Examination of Witnesses (Questions 60-79)
Monday 14 June 2004
Mr Martin Narey, Mr Phil Wheatley, Mr Gareth Hadley,
and Mr Robin Wilkinson
Q60 Jon Trickett: For one reason or another,
either through sackings or medical retirement, and the levels
of absenteeism are continuing at levels which are far too high
and nowhere near the target of nine days.
Mr Narey: That is correct, but—
Q61 Jon Trickett: Is the tool of sacking
people effective or not?
Mr Narey: It is just one of the
tools, but yes, I think it is because the numbers of people who
we dismiss have risen. The numbers of people who we medically
retire have fallen. If you drew the trend line of the fall in
medical retirements set against the significantly increased workforce
over that period, there would be a much steeper fall. The proportion
of people who have been medically retired is now significantly
less than it was five years ago.
Q62 Jon Trickett: I want to go back to
paragraph 2.26. The previous time we looked at this matter, one
of the issues was the cost of dismissing somebody fell, I presume,
to the Prison Service, whereas the cost of retiring them did not
fall to the Prison Service. It fell to the pension fund. This
Report does not really relate back to that particular issue but
it does give a very interesting detail in the final sentence of
paragraph 2.26: "The Prison Service estimates that it typically
costs £17,000 to dismiss someone for medical inefficiency."
That is supplemented by footnote 16 at the bottom. It appears
that we are paying people £17,000 when we sack them, on average.
How is it sacking somebody when we are paying them?
Mr Narey: Because if you sack
somebody because of their inability to do the job because of their
ill health, you have to pay them compensation. That is something
we are forced to do. The Prison Service has paid £5 million
in total, in compensation, to fund dismissals for medical inefficiency.
They have saved the Treasury £22 million in pensions, so
it is a very good deal for the Exchequer.
Q63 Jon Trickett: Instead of sacking
people, we are compensating them. Footnote 16 goes on to say that
the £17,000 is only a part of the cost of sacking somebody.
There are management costs, occupational health costs and legal
costs in each and every case. Do you have an estimate as to what
those additional costs are in addition to the £17,000?
Mr Hadley: I am not able to give
an estimate now. It will vary on a case by case basis, dependent
upon how much work has had to be put in in managing the case through
to determination. I will see if we can provide Mr Trickett with
the information in due course.[5]
Perhaps I can refer to Mr Trickett's point concerning compensation.
It has to be borne in mind that the people we are terminating
due to ill health and poor attendance are not being sacked for
misconduct. They are genuinely ill. They are unable to render
effective service to the Prison Service. However, they do not
meet the requirements of the principal Civil Service pension scheme
for ill health retirement. In such circumstances, under our rules,
they are compensated.
Q64 Jon Trickett: Most people in the
rest of the world think that when you sack somebody you sack them.
You do not compensate them for being sacked. I wonder if there
have been any dismissals for people who are simply at variance
with their contract of employment because they have taken too
much time off, without compensating them, because that I am sure
was the intention of the Committee when it was asking for more
sackings to take place and more dismissals. I do not think it
occurred to many people, when Mr Narey was speaking a few minutes
ago to the Chairman and others, that you sack six people a week
but you are paying them £17,000 a piece. How many people
have you actually sacked?
Mr Hadley: We have sacked the
number that Mr Narey referred to.
Q65 Jon Trickett: Without compensation?
Mr Hadley: We pay compensation
under Civil Service compensation rules. These are not people who
have been found blameworthy of misconduct. These are people who
are genuinely ill and I would hold that most employers would treat
somebody who is—
Q66 Jon Trickett: It is a cop out.
Mr Narey: It is what this Committee
urged me to do five years ago.
Q67 Jon Trickett: It is weak management.
I am the first person to argue that if somebody is really ill
they ought to be properly looked after, cared for and properly
compensated, but that is not sacking somebody. That is terminating
their employment because they are medically unfit to serve and
that is fair. For you to come here and say you are sacking six
people a week smacks of robust management but the fact of the
matter is this is not robust management. This is a cop out. How
many people are sacked, to use the term "sacking" in
the common use of the term as I would in one of my local working
men's clubs or pubs?
Mr Narey: Sacking for all purposes?
Q68 Jon Trickett: No, for taking time
off without leave.
Mr Narey: I think you want to
know which of those are paid little or no compensation.
Q69 Jon Trickett: Yes.
Mr Narey: We would have to provide
you with that information.[6]
Q70 Mr Allan: The distinction perhaps
was between those unfortunate souls who have a long term illness
and they are not up to doing the job and are therefore dismissed
and those who are malingerers and therefore, in a sense, have
carried out misconduct. When you used the word "sacking"
I was a bit surprised because I do not think this table refers
to people who have been sacked in the sense that I would understand
it. Sacking is a misconduct kind of offence. If you have figures
for people who are deemed to be malingerers and then are dismissed
presumably without compensation for that, that would be very interesting
to know.
Mr Narey: I am very happy to provide
them.[7]
Q71 Mr Allan: Referring again to these
people who have been dismissed because they have ill health which
means that they cannot carry out the requirements of what is a
stressful and physically demanding job, you referred to the difference
in cost. This has cost you £5 million as opposed to the £22
million it would have cost the Exchequer via the Civil Service
pension scheme if all the same group had been given early retirement
on medical grounds. Is the incentive from your point of view just
the fact that you are being a good citizen or do you get a cash
incentive for doing that? This is going to be something across
the Civil Service, is it not? It is something we want to tackle
everywhere.
Mr Narey: There is no cash incentive
to me or to Mr Wheatley's budget at all. We do it because we need
to move people from our books. From a strictly parochial point
of view, if somebody has been off sick so long that they have
ceased to be getting half pay, it is cheaper just to leave them
but we want to move on. We need to recruit new people in their
place. As this Committee pointed out five years ago, overall,
simply medically retiring them is a very significant cost to the
public purse. We have sacrificed £5 million for savings of
rather more than four times that figure.
Q72 Mr Allan: As the head of the Prison
Service, it would be easier and cheaper for you on a parochial
basis to carry on with the medical retirements. The rules still
create that kind of framework.
Mr Narey: Yes, they do.
Q73 Mr Allan: That should be something
of concern, surely, to us?
Mr Narey: I do not dispute that
I, as an accounting officer, and Mr Wheatley, as an agency accounting
officer, have a wide responsibility for spending public money.
The case is so well made in terms of wider savings. I think it
was the proper thing to do that we should move staff on, but there
is no financial incentive to do so.
Q74 Mr Allan: You are just being a good
corporate citizen?
Mr Narey: I would like to think
so.
Q75 Mr Allan: Can I ask about the comparators
between the different types of establishment or rather between
your establishment and establishments elsewhere? In paragraphs
2.13 and 2.14 on page 13 of the Report, we refer to comparable
Scottish figures and private sector figures and Irish figures
as well. The Irish figures are comparable but the figures for
both the Scottish Prison Service and the private sector are significantly
better, 12 point something rather than 14 point something. How
do you respond to that?
Mr Narey: The figure for the last
complete financial year, which is recorded in the Report, dropped
to 13.3. That is the most recent figure for the Prison Service
in England and Wales. There is some indication that that is continuing
to fall. We are pretty confident that the 12.5 target will be
hit this year. We are very much level pegging with the Scottish
service. We are now very similar to the figures from the private
sector. Significantly, five years ago, the average recorded in
the private sector prisons was about three or four days a year.
As their workforce has matured, as they have gone through the
employment honeymoon one gets because new staff do not take much
sickness, it is significant that their sickness rates have moved
towards ours. I have every hope that the two might cross next
year or the year after.
Q76 Mr Allan: Those figures depend on
us assuming that they are now accurate. If we look at table five
on page 11, we have this wonderful chart there which shows us
what we assume to be the actual figures and then some adjustments
for under-reporting that is assumed to have taken place in the
past and has now gone. Are you absolutely confident that you are
sitting here before us now with the accurate figures?
Mr Hadley: We have paid substantial
attention to cleaning our data and we are confident that the figures
are now accurate. The Comptroller and Auditor General, in preparation
of this Report, has checked that and our own internal audit likewise
has recently audited and found satisfactory our procedures. We
are confident that the figures we present to you today are accurate.
Q77 Mr Allan: We are told that one of
the key changes has been the implementation of the personnel system
which I assume is the personnel management system and, in paragraph
3.20 on page 22 we are told that everybody is now using this personnel
system but also 61% of prisons still keep manual records. Why
do they keep manual records if they have a very good computerised
system?
Mr Hadley: We have improved significantly
the personnel system, the IT system, and this now gives to each
governor a detailed monthly report of sickness absence, including
exception reporting. Likewise, that is supplied up the management
line within the Prison Service. The information is available.
Presumably, some managers wish to keep manual records in addition
because they might find it more useful in terms of use within
their own management organisations.
Q78 Mr Allan: Do the monthly reports
that are produced fall in line with table 16 on page 23 which
lists the good practices in monitoring sickness absence and from
the NAO there is a check list of items that should be in those
reports? Are you confident that you are now delivering all of
that?
Mr Hadley: There are something
like three reports delivered to managers every month and they
cover all of these issues.
Q79 Mr Allan: Mr Wilkinson is nodding
to say yes. The other area I am interested in looking at is the
question about the targets. Mr Narey, I think you referred to
the fact that there are huge differences between different types
of prisons. Do you set different targets for the governors of
each type of prison? For example, rather than saying to all of
them nine days, do you say six days to the easy ones and 12 to
the difficult ones?
Mr Wheatley: It makes sense to
have targets that locally are achievable, though challenging,
and that needs to take account of the different establishments,
the different strain they are under, the different processing,
whether they are going for a major change this year, are they
starting with a very old staff. Age also affects the rate at which
sickness is taken. It is not just strain. The age profile makes
a substantial difference. We take account of that and set targets
that are challenging for each governor, based on that reality.
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