Examination of Witnesses (Questions 20-39)
Monday 15 December 2003
Mr Mike Eland, Mr Len Morris, and Mr Kevin Franklin
Q20 Jon Trickett: Why did that happen?
Mr Eland: I would point out to
you that it was not something which was found, it was something
we ourselves were unhappy about. We commissioned the report, we
have acted upon it.
Q21 Jon Trickett: I want to ask the Treasury
the following question. Paragraphs 2.7 and 2.12 clearly illustrate
points where the department failed to take account of Treasury
guidelines. What action does the Treasury take under those circumstances
with an errant department, as we clearly have here?
Mr Glicksman: Paragraph 2.12 refers
to Treasury guidance we issued in February of this year and the
department did implement it by May. It is not as though they were
deliberately flouting the guidance.
Q22 Jon Trickett: It sounds to me as
though they were certainly flouting it. In the other matter, the
failure to do a sensitivity analysis, which still has not been
produced now, is clearly flouting Treasury guidelines, or are
you all in it together as a kind of Mafia operating between the
Treasury and the spending departments not to enforce rules which
you have brought in? What is the point of having rules if you
will not enforce them?
Mr Glicksman: No, not at all.
If I take the two in order, the one I was referring to in 2.12,
the procedure there is that this requirement will be looked at
when the project goes through a gateway review and if the gateway
review finds that they do not have satisfactory management procedures
in place, such as the ones which are contained in this guidance
from Treasury, that would be flagged up at the time for the accounting
officers.
Q23 Jon Trickett: I notice you are choosing
the easier of the two paragraphs to defend. Paragraph 2.7 is a
much more serious case because the figures are wobbling all over
the place. It should clearly have been subject to—
Mr Glicksman: I was going to come
onto that one. The procedure would be for a project which is outside
the department's delegation, they would need Treasury approval
to it. In getting Treasury approval they would need to put forward
a business case and in looking at the business case the Treasury
would look to see whether the business case had complied with
the Treasury's guidance, with sensitivity analysis and all the
other elements which are required there and if not go back to
the department and expect the department to put it right.
Q24 Jon Trickett: Have you had your hand
slapped then? It does not sound as though it was a good spanking;
it sounds rather a mild rebuke at the best from the Treasury.
Mr Eland: May I come in to clarify
a point here? In paragraph 2.7 the issue there is that we have
produced an outline business case and we are working to produce
a full business case. As part of the full business case we will
incorporate the sensitivity analysis which is required.
Q25 Jon Trickett: The sentence says "The
Department have not subjected the estimated financial benefits
in the outline business case to sensitivity analysis". That
is what it says. I think what this Committee will be concerned
about is that first of all the department has failed in three
separate counts on one page to follow normal practice. Secondly,
the Treasury seems to have some rules which you are able to evade.
Thirdly, the Treasury itself seems to have no enforcement procedures
in relation to these matters.
Mr Eland: The senior responsible
owners were appointed for each of the sub-programmes. It was simply
that we did not have an overall senior responsible owner. We did
have control over the particular projects. As the second part
of the sentence in paragraph 2.7 indicates, we will be producing
this for the full business case, which is what is required.
Jon Trickett: I am sure we would not
go into battle in Iraq with an army full of lieutenants and no
generals. It is rather a strange way of managing the system.
Q26 Jim Sheridan: Given the background
of increased terrorism and smuggling, a very basic question: do
you think the department is properly funded?
Mr Eland: Yes, I believe we have
funding to cover all our principal activities which we are engaged
in, which does include the detection of terrorist weapons at the
frontier. We have been given additional funding under the Cyclamen
project to carry out anti-terrorist checks.
Q27 Jim Sheridan: Do you have any improvements
you would like to see implemented and perhaps be funded?
Mr Eland: No. We can put forward
a case for improvements both in terms of revenue or in terms of
anti-terrorism in the spending rounds and we would do so.
Q28 Jim Sheridan: Page 18 talks about
a call centre linked to a networked information system. Is the
call centre based in Britain?
Mr Eland: Yes, it is.
Q29 Jim Sheridan: The reason I ask is
that several commercial companies are now seeing the problem of
having call centres based abroad. There is no intention for the
call centre to be placed anywhere else given the sensitivity of
your business.
Mr Eland: No, none at all. No,
we have no intentions to do that.
Q30 Jim Sheridan: Finally a staff question.
I understand that Customs and Excise have a policy different to
others in the sense that people are asked or forced to retire
at 60. Is that the case?
Mr Eland: That has been the case;
we are changing our policy to allow people to stay on in accordance
with the general changes in retirement policy.
Q31 Jim Sheridan: So those employees
who are 60 or over, if they so wish, can stay on.
Mr Eland: Yes, we will be introducing
that.
Q32 Jim Sheridan: The reason I am asking
is because I see also in the Report that you talk about the lack
of experience of staff. I have anecdotal experience of people
who work for Customs and Excise being forced to leave their employment
simply because they are 60.
Mr Eland: It has been in the past
that, in common with the rest of the Civil Service, we have operated
a retirement age of 60. We are moving to change that to allow
people to stay on.
Q33 Mr Allan: May I start with a couple
of points about the general way in which the IT programme works
for you, in particular start with the gateway review which has
already come up. Is it right that all of the IT projects which
Customs and Excise now do go through the gateway review process?
Mr Eland: Yes, that is right.
Q34 Mr Allan: From your point of view
is that a positive development? Are OCG helpful friends?
Mr Eland: We find it a useful
process. It is a discipline process, but it is one where we find
a number of useful pointers are identified.
Q35 Mr Allan: Can I ask about your internal
policy? The gateway review does not mandate to individual departments
what they should do. In other words if they offer you a red light
or an amber light you could proceed anyway. Do you have an internal
policy on what you should do? In other words, do you internally
say you must wait until you have the green light from the gateway
review before proceeding?
Mr Eland: Certainly if we got
red lights we would see that we had to take action to correct
whatever had been identified as the weakness. We would then work
through to the next gateway to ensure that we got a better scoring
at that point.
Q36 Mr Allan: That is quite clear. You
would not expect anything to proceed which was red lighted.
Mr Eland: I do not think we would.
Mr Morris: We address it on a
risk by risk basis. Early in the programme we required dual keys
to be turned to release our funding. We were doing early work
on the programme, we went through a gateway review and received
a red since the keys had not been turned. In discussions with
Treasury we felt that they would be turned very soon and proceeded
with roughly two and a half months of work at risk and the keys
were then successfully turned. That red light then became amber
and eventually green.
Q37 Mr Allan: So you have carried on
with the work.
Mr Morris: On a risk by risk basis.
Q38 Mr Allan: That is at an early stage
rather than a late stage.
Mr Morris: Yes. We would not go
live with an application if there were any risk of the quality
of that application.
Q39 Mr Allan: Anything from the gateway
review which was still red or amber would to you be a significant
risk.
Mr Morris: Absolutely.
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