Examination of Witnesses (Questions 40-59)
Monday 15 March 2004
Mr Leigh Lewis CB, Mr Vince Gaskell, Mr Bernard Herdan,
and Mr Paul Pindar
Q40 Jon Trickett: The document which
you submitted really quite late to the Committee indicates the
scale to which effectively the public purse has had to pay funds
to Capita over and above the contract. The document does not have
a page number on. It is not a good idea to have reports with no
page numbers on. I think you will probably know the one I am referring
to. For example, in the current year we have paid almost £50
million over and above the contract to Capita. Is that right?
Mr Lewis: It is not right. It
is not over and above the contract. That is the total paid in
the year to 31 January 2004 to Capita for the provision of service.
It is worth saying in that context that the volumes that the Bureau
are now dealing with—
Q41 Jon Trickett: I am trying to establish
what the figures are rather than the reasons for them. It is right
to say, is it not, that the original Capita contract bid was for
£250 million? It is now running at £47 million a year.
The £250 million was over 10 years. Am I right in assuming
that the annual cost has doubled?
Mr Lewis: No. Perhaps I will ask
some of my colleagues to deal with the detail. That figure of
£47 million includes two types of payment. Some of it is
the ongoing payment for the delivery of the service day-by-day
and some items are one-off payments for changes that have been
made to the system.
Q42 Jon Trickett: I am going to come
to that in a minute. You ignored the advice of everybody around
you at the time the contract was let and it had to be one of the
most incompetently let contracts this Committee has seen certainly
since I have been on it. Above the table I was just referring
to is another table which refers back to paragraph 4.18 in the
original Report which shows £9 million-worth of payments
to Capita over four years culminating this year in a £4.25
million payment. Do I assume that that is a kind of penalty levied
against the public purse by Capita for the failure to specify
the contract properly in the first place?
Mr Lewis: No. It is not that and
while I do not want to pretend that with hindsight every single
issue that was discussed in the procurement process would be done
precisely in the same way again, I do not actually agree with
you that the decision to let the procurement contract was wrong.
Indeed, I think in many ways the Agency did follow good practice
in allowing bidders to offer innovative solutions, as the NAO
make clear, in asking the consultants to audit its procurement
process and finding the best in final offers and so on. Those
payments in the paragraph which you quote are for changes and
enhancements to the service. They are balanced off, if you look
at the paragraph immediately above, by payments by Capita which
are payments which have been made by Capita for failures in the
service over the period since the contract was let.
Q43 Jon Trickett: When the original bids
were being considered Capita's price, as is often the case with
Capita, was quite low relative to the other bidders. It has not
been analysed in detail here, but it is clear that Capita was
making assumptions along with yourself about the number of paper
applications which would be received, which were hopelessly optimistic
as it turned out. The other bidders had taken account of the fact
that there would be more paper requests and as a consequence their
price was higher. Capita's price, on your own acknowledgment to
earlier questioning, has now gone from £250 million to £380
million. By the end of the 10-year period it is going to be higher,
is it not, than the comparative bids? We got the highest tender
rather than the lowest in the end as it has turned out.
Mr Lewis: I think that is a perfectly
fair way of presenting the facts, with this gloss and this caveat.
Had one of the other bids been accepted at that time we do not
know what the price would have turned out to be for that bid because
what happened was that a fundamental change in the business process
was introduced, namely the decision to take most applications
on paper rather than by telephone and that fundamentally changed
the economics of this contract. It is indeed the case, as you
say, that other bidders had forecast higher levels of paper based
contracts and lower levels of telephone contracts, but none of
them had forecast anything like what actually materialised.
Q44 Jon Trickett: Have you ever heard
of a sprat to catch a mackerel? Are those not the normal business
contracts which consultants like Capita engage in? Should you
not be more rigorous in your analysis? They have landed a whacking
great mackerel.
Mr Lewis: The Agency engaged with
consultants precisely to look at and identify why the Capita bid
was so much cheaper than the others. Their Report did not call
into question any fundamental aspect of the Capita bid.
Q45 Jon Trickett: So that was okay then?
Mr Lewis: What is okay is that
the contract was properly let, after a rigorous evaluation, to
the company which appeared to be offering the best price.
Q46 Jon Trickett: Do you think, as it
appears from the evidence before the Committee, that over a 10-year
period you will have paid more to Capita than the rival bids were
at that stage, admitting that there may have been some modifications
to those as well?
Mr Lewis: Yes.
Q47 Jon Trickett: I want to move on.
Paragraph 3.5 is dealing with the same issue about the comparative
bids. I notice that PricewaterhouseCoopers included an identity
verification process and that was then included in the Capita
approach. Has that approach now been dropped?
Mr Lewis: Where we have moved
to more recently is the view that it would be right to ask the
registered bodies to take primary responsibility for the identification
process because they are in the best position to do so. It is
obviously very important indeed that we do everything to try and
ensure that the identification of applicants is accurate.
Q48 Jon Trickett: So the answer is yes,
the identity and verification process has been subsequently dropped
by the Agency?
Mr Lewis: No.
Q49 Jon Trickett: So it is now being
done by an applicant body, say the Boy Scouts?
Mr Lewis: At this point not. At
this point it is proposed that the primary responsibility for
checking identification should move to the registered body.
Q50 Jon Trickett: It is in the nature
of villains that they often use more than one name. Indeed, Huntley
used two names, his mother's name and his father's name. If the
identity verification budget is dropped, is it not a fact, as
I am told is the case even now, that if the school had not properly
taken up the verification of his identity; in other words, if
he had suppressed one of his names, the Bureau would not have
identified him at all or any such person who had done a similar
thing, for example produced a false address or used a pseudonym
for a time? If at the time at which a person was arrested and
charged and found guilty of a sexual offence they subsequently
changed their name and address and they were to fail to notify
their new employer or their new organisation that they had changed
it, this system actually will not identify that individual because
it simply relies on the truthfulness of the applicants and resourcefulness
and rigour of the Boy Scouts or of the school or whatever it is.
Is that the case?
Mr Lewis: I am very reluctant
to speculate on what would have happened if Ian Huntley had made
an application for disclosure under a system which did not exist
at that point. That is a hypothetical speculation and not a helpful
one. The Bichard Inquiry will comment on any issues which it thinks
are of relevance to that. It is worth saying, talking in general
of the identification process, that applicants for disclosures
have to submit a significant amount of identification evidence
which enables the registered body and the CRB to have as much
assurance as they believe it is possible to obtain, the person
for whom the disclosure is being requested, that it is actually
the person they say they are.
Q51 Jon Trickett: The fact of the matter
is that if somebody chooses to provide false information to the
body to which they are applying the Bureau will not have the access
to the data, nor would they seek to have access to the data to
find out that that was fraudulently filled in as a result of abandoning
the identity verification process? This is like leaving a barn
door wide open.
Mr Lewis: Applicants are asked
to provide two kinds of identity.
Q52 Jon Trickett: You are not answering
my question.
Mr Lewis: For example, one is
a passport or a recent utility bill etcetera. Significant
efforts are made to try and establish that the identity of the
person is actually the same as the name on the form for which
disclosure is being sought. It is very important to say that,
the NAO Report says it, the CRB process does not pretend to be
a 100% guarantee that any individual can be hired without any
risk. It is not. It does not absolve the employer of the ultimate
responsibility for that hiring decision. We will look to the Bichard
Inquiry to say whether in its view there are further measures
to be taken. For example, one that has been put forward is fingerprint
identity which is necessary to try and reduce still further the
risks of identity fraud.
Q53 Jon Trickett: You have abandoned
the effort to verify the identity of the individual applicant.
You are relying entirely on the people to whom you are applying.
Mr Lewis: On the contrary. I simply
do not accept that. We are seeking to strengthen the effort to
reduce to an absolute minimum the risk of identity fraud.
Q54 Mr Field: Mr Gaskell, can I come
back to the question I posed at the end of the Chairman's questioning.
You have had three-quarters of an hour to think about it. Would
Mr Huntley have been found out by your organisation or not?
Mr Gaskell: I think I have got
little further to add to what Mr Lewis has just responded to Mr
Trickett on that issue because these are all matters that Sir
Michael Bichard will be looking at as part of the inquiry.
Q55 Mr Field: Let us look at the general
position. What percentage of applications do you refuse?
Mr Gaskell: In terms of refuse,
we do not actually refuse disclosures. What we do is we issue
disclosures with relevant information about previous convictions
or local police intelligence, as appropriate. In all cases we
would do that unless there were particular circumstances which
would lead to an application being withdrawn, but they are so
very few and far between. If somebody applies for a disclosure
we will normally carry out the checks against the Police National
Computer and, as appropriate, involve local police forces in carrying
out the checks of their local systems and their local intelligence.
Q56 Mr Field: So if somebody was honest
enough to put all the information you need on their application
form which would allow you to say that he or she had beaten up
old people in residential care, you would write back and you would
not say, "Do not employ this person," you would just
say, "We couldn't confirm this person is a granny basher"?
Mr Gaskell: We do not make judgments.
It is not our remit to make judgments about the employability
of an individual. At the end of the day it is for an employer
to make that judgment.
Q57 Mr Field: You put this information
on your statement.
Mr Gaskell: The decision on the
information, particularly in relation to the Police National Computer
where it is conviction information that is still valid, would
appear automatically on the disclosure. Where it is local police
intelligence, that is a matter for local chief constables to decide
on the relevance of that data for the disclosure itself.
Q58 Mr Field: The only people who might
be prevented from employment after what is going to be £400
million-worth of taxpayers' money would be people who are incompetent
at filling out the form or people who were so dozey they do not
realise what they are telling you?
Mr Gaskell: I think there is an
implication behind that, Mr Field, that the only check that is
done is the disclosure check because, of course, the disclosure
service is only one part of any employer's actions that they would
reasonably take before choosing one.
Q59 Mr Field: It is now an expensive
part.
Mr Gaskell: I was going to go
on and say that what we have found from the research that we have
done is the value that registered bodies or the people who these
applications are lodged through with us put on this. Some 70%
of those, at the last time we researched into this in late autumn
last year, valued the service that we were operating for part
of their decision-making.
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