Examination of Witnesses (Questions 260-274)
13 DECEMBER 2004
LORD MCINTOSH
OF HARINGEY,
KEITH HILL
MP AND MR
ALASTAIR DONALD
Q260 Andrew Bennett: May I turn to Lord
McIntosh and this question about the audit that you referred to
at the beginning? Do you think that process was handled well?
It took six months before you decided there was a problem, it
then took six months to carry out the audit and it has taken you
a long time now to find a replacement chairman, has it not? Is
this speedy government?
Lord McIntosh of Haringey: We
had complaints. Representations were made to us in the first quarter
of this year. We set up an audit which reported, whose report
we published in June[2]
Q261 Andrew Bennett: No, I think it goes
back to May 2003 when CABE itself raised issues with you. It has
taken a long time.
Lord McIntosh of Haringey: I was
responsible for appointing AHL as the external audit on the complaints
that I received and I received these representations in the first
quarter of this year; I shall not be precise about the dates.
The appointment of AHL was virtually immediate, certainly within
weeks rather than months, and their report was published in June
of this year. The chairman resigned in July of this year and the
advertisement for the new chairman went out in August and the
appointment has been made and the new chairman joins us in December.
All of these things are too slow. You would not wish to have a
period of six months without a chairman, although we have had,
as you have heard, a very effective acting chairman in Paul Finch.
If there are complaints about our procedures, I do not think I
accept that they were slow and I certainly do not accept that
we did not do the right thing. I did not think you said so.
Q262 Andrew Bennett: On this question
of conflict of interests, is it not bound to occur with the development
community being pretty small and overlapping commercial interests?
Lord McIntosh of Haringey: The
phrase that the auditors used was "perception of conflicts
of interest". If there had been any evidence of wrongdoing,
then of course it would not have gone to independent auditors,
it would have gone to the police, but there were no allegations
of wrongdoing. Perceptions of conflicts of interest, yes, are
difficult, but I think Paul Finch was right in saying to you,
or it may have been Richard Simmons, that if you try to have commission
and design review committee members who had no commercial or financial
interest in any of the proposals coming before them, you would
have a very weak body of people.
Q263 Andrew Bennett: Do you think you
have the balance right?
Lord McIntosh of Haringey: We
have virtually completed the implementation of all of AHL's recommendations.
The only one which is outstanding that is down to DCMS is the
recommendation about reviewing the balance of the Board and we
shall implement this as new commissioners are appointed. I think
that we have acted impeccably, if I may say so, in acting on those
recommendations and CABE has as well[3]
Q264 Andrew Bennett: So you think eight
CABE commissioners connected to Stanhope is a reasonable number.
Lord McIntosh of Haringey: The
degree of connection with Stanhope varies very greatly indeed.
If there had been any doubt about any of the individuals who had
been named as being connected with Stanhope, then AHL would have
said so to us, but they did not say so.
Q265 Chairman: To continue this issue
of conflict of interests, obviously the whole of the audit arrangements
stemmed from concerns over this but ultimately the transparency
of the whole issue depends on commissioners registering their
interests.
Lord McIntosh of Haringey: That
is right.
Q266 Chairman: And also highlighting
them when a particular scheme is discussed so that they are not
party to those discussions.
Lord McIntosh of Haringey: That
is right.
Q267 Chairman: Can we all be confident
that happens? There was some suggestion that the problems which
led to the audit were because individuals were not necessarily
doing that.
Lord McIntosh of Haringey: I take
the view that you can have, if you do not have it already, a statement
of the recommendations made by AHL and the way in which they have
been implemented. The most important thing is not only that commissioners
and design review committee members should declare their interests
at the outset, but that they should continue to declare their
interest as they change and specifically they should declare their
interests about any particular issue which might be coming before
CABE and should not take any part in that. Those provisions are
certainly in place and all of these actions have been taken in
accordance with Cabinet Office guidelines.
Q268 Chairman: Do the commissioners at
any point have to confirm that they accept and understand the
Nolan principles? Is there any training for them in this? What
happens if they fail to register or to announce an interest and
take part in work in which they should not be involved? Would
they have to resign immediately?
Lord McIntosh of Haringey: The
answer to your first question is yes, we have ensured that they
understand the Nolan principles.
Q269 Chairman: Do they have to sign something?
Lord McIntosh of Haringey: Yes.
The answer to your second question is that we have a training
programme which will take place in the first quarter of next year.
I do not know that I can give the answer to your third question.
If there were any suggestion that any commissioner or design review
committee member had not declared a relevant interest, then of
course action would be taken. No such indication has been made.
Q270 Chris Mole: The government is moving
on apace in the growth and other areas with its sustainable communities
agenda; that is a lot of housing. How can we ensure that design
quality is not sacrificed in this process in the interests of
delivering new homes?
Keith Hill: That is, as they say,
a very good question. We begin by a restatement of the government's
very clear commitment to the highest quality of design in the
housing growth agenda. It is a matter of constant exhortation
by government ministers. You will be familiar with the Deputy
Prime Minister's enthusiasm for what he describes as the "wow
factor" in new buildings. More than that, we do constantly,
through guidance, indeed through legislation, because of course
you will be familiar with the fact that the new Planning and Compulsory
Purchase Act 2004 contains a clause for design statements, emphasising
the importance that we give to design. As I go around the country
speaking to planners, I emphasise to them that it is within their
power to reject applications on the grounds of inadequate design
and in the last 12 months, for example, ministers have called
in planning applications on the grounds of design on five occasions.
In a sense ministers are themselves demonstrating the importance
in practice which they attach to this matter. Beyond that there
is the issue of investment in local planning and the additional
funding which is going in via planning delivery grant, which is
designed to enhance standards. CABE itself, of course, does tremendous
work in terms of training in design skills; something of the order
of 4,000 days of training for professionals, decision makers and
lay persons, the majority focussed on local authorities. At a
whole variety of levels we are conveying the message of the critical
importance of design.
Q271 Chris Mole: The Committee is aware
that one of the department's concerns in trying to meet the volumes
of new housing is about the skills shortages in construction.
You have been encouraging modern methods of construction in order
to address some of these issues and to improve quality, but CABE
have not been too complimentary about the design quality of resulting
schemes which have followed this approach. Has this caused you
to think twice about encouraging modern methods of construction?
Keith Hill: No, it has not. We
see enormous benefits in terms of costs, in terms of efficiency
and speed of delivery, in terms of health and safety in the work
place; in terms also of quality through modern methods of construction.
I do recognise the issue you refer to and which you tell me CABE
has raised. The important thing to bear in mind is that the great
majority of the costs of a building lie actually in the structure
of the building behind the fabric of the building, behind the
externalities of the building. We are very enthusiastic to ensure
that those who are involved in off-site manufacture themselves
recognise the opportunities in terms of materials, in terms of
design, to produce something which is of high quality. I know
it can be done because in one of my relatively rare foreign ventures
in September of this year I went to Germany to see some practical
examples of modern methods of construction. The Germans are very
good at this. I saw exactly what a huge variety is available in
terms of design through methods of off-site manufacture. It can
be done, but we are very keen to ensure that it is done. Mass
production does not necessarily mean monolithic design.
Q272 Chris Mole: Far be it for us to
justify our foreign ventures as well, but we too saw some good
examples of MMC in Singapore.
Keith Hill: May I say that as
soon as I began going down that particular path I knew that I
was into sensitive terrain and I want to assure you that there
was absolutely no direct implication in my observations.
Q273 Chris Mole: "You set `em up;
I'll knock `em in." CABE was touching on some of the concerns
which have been expressed to us about design quality in PFI. Putting
a PFI bid together is a long and complex procedure and a lot of
people who do it feel that it is very difficult. Do you think
there is enough opportunity on top of all that to encourage them
to put good design quality through the Office of Government Commerce
into PFI projects?
Keith Hill: Again I recognise
the issue and in my own journeys in England the problem has been
represented to me from time to time. Let me say that work with
the Office of Government Commerce shows that all procurement routes
can produce well-designed outputs, if done well. In other words,
it is not the method, it is the way you apply it.
Lord McIntosh of Haringey: And
of course the fact that under PFI those who are responsible for
construction have to be responsible for maintenance in the following
years ought—and I am not saying it always does—to
encourage them to have a design which is sustainable; that is
one of the criteria for good design.
Q274 Chairman: Could you think of any
examples of good design for PFI schemes which you might point
to?
Keith Hill: May I write to the
Committee?
Chairman: On that point I thank both
ministers very much for their attendance.
2 The first complaint was received at the end of January
2004, the second at the beginning of March 2004. Back
3
The only outstanding recommendation from the AHL report for DCMS
is the one that "DCMS should review the balance of the Commissioners
active in the industry and those from an independent but relevant
background" (para 17.5). Back
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