Examination of Witnesses(Questions 1260-1279)|
THURSDAY 13 FEBRUARY 2003
1260. I am afraid I am innocent about all thisI
have never been headhunted but I am open to offers!
(Ms Cawley) Can I take your number, Chairman?
1261. Probably several of us here would like
to go onto your books! I do not really know what goes on. Why
does the public sector have to do this? Why can it not have its
own recruitment agency that goes off and does the kind of thing
(Mr Davidson) It did have at one time Recruitment
Assessment Services, which was sold some time back. The public
sector does, indeed, do much of its own recruitment from time
to time but there is a perceived advantage occasionally in using
external third parties such as ourselves, either to handle the
process where it is felt that the resources to handle a particular
public appointment do not exist in a particular organisation,
or where it is felt it would be useful to get some external independent
perspective to help manage the process and bring some fresh views
to the needs of the job or, indeed, where it is perceived that
a third party may be helpful in terms of acting as an intermediary
in attracting candidates even to the extent of going off and headhunting
candidates or encouraging particular candidates to apply in connection
with a profile we have been given by the client, and it may be
sometimes to identify categories of candidates that typically
otherwise may not have applied for the job. Also we will get used
in situations where the reputation of an organisation is relatively
poor and there may be a view that it is going to be difficult
to fill a particular job, or we may get used where an organisation
has attempted to recruit already and failed, so there is a sense
of need to put out some extra effort, or we may get used where
it is felt that it would be very useful to have some independent
assessment of candidates very specifically, so there is a whole
string of reasons.
1262. But unless I am not following you there
is no reason why this should be done necessarily by the private
sector? If you were running United Kingdom Recruitment which is
a branch of government you would be doing the same job, would
you not, in the same way presumably?
(Mr Davidson) There is a possibility. That offer has
not been made to date but I will consider it if it comes. There
is an issue here about any organisation doing its own recruitment,
and some candidates will, of course, become somewhat nervous about
how confidential that information is going to be. If, for example,
any one department began to do all its own recruitment, even for
the most senior positions, you would have some of the candidates
at senior levels who might not be comfortable for it to be known
that they might be up for a move, particularly in parts of the
public sector or in parts of the private sector. Individuals get
anxious about issues of confidentiality.
1263. And you are the market leader, are you,
in public sector high level recruitment?
(Mr Davidson) We would be perceived as being the market
1264. "Perceived as", or are?
(Mr Davidson) I believe we are, but that shifts and
changes according to the extent to which one is used. One is only
as good as the most recent reputation and whether one has ended
up with placements in jobs, but yes we would generally be regarded
as the market leader.
1265. And it is a lucrative business?
(Mr Davidson) Public sector recruitment tends to be
less lucrative, as it happens, than in the private sector where
generally the remuneration for candidates is higher. The fees
to consultancies in those situations would be higher. Typically
in the public sector remuneration levels are less, so if our fee
is based on a percentage of the remuneration then proportionately
it is less, but also a lot of the time the public sector chooses
to buy its suppliers based on a fixed fee, whereas private sector
will tend to buy on a percentage of ultimate remuneration. Clearly
chairmen of companies and chief executive of companies are on
multi million packages, and if you are doing private sector recruitment
it can be lucrative. It is far less so in public sector.
1266. It is like an estate agent. The bigger
the price you sell the house for, the more money you get?
(Mr Davidson) That analogy has been used before!
1267. I have read that you get a quarter of
the annual salary, but this is not true of the public sector?
(Mr Davidson) As I said to you, it depends on the
particular client. On occasions it will be a percentage, perhaps
a quarter of a salary; in other cases the fees which are negotiated
in advance may well be based on a percentage. For example, the
Cabinet Office orchestrated a series of framework agreements to
cover senior civil service appointments recently, and there are
now twelve firms on that framework agreement. Part of the reason
for doing that framework agreement was to encourage more competition
in that particular market and also to ensure that there were some
set minimum standards that each of those companies were offering
in terms of doing the work, and also to ensure that the Cabinet
Office was happy about the level of fees that would be charged.
The system now is that any department can utilise any of the organisations
who have been approved in that framework agreement. There are
twelve and they are free to go elsewhere, in which case they must
go to tender on those appointments.
1268. I notice on the back page of The Times
appointments today that it is entirely you. There are four big
appointments, all yours, and someone has kindly worked out for
me that this page alone would make you, on a 25 per cent basis,
(Mr Davidson) In terms of?
1269. If we took 25 per cent of salary. That
is not bad, is it?
(Mr Davidson) I think it is a competitive rate in
terms of what anyone else might be offering. As it happens, we
would not be considered to be the most expensive of those organisations
that operate in the public sectorbut still, yes.
1270. Could I just ask you this: we are primarily
interested clearly not in your main business but in quango appointments
when we talk about the public appointment system as it has been
talked about here, and I want to get a sense of the extent to
which you are involved in those kind of appointments, non executive
appointments, to public bodies. Do you work with the Public Appointments
Unit inside government? Where do you fit into that whole bag of
(Ms Cawley) We do work with the Public Appointments
Unit in that clearly they hold the register which has been much
discussed in your proceedings over the last year or so, and has
been described as a dinosaurin my opinion rightly. We work
more closely with the Office of the Commissioner of Public Appointments,
Dame Rennie Fritchie and her staff. Clearly any public appointment
which we handle is governed by her Code, and we have found it
extremely useful to be able to touch base with Dame Rennie and
her staff if issues come up that we would welcome clarification
or guidance on, or at times where there are issues which she needs
to make clear would not be acceptableissues arising not
from our side but perhaps from the department involved. In terms
of the proportion of our business, the bulk of our business is
executive appointments. Capita RAS handle quite a large amount
of, if I can say, lower level public appointments, particularly
in the lower tier as defined by Dame Rennie. We handle a smaller
number of the higher level appointments so, as mentioned before
already, the chair of the Audit Commission is one we have recently
done, chair of the Housing Association is just starting, and the
chair of the Commission for Racial Equality is another recent
1271. That is fascinating but, just before we
lose your remarks there, tell us in a nutshell why you think the
Public Appointments Unit is a dinosaur?
(Ms Cawley) The Register rather than the Unit is a
dinosaur because government departments do not use it. They know
it is there: it is not very easy to use it in any kind of interrogative
way, so you cannot say, "I need somebody with this range
of competencies so I will search that database to find it"you
would have to plough your way through the thousands and thousands
of names there. My own name is on there because I registered some
years ago before I moved into this line of work, and I received
a few information packs which were of very tangential interest,
and nothing else. Departments do not quite know what to do with
it. If the investment were there to turn it into an interrogable
database that would be hugely helpful and then it might be used,
but at the moment it is not of any practical use.
1272. That is interesting. In your relations
with Dame Rennie I understood you to say, correct me if I am wrong,
that sometimes departments were wanting to do things that did
not necessarily stack up in terms of how it should be done. Is
that what you were saying? That you needed to check it out with
(Ms Cawley) That is right; there is guidance and sometimes
the guidance needs to be interpreted. Sometimes, because departments
have not gone through the process before or because the civil
servants are not HR professionals, as the Civil Service tends
to be people who pass through to other jobs, if it was their first
time and they are not clear of the procedures, so either they
or we on their behalf check that out with Dame Rennie's unit.
1273. What kind of naughty things are they not
(Ms Cawley) I think "naughty" is your word
rather than mine, but clarification on the role of ministers in
the process can be one area, particularly because the role of
ministers is very different in executive and non-executive appointments,
so if the same member of staff in a department is dealing with
a public appointment and has previously dealt with an appointment
to the Civil Service staff, different rules apply, and they can
get twitchy thinking that the minister wants to be involved, but
it is proper that the minister wants to be involved in the public
appointment within the designated parameters.
1274. You mentioned that you were involved in
the appointment of these various jobs, including the recently
appointed chair of the Commission for Racial Equality. The reason
I pick that up is because I saw in the Daily Mail when
this was appointed the headline: "Tony crony in top race
job". Now, you are the person to tell us that it is not like
(Ms Cawley) Absolutely. Hamish can talk about this
in detail because he handled it but in that particular example
the rigour of the process was the protection for both ministers
and for the department that no appointment was made, or could
have been made, on the basis of cronyism.
(Mr Davidson) I was involved in the agreement of both
the ad and the specifications for the post, taking the briefings,
placing the ad and then with colleagues in terms of handling the
response to that advertisement, and also in terms of approaching
potential candidates we thought might be appropriate, suitable,
and maybe even interested. We sifted that response: we made recommendations
for a long list of candidates to be interviewed: and we interviewed
something of the order of 14 or 15 candidates for that post, that
long list having been agreed by the client. The interviewing process
was with myself and a technical assessor, someone we brought in
who had specific knowledge of race issues altogether, and we did
the interviews together and those interviews lasted anything up
to two hours each. From that we prepared detailed two-page reports
scored against the appointment criteria, and again made recommendations
on those candidates to go forward to the Appointments Panel, explained
those recommendations and those candidates at that point, six
I believe, were taken forward and were interviewed by the Appointments
Panel. At that point we also asked candidates to undertake an
in-tray exercise that we had written specifically for that post
to mimic the kind of issues that would likely occur in post. Clearly
one of the issues about a chair post versus a chief executive
is that, if it is a non executive chair, you do not want a chair
who thinks they are going to run the organisation as an executive,
and that is a typical common problem. All candidates, whilst undertaking
this exercise, were fed into the process. The Appointments Panel
then interviewed the six candidates.
1275. Do you stop at the door of the Appointments
(Mr Davidson) We advise the Appointments Panel and
the process then varies. If you asked me what our preference would
be and what we think would be best practice, we think it is better
practice if we have the ability to attend all the following meetings
as observersthat is, the appointments panel process. That
gives us the opportunity to answer any questions that the panel
may have about changes in the performance of candidateswhy
they appear to be this yet the report said thatand also
to be in a position to give feedback directly to candidates afterwards.
It is fair to say that this practice is not that common for public
appointments, nor in civil service appointments, whereas if you
looked elsewhere in the public sector, particularly at local government
appointments, if consultants were being used you would see the
process right the way through to the end. There is no extra cost
to this at all: it is part of the package, if you like. There
are some advantages and, indeed, when Alison Cawley did the chair
of the Audit Commission the particular external assessor was comfortable
that that happened.
1276. Do you know how the Appointments Panel
for this particular job we are talking about was constructed?
(Mr Davidson) There were members of the Home Office,
also the head of the Race Equality Unit, plus some other independent
individuals that had been agreed at the outset.
1277. Agreed with whom? Are you involved at
all in the identification and selection of the independent members?
(Mr Davidson) No, not usually.
1278. Who does that?
(Mr Davidson) That would be the client themselves
in conjunction with Dame Rennie.
1279. Always in conjunction with Dame Rennie?
(Ms Cawley) Certainly with her office in terms of
which independent assessors might be available.