rises, to rise by a very small amount. Much of that depends on what can be done to reduce the population, but I do not think there is significant further operational slack which could allow a further increase in operational capacity and a further increase --

Chairman: Could somebody deal with that mobile phone, please?

Q50  Miss Widdecombe: Sorry, but before that interruption what you were saying is that you expect if anything it will rise, even if only slightly?

Mr Narey: There may be some slight scope for rising but I do not think there is scope for it to rise significantly. The 22 per cent is there.

Q51  Miss Widdecombe: Let me ask you this: how important do you regard it to start getting that figure which at the beginning of the last decade was coming down to start to come down again - I do not mean the numbers in prison because I have no view on that, but the overcrowding levels.

Mr Narey: Patently I would welcome that figure coming down. I do not think that it is by any means ideal to hold two prisoners in a cell meant for one, particularly when they have to share a toilet in that cell. I do not think that is anything that anybody would want but it has been the reality in prisons in the twenty years I have worked in the Prison Service. I would very much welcome a reduction. I think, however, you can to some extent mitigate the effect of overcrowding by having regimes which get prisoners out of the cells into positive activities which might make them employable and into jobs, and we are doing that much more than we were able to a few years ago.

Q52  Miss Widdecombe: I will come to purposeful activity in a moment because, as you know, I have a particular interest in that but on overcrowding, if there is going to be an increase or at the very best a standstill situation in respect of the number of prisoners - 22 per cent is not far short of a quarter - carrying out their sentences in overcrowded conditions, there does not appear to be any hard plan to reduce that percentage, is that right?

Mr Narey: No, I do not think it is right. As I have explained, operational capacity with the provision of new places in two new prisons will rise. What remains to be seen is whether the population will rise with it. I am confident, for example, that the population will fall by perhaps a 1000 over the next three months as the recent extension to home detention curfew kicks in, and that will allow us to reduce somewhat the number of prisoners who have been doubled up.

Q53  Miss Widdecombe: You use interchangeably, and they are not interchangeable, the terms "operational capacity" and "overcrowding". Operational capacity is safe overcrowded capacity.

Mr Narey: That is right.

Q54  Miss Widdecombe: And uncrowded capacity is what you get when you reduce the numbers of prisoners sharing cells designed for fewer prisoners. On that measure - and I am sorry to press you on it but I want to be very clear - you do not foresee much progress over the next five years and there is not a hard plan - on that measure - to reduce it?

Mr Narey: I repeat that I think we will see some fall in the number and the proportion of prisoners sharing two to a cell in the next few months but I have to be realistic that if the population continues to rise at anything like the rate it has been recently --

Q55  Miss Widdecombe: 80,000.

Mr Narey: -- we may return to a proportion of around 22 per cent.

Q56  Miss Widdecombe: Can we now go on to what you were very eager to lead me on to which is the regimes in our prisons? First of all, do you accept that, when there is overcrowding, purposeful activity is usually the first casualty?

Mr Narey: Yes.

Q57  Miss Widdecombe: Given the rapid rise of the prison population at the moment and the huge pressures, what are you doing to try and ensure that purposeful activity increases and does not just stand still?

Mr Narey: I think there have been quite dramatic increases in purposeful activity. I can tell you that the number of hours of purposeful activity per year have risen by something like 38 million in the last ten years.

Q58  Miss Widdecombe: What is the average?

Mr Narey: The average, because the divisor has been rising very fast, has stayed almost level and we have been just below the 24 hours per prisoner per week mark for some years, as you know. But I think as purposeful activity has come under pressure what we have sought to do, and had some success with it, is protect those aspects of purposeful activity which contribute towards reducing offending and protect education classes, treatment programmes and so forth.

Q59  Miss Widdecombe: You may wonder why I am raising it in this context and I will tell you in a minute, but have you given any thought to contracting out bed-watchers?

Mr Narey: Yes, we have given some thought to that.

Q60  Miss Widdecombe: And what have you concluded?

Mr Narey: It is still a possibility but we have concluded that the work is so unpredictable that it would be very difficult at the moment to arrive at a cost effective contract with the private sector. The private sector themselves are pretty stretched at the moment particularly on their escort services but it is a possibility for the future.

Q61  Miss Widdecombe: It was precisely because escort duties were so unpredictable that you tried to contract it out, so you had order and predictability. Under my very nose I saw last week what happens when you get a sudden bed watch. I was in my local prison invited to look specifically at the workshops and the purposeful activity that afternoon, and there was one unexpected bed watch and the whole purposeful activity schedule fell apart - in other words, there was not any that afternoon. There was nothing for me to see because of one unexpected bed watch. Now, that says to me (1) purposeful activity is always the first casualty and, therefore, there is a continual disruption: (2) that you are operating on a very funny staff margin if you cannot manage with one unexpected bed watch: and (3) you could get rid of that unpredictability if you contracted it out.

Mr Narey: We would have to pay for the contracting out --

Q62  Miss Widdecombe: Of course.

Mr Narey: What we have tried to do, which I think will be in the long term most successful, is as part of transferring the budget for health care from the Home Office to the Department of Health we transferred also the costs of bed watchers. What I believe that will do is bring some value for money judgments into the decision whether or not a stay in hospital is necessary. At the moment one of the problems is that it is impossible to interfere with a clinical decision that a stay in hospital is necessary for a prisoner, but I suspect it is frequently the case that if the hospital, the Department of Health, had to bear the costs of the escort, which are quite considerable, they would take those into account before determining a bed watch must take place. I think more can be done to reduce the stay that a prisoner typically has in hospital and get them back to be nursed in what are now much better clinical conditions in prisons.

Q63  Miss Widdecombe: Staff margin?

Mr Narey: I volunteer that is extremely tight, particularly any time from about the end of May until the end of August. We have driven down staff costs as part of our efficiency programme.

Q64  Miss Widdecombe: Long term sickness?

Mr Narey: Long term sickness, all sickness, is a grave problem to the Prison Service. The figures are far too high and we are only having limited success with driving the figures down. If we could significantly reduce sickness absence I think myself and the Director General would be very comfortable about staffing levels in the Prison Service.

Q65  Miss Widdecombe: How many work shops across the prison estate are self-financing?

Mr Narey: Very few. I do not have a precise number.

Q66  Miss Widdecombe: But there are some?

Mr Narey: Yes.

Q67  Miss Widdecombe: Are we trying to learn from those there are?

Mr Narey: In part but over the last few years the emphasis has been much less on work shop activity and much less on preparing prisoners for work and making them employable. There are some work shops that can do that and some work shops where the prisoner will get an NVQ qualification, but a lot of work shops provide little more than occupational therapy and that is why they do go off first, so that we can protect other things.

Q68  Miss Widdecombe: Why is there no will to expand self-financing work shops which are no strain on the taxpayer, no strain on anybody?

Mr Narey: Because it is much more difficult to do than might be imagined and the Prison Service over a number of years has had its fingers burned trying to do so. Significantly we contracted out work shops at Coldingley. They believed they could make a significant profit from running a commercial laundry service and a sign making process but they pulled out after 18 months --

Q69  Miss Widdecombe: But there have been others that have been successful. In businesses across the country some go to the wall, some are successful, some struggle.

Mr Narey: Some have been successful, although some of the successful ones we have had to haul back when we have had concerns from local MPs about the effect on the local community. In the north west of the country I can tell you that we have had huge success in preparing vegetables for use in supermarkets but we have had to reduce that work because of concerns of Michael Jack MP about the effect on his constituents and the loss of jobs.

Q70  Miss Widdecombe: Can I move on to safety and decency? You said and you have told us in writing that Wandsworth and Pentonville prisons offered "safe decent environments and met targets on purposeful activity". The Chief Inspector says that Wandsworth was "failing to meet basic standards of decency and activity" and that Pentonville was "unable to meet the tests of a 'healthy prison'". Firstly, how worried are you about the state specifically of those two prisons? When do you expect them to have reached an acceptable standard of provision, and how many other prisons in the estate might qualify for that sort of comment that have not been reported on recently?

Mr Narey: Wandsworth and Pentonville specifically are worries both to myself and the new Director General. Wandsworth particularly has been struggling to retain staff. Retaining staff in London prisons has been a grave difficulty now for the best part of two years although there has been some improvement to that, and clearly Wandsworth is one of those prisons which is significantly overcrowded and the Inspector's recommendations were that we should reduce overcrowding. The problem is the Director General would have to overcrowd somewhere else. But the Chief Inspector did also say about Wandsworth that some of the culture improvements witnessed two years ago had been maintained, and she was very complimentary about suicide and self-harm procedures, about improvements to health care, about what was being done on industrial relations, and was particularly complimentary about what was being done on the drugs front, both detoxification and treatment. But we do need more staff, we are working on that as fast as we can, and as we get more staff and reprofile the shift systems - and that is happening right now - I think the amount of time out of cell for prisoners in Wandsworth will increase.

Q71  Miss Widdecombe: Finally, what is the suicide rate at the moment?

Mr Narey: The numbers are very high at the moment. In this current year there have been 54.

Q72  Miss Widdecombe: And we are only halfway through the year.

Mr Narey: Yes. That is up until Friday. A little more than that.

Q73  Miss Widdecombe: If it stayed at that level, and it is a statistical hypothesis, you would end up with over 100 suicides.

Mr Narey: In the calendar year just finished we had 105 suicides.

Q74  Mr Clappison: Does it tend to go up if the prisons are overcrowded?

Mr Narey: Yes, because it does become more and more difficult for staff to identify and protect the vulnerable and the proportion of people coming into our care who have previously tried to take their own lives is frightening - 20 per cent of men, 40 per cent of women. But it is not a direct correlation. For example, in the last few months as the population has reached record heights the number of suicides has tailed off a little but I am not claiming that we have turned a corner. I thought we had cracked suicides three or four years ago when they fell to the lowest level for many years. We have been doing exactly the same things but they have started to climb again most alarmingly.

Q75  Miss Widdecombe: Yes. Six years ago it was running at about 60 a year; it is now up to 105 a year.

Mr Narey: It climbed to 92 in 1999 and then in 2001 we got it back down to 70 again and at that point, set against the population as a proportion of the population, it was at its lowest figure since 1993, but then it has exploded since.

Q76  Miss Widdecombe: I am not trying to make counsels of perfection but if it was 60 when the prison population was, give or take a few hundred, 60,000 and the prison population is now just over 70,000 but you have 105 suicides, that is quite a sharp increase.

Mr Narey: I accept entirely that the rate has increased very worryingly despite myself and the ministers for whom I have worked making it absolutely clear there is no greater priority, and we have poured money into this. We have spent millions and millions of pounds providing more single cells, providing suicide co-ordinators in every local prison, I have incredible support from the Samaritans - of whom I cannot speak too highly, and still the number of deaths has continued to climb.

Q77  Chairman: Going back to what you said about the immediate prospects for the prison population, I think you said you expected there to be some fall because of the introduction of changes to the home detention curfew early release scheme. Two or three days ago it was reported that the prison service was very close to needing to use police cells because of overcrowding. Are you able to tell us that there is no danger of that happening over the next three months because of the impact of the early release scheme?

Mr Narey: There is a possibility that in some areas of the country, and the north west is hard pressed, there may be a very small use of police cells but the population has fallen for the last two days and I would expect it to continue to fall and I would be very surprised if this side of autumn we had to use police cells in any significant number.

Q78  Chairman: But there may be some use?

Mr Narey: There may be partial use in some areas of the country where it is simply impossible to move prisoners quickly enough to where there are spare beds.

Q79  Miss Widdecombe: One other point: is it true that you are now issuing targets to Cat C trainers in respect of prisoners who must be reclassified as Cat Ds?

Mr Narey: No. It is not true that we are issuing targets. We are encouraging Cat C prisoners to reclassify as Cat Ds and not to hold on to prisoners who are working --

Q80  Miss Widdecombe: You can categorically say you have not issued any targets or guidelines?

Mr Narey: I am certainly unaware of any targets at all; I would be very surprised if there were. I will check immediately with the Director General and let you know if that is the case.

Q81  David Winnick: Would you describe, Mr Narey, the situation in some of our prisons as "appalling"?

Mr Narey: In some of our prisons, some of the time, yes, I would say that was a fair description, but very few of them.

Q82  David Winnick: What number of prisons would you say would fit that description?

Mr Narey: I think at any one time the number is very low. To give you perhaps a more reliable statistic --

Q83  David Winnick: You would certainly presumably say that Wandsworth and Pentonville come into that category?

Mr Narey: I think at some time conditions for prisoners at Wandsworth and Pentonville have been very poor. At Pentonville at the precise time of the inspection conditions were very poor indeed but that was in part because there had been a disturbance and the prison had been partially locked down, and the day after the Inspectorate left twenty more prison officers arrived at Pentonville and immediately the place became much better. I think there are very few prisons at any one time to which I would apply that. In the twenty or so inspectorate reports which have been published this year, only I think three or four of them have been very critical. Most have been very positive and a few have been mixed.

Q84  David Winnick: Mr Narey, when I asked you whether you would describe the situation in some of our prisons as "appalling" you said "Yes", and now you are beginning to qualify?

Mr Narey: Very few of them is the point I was making, and I think this is sometimes a temporary position.

Q85  David Winnick: Would you be in a position to name those prisons which you describe as "appalling"?

Mr Narey: I would not like to condemn a whole prison. What I was trying to say is that in some prisons for temporary periods, when prisoners get out of cells for a very few hours in a single day, I think those conditions are pretty appalling for individuals, but I do not think at the moment there is a single prison which is consistently appalling. We would not allow that. If you had asked me that a few weeks ago I might have said that was the case at Ashfield prison, if you had asked me a couple of years ago I would have said it was the case about Birmingham prison, or I might have said it about Wormwood Scrubs a year before then.

Q86  David Winnick: The Chief Inspector of Prisons told the Committee about four tests which the inspectorate have for what would be called a healthy prison - safety, respect, purposeful activity and resettlement - and she said, "I have now seen all those being damaged or potentially damaged by the effects of overcrowding and that is very damaging to the system as a whole". Would you disagree with that?

Mr Narey: I would say that if it were not for the pressure on numbers the performance of the Prison Service in those areas would have been much better, but I think any glance at the statistics for the last year in what was produced in, for example, getting prisoners educational qualifications show that the prison service did not go under. We could have produced much more but I think the performance in making prisoners employable and getting them into jobs has been pretty praiseworthy in a period where there has been huge pressure.

Q87  David Winnick: And, of course, as has been mentioned by Miss Widdecombe, we have since had the reports into Wandsworth and Pentonville Prisons. The cells where the prisoners have to do their toilets with someone else in, what percentage would that be? You told us, if I have got the figures right, that 22 per cent of prisoners are sharing a cell which are meant for two.

Mr Narey: Twenty-two per cent of prisoners share two to a cell in a cell which was meant for one person.

Q88  David Winnick: In all how many would be undertaking toilet facilities where someone else is?

Mr Narey: All of those prisoners. Twenty-two per cent of the population will at some point, particularly through the night, have to use a toilet in a cell in which another prisoner is living, and I accept entirely that that is pretty gross.

Q89  David Winnick: Pretty barbaric, is it not?

Mr Narey: It is gross. I do not think it is barbaric.

Q90  David Winnick: And the chances of that improving?

Mr Narey: As I explained to Miss Widdecombe, I think the chances of it improving significantly over the medium term are quite small until we can convince the courts that community penalties are a much more constructive way of dealing with first time offenders and offenders who are neither persistent nor serious. We have not yet convinced the courts of that.

Q91  David Winnick: Lord Justice Woolf recently made some comments, which were considered to be controversial at the time, about sentencing where he argued, did he not, that in certain instances, as you have just mentioned, non-custodial sentences would be more appropriate? Would you agree?

Mr Narey: I would agree with that. I think the significant point is that the Home Secretary has been saying that as well. In all the time I have been involved in prisons I have not heard a more consistent message from a Lord Chief Justice and a Home Secretary, which is that first time offenders and less serious offenders should be given community penalties when appropriate. There is something rather mysterious that has happened. One of the reasons for the rise in the prison population over the last few years is that twice as many first time offenders go to prison as, I believe, four years ago. There is no explanation for why that should be.

Q92  David Winnick: Can you give your opinion as to why judges are so reluctant to give non-custodial sentences where it would be more appropriate for first time offenders?

Mr Narey: I think that because we have perhaps not made clear to the judiciary the way the Probation Service has radically changed over the last couple of years they do not yet either know or believe that, for example, some of the new community sentences are much more effective. The drug testing and treatment, or, for example, the new intensive Control and Change Programme are all much more likely to reduce crime and reduce criminality than is a very short prison sentence. We only need slightly to adjust sentencing behaviour to make a dramatic reduction in the prison population. If just half of all prison sentences of six months or less became community penalties the population would fall by 3,500.

Q93  David Winnick: As a result of the overcrowding in prisons, Mr Narey, what would be your assessment of the chances of successful rehabilitation?

Mr Narey: I think that the chances of successfully rehabilitating a prisoner who is serving a reasonably long sentence has significantly increased in recent years. I know, for example, that between 1998 and now the proportion of prisoners going into jobs on release has more than doubled. There were 42,000 educational qualifications gained by prisoners last year. All the things which we are doing to make prisons more effective - drug treatment, education, offending behaviour programmes - cannot impact on prisoners who serve very short sentences. The reality is that they will spend most of their sentence lying in their bunk watching TV because it needs, for example, about six weeks' intensive work to move somebody up from one level in terms of their literacy and numeracy. We have lots of prisoners who do not serve anything like that.

Q94  David Winnick: What percentage of prisoners re-offend?

Mr Narey: The percentage of prisoners who re-offend overall is about 60 per cent within two years, although there is significant evidence that that proportion is falling. The most recent statistics on re-offending showed, across prison and probation, a fall in expected re-offending of about 3.5 per cent and for young offenders punished in the community a fall of more than 20 per cent.

Q95  David Winnick: But 60 per cent overall?

Mr Narey: Yes.

Q96  David Winnick: We had an inquiry into Blantyre House where re-offending, if I remember, was less than ten per cent. You will remember that inquiry very well.

Mr Narey: I do indeed.

Q97  David Winnick: You were in charge of the Prison Service. You gave evidence to us. What is the situation now at Blantyre House?

Mr Narey: The re-offending rate at Blantyre House remains extremely low but it is not a cross-section of the prison population. These are long term prisoners coming towards the end of their sentence.

Q98  David Winnick: We know that, Mr Narey. What I am asking is, what is the situation since our inquiry?

Mr Narey: I think Blantyre House is a better prison than ever right now. I think it has a marvellous atmosphere, it has got a very good record of getting prisoners into work, but it has some of the things one would expect from a prison which were not featured at the time of your inquiry. We have got adequate security there, proper monitoring of prisoners, supervision of their work placements and so forth, which were the things I was very concerned about at that time.

Q99  David Winnick: The prison visitors are satisfied?

Mr Narey: The Independent Monitoring Board, as they are now called, are extremely positive and, as you would expect, I have been in very close contact with that board ever since the unhappy circumstances surrounding the removal of the then governor.

Q100  David Winnick: If I can turn briefly to prison health care, how far would you say prison health care falls below general NHS care?

Mr Narey: I think acute care, the typical care that you or I would get from a GP, is now pretty much matched in most prisons. In 1999 the Department of Health helped me do some work which estimated that there were 19 health care centres whose levels of treatment were simply unacceptable and we have reduced that year on year and that figure is now zero. In terms of access to a nurse or a doctor if someone feels ill in a morning, I think that care is quite good, and I think secondary acute care in hospitals is good. We are still struggling desperately to care adequately for the mentally ill and the number of prisoners who are suffering from severe or profound mental illness are now more than 5,000. Although as Director General I had the benefit of about 300 psychiatric nurses from the NHS coming to work in prisons, it is still a very upward struggle. The Prison Service are caring for people who would have been cared for in long term psychiatric prisons before care in the community was introduced in the late eighties.

Q101  David Winnick: One way of not improving your health is by taking drugs in prison or outside. We were told at one stage in a previous inquiry that in every prison there are drug tzars. This was about two or three years ago. Would you say it was the same situation now?

Mr Narey: I do not agree that there are drug tzars as such in most prisons. I know that David Ramsbotham made that comment and the then Minister, George Howarth, disputed it. There are clearly prisoners trading in drugs but the term "drug tzar" suggests that there are the equivalents of Harry Grout from the Porridge series prevailing over the prison, which is not the case.

Q102  David Winnick: It is the word "tzar" that you are unhappy about?

Mr Narey: It has connotations that it is somehow out of control.

Q103  David Winnick: Drug barons or just drug criminals?

Mr Narey: There are people dealing in drugs, certainly, but levels of drug abuse in prisons have more than halved over the last three or four years. Instead of four treatment programmes four years ago there are now 60 and there is some very firm research from the introductory drug treatment programmes, such as the Wrap(?) programmes which you will remember, Miss Widdecombe, that the re-conviction rate of graduates from those programmes is 20 per cent down after one year of freedom.

Q104  David Winnick: If I can go back to the question, would you accept that in most of our major prisons, if not all, there are drug criminals who are actively involved in drugs?

Mr Narey: Oh yes, I would, Mr Winnick, undoubtedly.

Q105  David Winnick: You would accept that?

Mr Narey: Yes.

Q106  David Winnick: On the question of the possible merger of the Prison and Probation Services, has any conclusion been reached by ministers?

Mr Narey: No. In fact, it is not a subject which ministers have yet discussed. There was an article in The Times recently which suggested that I said that this was something under consideration. What I said was that that was a possibility for the future. My new job working for ministers is to try to bring the Prison and Probation Services closer together to get a better premium in terms of reduced re-offending. One option for the future may be a merged service but that is not something which I have had any discussions with ministers about at all. It is not something which they have given thought to.

Q107  Chairman: On the health issue, can you remind me, Mr Narey, who inspects the quality of prison health services?

Mr Narey: The Inspectorate of Prisons, who have health specialists as part of their team and visit every prison.

Q108  Chairman: What is the logic for prison health services if they are funded by the NHS not being inspected by the Commission for Health Improvement or the successor that will shortly come into place?

Mr Narey: The Commission for Health Improvement are now working very closely with the Inspectorate of Prisons but my view is that the Inspectorate of Prisons has a particular expertise on measuring health care within the difficulties of a penal setting and are working closely with CHI in doing that.

Q109  Chairman: If somebody has a mental health problem they have a right to the same quality of treatment if they are in prison as they would if they were in the community or, indeed, if they are sectioned. Should they not be inspected by the same people to the same standard?

Mr Narey: I think the important point is that they are inspected adequately and thoroughly and critically and they are certainly inspected to that regard at the moment by the current Chief Inspector and her staff.

Q110  Chairman: Why not use the same body?

Mr Narey: Because Ann Owers is using the same people. She is using health professionals as part of her team. She goes in and looks at every part of the prison and she does that for health in co-operation with CHI, for education in co-operation with the Adult Learning Inspectorate and so forth. Every prison gets an inspection of everything and every activity which is taking place rather than inspections taking place on a fragmented basis.

Q111  Chairman: When was the last report specifically on the quality of mental health provision in prison hospitals?

Mr Narey: There has not been a thematic report of that nature that I recall but the care of the mentally ill in prison is commented on in a large number of Ann Owers' reports.

Q112  Chairman: So, despite the fact that there are 5,000 prisoners with significant mental health problems, there has not actually been a thematic inspection of the quality of mental health provision in prisons?

Mr Narey: No, there has not.

Q113  Mrs Dean: Before I move on to the Criminal Records Bureau can I ask whether the Health Service within private prisons operates in the same way as it does in public prisons?

Mr Narey: The responsibility of the unit in the Department of Health covers all prisons, public and private. What we have been doing with public sector prisons is transferring responsibility to primary care trusts and getting them to take responsibility for their local prison. We are moving to that with private prisons as well. Some at the moment have contract-out facilities with private companies and it will take some time for contracts to be amended, but I think it is vital that we make sure that the local community takes responsibility for the health care of people in custody within that community.

Q114  Mrs Dean: Moving on to the Criminal Records Bureau, do you think it is right that bodies such as care homes, some of which are in the voluntary sector, having waited to apply to the Criminal Records Bureau for their staff, should then be penalised by the increase in the amount they are charged by the Criminal Records Bureau?

Mr Gieve: I think it is legitimate for them to pay the new charges, yes, and that is what we intend.

Q115  Mrs Dean: Even though they have co-operated with the Criminal Records Bureau by delaying the application for staff already employed by them?

Mr Gieve: Yes. The position is, as you know, that the Criminal Records Bureau started in a fairly disastrous way. It could not deal with the volume of requests for clearance. The costs of providing the service have proved very much higher than expected and we have had to make a choice as to how to meet that additional cost. What we have decided is to increase the charges although also to continue the subsidy for another two years from what is a mix: the Department for Education, the Department of Health and the Home Office. It is not desirable. Of course, it would be much better to offer the service more cheaply but that is the situation we face.

Q116  Mrs Dean: I understand the philosophy of the need to charge sufficient to cover the cost of the service but I am concerned about those who have been asked to delay applications in order for the service to get established and who then find themselves having to pay twice the amount that they were going to have to pay had they not co-operated and put their requests in earlier.

Mr Gieve: I agree. I sympathise with that concern. We did not delay them so that we could charge them more. We delayed them because we could not handle the volume of applications. If we now said, "This sector can have last year's prices", we would have to make up the shortfall somewhere else, either by putting up the prices to other applicants or by increasing the subsidy from central budgets, and all of those have opportunity costs. I can well understand that this sector will feel hard done by but I do not think there is a fairer way.

Q117  Mrs Dean: Do you anticipate the disclosure fees of the Criminal Records Bureau rising again before the Bureau becomes self-financing?

Mr Gieve: I do not want to make any promises on this but we are hoping that these fees will be sufficient certainly for the next year. As you know, we have got the Criminal Records Bureau back on to an even keel in that they have reduced the backlog to small levels, they are dealing with cases as they come in. We still have to re-negotiate our contract with the private sector partner. Those negotiations are still ongoing and it is not clear yet how much extra investment will be required to move the service forward, so I cannot make a complete promise on this but we have calculated these fees as our best estimates of what is needed.

Q118  Mrs Dean: When will Capita be able to pay the Home Office the penalties incurred against the contract?

Mr Gieve: We have already withheld payment over the year or so that it has been running, so it is not a question of paying back. It is a question of withholding service credits and some damages.

Q119  Mrs Dean: So is there any outstanding money owed to the Home Office?

Mr Gieve: I do not think so. The contract provides for certain service performance and for the reduction of payments if that is not met and it has not been met and we have made reductions. I do not think there is any further bill.

Q120  Bob Russell: Mr Gieve, going back to one of the earlier questions that Mrs Dean raised about the higher charges for the Criminal Records Bureau, on 5 June the Home Secretary announced that the charges would go up on 1 July 100 per cent, or more than 100 per cent in one category. That was little more than three weeks' notice, no consultation. At what point did you know that there was a financial black hole that needed to be filled in?

Mr Gieve: We have known for some while that the costs were running ahead and last year we had prolonged negotiations on how to meet the costs.

Q121  Bob Russell: There was no consultation. It was three weeks' notice or thereabouts. A category of users was encouraged not to apply, as has been pointed out. They kept faith and now the Criminal Records Bureau is going to whack up their charges by more than 100 per cent because they kept faith. That is not fair, is it?

Mr Gieve: With any price increase there is a limit to how much you can consult in advance because what you do is draw forward lots of applications, and indeed that happened in the three weeks that you are talking about. On the fairness, we agreed with the Department of Health and with the whole sector that the Criminal Records Bureau could not provide a service over the last year. We are hoping to bring it in from the autumn. It is not as though they are putting in applications two days after the price increase. We are hoping to bring in these new sectors in the autumn and, of course, we can understand people will feel hard done by but there is no free lunch here.

Q122  Bob Russell: But the voluntary sector also have been hit by keeping agreements. I am not talking about volunteers where the service is free. I am talking about the voluntary organisations, the paid side of it. The hospice movement, for example, is going to have to find the best part of £100,000 a year extra because of these charges being whacked in at three weeks' notice.

Mr Gieve: Yes. The voluntary sector will be hit by this, we know that.

Q123  Bob Russell: And you are also aware, of course, that there were heated questions at a committee of this House last week when this came before it and the Government had to rely on some arm-twisting to get it through in place of an Opposition vote from the two Opposition parties? You are aware of that?

Mr Gieve: I could not comment on parliamentary tactics.

Q124  Chairman: Do you think the compensation payable by Capita of just under two million pounds out of a total spend by the end of the last financial year of £71 million is a fair figure given what you describe as the disastrous performance of the Criminal Records Bureau?

Mr Gieve: We are in negotiations with Capita now and I expect I will be appearing before other committees about this in detail when the NAO report is available. I think Capita would say that the service credits and so on, the withdrawn payments, are only a relatively small part of the losses they have incurred over the last year and would also say that the mistakes that were made were made by both partners and I think that is true.

Q125  Chairman: I am sure you will be appearing in front of another select committee about the same thing, but is there any sign yet that we are beginning to learn any lessons about how the public sector procures these types of projects and makes them work?

Mr Gieve: Yes. At government-wide level this was one of the last projects not to go through the full OGC gateway process which has been set in place for all major investment procurement projects, which requires independent inspectors, in effect assessors, to come in at various key points during major investment projects to give an independent assessment of whether things are on track. In the Home Office we are using that but we have also introduced our own additional mechanisms for improving project management. Three things. First, we have set up a centre which monitors all our major projects (and we have quite a lot of them) on an ongoing basis monthly assessing whether they are still hitting their milestones and alerting the Board if they are not. We have hired two of the most experienced OGC consultants, because they use consultants with a broad project background, to look at ours on a systematic rolling basis over the year. Third, we are in the process of recruiting a group of experienced project managers and trying to boost the numbers of our senior civil servants who have experience of major investment projects. Both at the government level and at the Home Office level we are taking action and I should point out that there are some projects which we have delivered over the last year which have in fact run to time and successfully.

Q126  Mr Clappison: Can I ask Mr Gieve some questions about Home Office internal management, and particularly some staffing changes which you have had recently? Could you comment on the fact that the Home Office now has three Permanent Secretaries and could you comment possibly as well on the significance of the promotions of Mr Narey and Leigh Lewis to that rank?

Mr Gieve: This has been a deliberate strengthening of the Home Office senior management. The Treasury, the Foreign Office, the Ministry of Defence have customarily had second Permanent Secretaries as well as the Permanent Secretary, but the Home Office has not. I think this reflects the fact that our task is as difficult and wide-ranging in many ways as theirs and we have wanted to get the best possible people in to do the job. As to the particular significance of getting Leigh and Martin into the centre, and Martin was promoted to Permanent Secretary while Director General but has moved into the centre of the Department, apart from the fact that it gives Martin a broad overview of all the correctional services which we were discussing recently, it brings into the centre of the Department two people who have real operational management experience: Martin in running the Prison Service and Leigh in running Jobcentre Plus. That reflects a wider change which we are trying to bring about in the Home Office to turn it from what I think was still a pretty classic Whitehall department of people with great experience of presentation, policy advice and legislation into a department which has a real balance of those skills but also operational management skills.

Q127  Mr Clappison: Could I ask Mr Narey a question arising out of that, particularly as we are rolling in new resources? I notice from the departmental report that one of the human resource aims of the Department is to recruit, retain and motivate people with the skills and experience needed, but I also notice that as part of the changes you have brought in in your new role there have been a number of redundancies, over 24 staff at the senior Civil Service grade and 40 at grades just below the senior Civil Service grade who will be leaving the Civil Service. How does that fit in with the stated desire to retain and motivate people?

Mr Narey: The Department has changed enormously in recent years and we are now much more focused on making a real impact on the front line and improving services and reducing crime and re-offending and so forth. The staff in the Home Office have not really kept pace with that and I think most healthy organisations, certainly if you look at organisations outside the public sector, from time to time need to refresh their staff and bring in more people. We identified some people who it was difficult to find postings for or who were coming to the end of their career and were willing to go and we were able to deal with them decently and give them packages to move on, and behind that we have been able to bring in a lot of new people. For example, a lot of the traditional people who have gone and who perhaps had old-fashioned mandarin skills have been replaced by people with real project and programme management experience who are better able to make sure that we do not have some of the disasters which Mr Denham was asking Mr Gieve about.

Q128  Mr Clappison: Are there going to be changes in training to reflect this shift which you have described to us in management and operational terms?

Mr Narey: Yes. There are some huge deficiencies in HR in the office which we are working on fast. One of the things we have to do a much better job at is bringing on talent, preparing and training people for the challenges that they have. I think the Department has been weak in doing that and we are trying very hard to catch up on that at the moment and are developing a training strategy. I have got a particular individual who has been talent spotting the very best people and has been working with them to bring them on. I am looking, for example, at the moment to taking our bright young fast-streamers and as part of their initial period in the office having them working outside the Home Office away from Whitehall, perhaps with the Prisons Trust and so forth, to try to get a much better focus on what happens at the front line. Finally, we are trying to take 70 per cent of our staff out of the office, and we will make it a target for them as part of their personal development every year to spend at least some time on the front line, whether that is with a policeman or a prison officer or a probation officer, in order to get a real recognition of what it is like out there. I think there are still some people in the Home Office who do not really know about it.

Q129  Mr Clappison: Can I ask you about the people you are hoping to draw in from outside? What particular areas of expertise are you hoping to enhance by external appointments and from which employment sectors are they coming?

Mr Narey: We have had a very gratifying response to the advertising campaigns we have had. We have three main campaigns. First of all, we are bringing in more direct entry people at grade 7 or principal level so that we will have in that middle rank a lot of people with outside experience from industry and other parts of the public sector. Secondly, we are bringing new heads of group into the senior Civil Service who will bring their experience in. Specifically, we have had a separate competition, for which we have had about 400 applications, from people who have delivered major projects, IT projects and similar projects, and who have real skills in delivering complex programmes. I think their arrival - and they will start to arrive later this year - will significantly broaden the skill base in the Home office and make us much better equipped to make a real difference on the front line.

Q130  Mr Clappison: Currently a person who was carrying out an operation like that, delivering a large project in the private sector, would presumably command quite a high salary. How do salaries fit into this picture as far as you are concerned?

Mr Narey: For some of the really big jobs we have to meet what the market is offering. We have to be much more flexible in offering people the right sorts of salaries to get them. Along with that we sometimes have to move away from the assumption that people are in jobs for life. My personal view is that, as the office moves on, there will be more people coming and working for shorter periods of time and then moving on to other jobs. I have just brought in a very good HR specialist to try to improve customer focus in HR, which is sadly lacking at the moment. He is coming from wide experience in customer based areas in the private sector. He is very impressive. He has made it very plain that he has no intention of being with us for more than two or three years because he will then want to move on and do something else, probably back in the private sector, and I think that is an encouraging model.

Mr Gieve: One of the real traditional faults of the Civil Service has been that people have been promoted because of the breadth of their responsibilities rather than the depth. The private sector has been much better at promoting and giving big rewards to people who stick with fairly narrow responsibilities but really understand those and can run projects, and that is particularly true of project management. At the top level we have brought in some people who are paid very much more than me or Martin and I think we will continue to have to do that for particular jobs, not to run the Department but to manage major new projects or programmes. I think that is part of the modern Civil Service.

Q131  David Winnick: Will the three Permanent Secretaries all be on the same pay scale?

Mr Gieve: We are all on the same pay scale but I do not think we will all be on the same point of it.

Q132  David Winnick: Is your salary in the public domain?

Mr Gieve: Yes.

Q133  David Winnick: Can you put on the public record now how much your annual salary is?

Mr Gieve: I cannot remember.

Q134  David Winnick: Would you have any objection to that?

Mr Gieve: No, not at all. I think we publish this in our annual report by range.

Q135  David Winnick: If you would rather not put it on the record I will not pursue it.

Mr Gieve: I will let you know afterwards. I just do not want to give you the wrong number and I cannot remember what it is. I will send the Committee a note on my personal pay.

Q136  David Winnick: And the other two Permanent Secretaries as well?

Mr Gieve: I would have to ask them.

Mr Narey: The same with my pay, Mr Winnick.

Q137  David Winnick: The tradition is that you retire at 60. Does that change at all as a result of the legislation which will be coming about in two years' time?

Mr Gieve: I do not expect it to at the top level. Indeed, very few senior civil servants these days survive all the way to 60. That is also part of the modern Civil Service.

Q138  David Winnick: Do you have an option of doing so with your senior colleagues or not?

Mr Gieve: Whether I have the option to stay on for another year or two depends on my performance.

Chairman: Mr Gieve, thank you very much. On the point of salaries, if you wish to write to us please do so but I would not want to ask you to do anything which would not be normal practice in the Civil Service. That is entirely in your hands. Thank you, Mr Narey, Mr Gieve, Mr Nye, very much indeed.