Examination of Witnesses(Questions 1320-1339)|
THURSDAY 13 FEBRUARY 2003
1320. Is there a case for having a more systematic
approach to remuneration?
(Mr Davidson) There may be but I suspect whatever
more systematic case was put forwardand guidelines would
be usefulwhatever systematic case was made, I am sure instantly
one would find individual reasons why in this organisation it
is not going to work or this organisation is finding great trouble
finding anybody so therefore it has got to break the differentials.
(Ms Cawley) I think there is a case for a more consistent
approach across Whitehall departments in the same way there is
an approach for senior executive posts, that go to the Cabinet
Office if there is a case to pay more than what is seen as the
going rate for a job. At the moment departments seem pretty much
to work out their own rules about how they are going to reward
public appointments. There are big variations between quangos
in the different departments and a degree of consistency and evaluationhow
does this job compare to that job and perhaps a ring master in
the Cabinet Office in the same waywould be helpful. We
do have situations where people say, "Hang on, if this post
pays that why does this one you want me to apply for only pay
Chairman: That is very, very useful. That is
what I was trying to get at.
1321. I am interested about your relationship
with Capita. You are part of Capita and Capita appoints an enormous
amount of people. How do you keep the Chinese walls intact?
(Mr Davidson) Much the same way we did as when we
were part of PricewaterhouseCoopers.
1322. That was different, was it not. PricewaterhouseCoopers
people were not running very large councils. Capita has a direct
contract to run councils.
(Mr Davidson) These days PricewaterhouseCoopers is
involved in running large parts of councils.
1323. It was not then.
(Mr Davidson) About the time we left it was. It is
the same technique of being absolutely confidential and not discussing
the work we do. We operate using different systems, different
databases and nobody else has access to those, and not going and
discussing the work we are doing. It is nothing to do with anyone
1324. You mentioned that another part of Capita
also does appointments to non-government organisations
(Ms Cawley) Capita RAS.
1325. But you must have to supply information
or is it nothing at all?
(Mr Davidson) Capita RAS operates independently.
1326. It is a subsidiary company of Capita,
(Ms Cawley) Capita RAS was the former recruitment
and assessment services part of the Civil Service which was privatised
to Capita some 12 years ago.
1327. When you are doing your year end accounts
up to the main board, you have obviously got to become part of
the treasury operation passing it to up so Capita can do its accounts.
Do you not feel there could potentially be a big opportunity for
a clash along the line? You are dealing with an enormous amount
of people who you are trying to find positions for. We have seen
it in the City, we have seen it in all walks of life, including
government, where there could be. Have you ever had a problem
with this? Have you ever been accused of being incestuous?
(Mr Davidson) The answer candidly is no it is not
a problem, it is not expressed as a problem. Of course, you could
say if it was ever perceived as a problem we would not know about
it because we would not see the accounts anyway. That would be
the case. There are other kinds of conflict of interest that occur.
For example, you may be running a particular organisation, that
is fine, so then you may apply for a job, and at the same time
we are also doing some recruitment for you, so I know you in different
capacities. How do we deal with that conflict? We deal with that
conflict by treating relationships absolutely straight down the
line all the time. If we did not manage to do that successfully
I do not think we would have much of a business nowadays.
1328. Do you have any retainer fees from the
government at all, from any department?
(Mr Davidson) No.
1329. It is all negotiated on an individual
(Ms Cawley) With some departments we have historically
had framework agreements where we have agreed a certain price
for them, but they are not exclusive agreements and there is no
1330. Would that be on executive appointments
so they would say we are going to need six members of an NHS trust
and you would say we will do a job lot on six, is that what you
(Ms Cawley) It is more on the basis of department
X will have a core contract agreed with us and perhaps two other
recruitment consultants, so we have a better chance of getting
that work because there are only three people on the approved
list, so we offer a discounted rate.
1331. Okay, how many people do you employ?
(Mr Davidson) 100 people in total.
1332. You have got offices in Wales, Scotland
and Northern Ireland?
(Mr Davidson) Veredus has 100 people in total. The
Capita RAS combined operation is somewhat larger than that. We
have a variety of offices around the country.
1333. In Scotland and Wales and Northern Ireland?
(Mr Davidson) Yes.
1334. They all tend to deal with Scottish appointments,
Welsh appointments? Obviously this crosses borders but if there
is a requirement for Welsh-speaking candidates you are more likely
to get them in Wales?
(Mr Davidson) They more typically will use local recruiters.
1335. Will they? They will go to a specific
headhunter, say, based in Cardiff?
(Mr Davidson) There is an increasing tendency to use
(Ms Cawley) We do have a Welsh-speaking colleague
in the team.
1336. I just used that as an example. I am sure
if you went to Cornwall you would have the same problem. Were
you involved, this is more for personal information, were you
involved in the selection of the head of the English Tourist Board
(Ms Cawley) No.
Mr Liddell-Grainger: That is all I wanted to
Chairman: We try to settle scores here as well
as conduct the inquiry!
Kevin Brennan: Apologies for missing the beginning,
I hope I do not repeat any questions. What objective evidence
is there that organisations which use headhunters get better top
people than organisations that do not?
Chairman: Perhaps give us the compressed version
of the longer answer.
Kevin Brennan: Did you already ask that?
1337. No, but I know it will be a big answer.
(Ms Cawley) I will give a very quick part of the answer,
it could be the amount of repeat business we get. People do not
have to use us; they believe there is an objective benefit to
them in using us.
1338. That is not objective evidence, that is
their subjective assessment of the fact that they need to use
you. What I am asking is is there any objective research which
shows the organisations which use you do better because you find
top people for them?
(Ms Cawley) I can quote one piece of research-based
evidence. The study carried out by the Bristol Business School
into the role of women in local government included quantitative
and qualitative research. One of the really interesting findings
is both male and female respondents who were chief executives
in local government felt that women had a better chance of being
appointed to chief executive jobs if recruitment consultants were
involved. So there is a sense you are adding value and producing
perhaps a better decision and a more diverse and therefore better
1339. Right, but is there any evidence anywhere
that you have seen that shows that organisations that use people
like you to get their top people come top of the league tables
for performance or improvement? We are looking at that as well.
In these objective assessments they do better because you have
added that value?
(Mr Davidson) I am not aware of any objective studies
into public sector appointments of that nature.