Examination of Witnesses (Questions 40-59)
CABINET OFFICE,
HM CUSTOMS AND
EXCISE, DEPARTMENT
OF TRADE
AND INDUSTRY,
DEPARTMENT FOR
CULTURE, MEDIA
AND SPORT,
AND HM TREASURY
8 NOVEMBER 2004
Q40 Jim Sheridan: How
will you find out?
Ms Taylor: We will see that claims
go wrong and MPs will write to us or we will see through the monitoring
that claims are not going through as fast as they might do. I
do think there is an incentive on the stakeholders to share their
risks with us. We also ask new contractors to do a risk workshop
and analyse the risks they are coming up with because there is
no point them thinking there are risks over there, when we think
they are over there. We should be sharing our risk registers.
Q41 Jim Sheridan: I am
thinking along the lines of awarding contracts, orders, manufacturing
orders to contractors, I am not thinking about the compensation.
If we award contracts to individual contractors to do a particular
job, how do you evaluate how well they are doing and what is the
incentives for contractors to come back and say "We don't
have enough money" or "The programme has gone wrong"
or "The process is slipping" etcetera? How do you evaluate
that?
Ms Taylor: You can write requirements
for working together on risk into your contract terms, which is
what we are looking at doing, just as you write operational workshops
once a month into your contract requirements. Then you need to
monitor it through the targets you set, the agreements you have
with them about what their monthly outputs will be and if things
are going wrong, if you have created a sense of openness and common
purpose, the experience has been that they do tell you.
Sir David Omand: May I add here
that as part of our programme, we have been working very closely
with the Office of Government Commerce about the guidance that
they give to departments who are entering into major contracts
and the way in which those contracts can be incentivised? I think
it would be fair to say that the prevailing wisdom at the moment
is that a co-operative relationship between the contractor and
the supplier, in which there is transparency of information, is
in the interests both of the contractors, so that they can deliver
well and earn the additional bonuses that are in the contract
for good performance, and on the department so they can spot trouble
early. We had a very good example of this from the project manager
for Terminal 5 at Heathrow which is using novel contracting methods
in order to try and incentivise the contractors and not have a
stand-off relationship where, too late, you discover that something
has gone wrong, by which time the cost of putting it right is
very high.
Q42 Jim Sheridan: May
I perhaps push you on just a bit? The Chancellor has announced
thousands of job losses amongst civil servants. Has a risk assessment
been carried out on exactly how that will impact on delivery of
public services?
Sir David Omand: Yes, that has
been done by the efficiency team in the Office of Government Commerce.
Q43 Jim Sheridan: Do you
not foresee any major risks in terms of these job losses or jobs
being relocated throughout the country?
Sir David Omand: There are many
risks associated with a major change of programme, both a programme
that involves relocation and that part of it which involves transformation
of back office services and smarter procurement, lots of risks.
The important thing is to recognise what those risks are and to
ensure that individual departments as they produce their reform
plans really have taken account of them and are not just flying
blind in the hope that the risks will somehow not materialise.
There are risks; there are always risks in any major initiative.
Q44 Jim Sheridan: Finally,
is there any public involvement in these risk assessments or evaluating
how we are delivering? Do you involve the public at any stage?
Sir David Omand: That would be
case by case, depending on the individual type of programme. I
do not know whether my colleagues have any experience of putting
that deliberately into public consultation.
Mr Pullinger: The Food Standards
Agency, when discussing food risks, does that at board meetings
which are held in public. They're webcast, the public gets a chance
to feed into their policy decisions, whether it is the risks of
eating salmon, or baby foods, and they are a very good model,
and we use them as a model, of openness and engagement with the
public on risk issues. It seems to work very well. They have increased
their trust ratings in food safety and in the Food Standards Agency
itself.
Sir David Omand: I have to say
that in many other areas we are working in a highly political
environment and whether governments of any party would really
want to see full risk registers for every initiative being published
. . . Perhaps it would do risk management a great deal of good,
but we are operating in a political environment.
Q45 Mr Steinberg: Mr Pullinger,
what risk assessment has been made on the number of jobs that
are being transferred to India from National Savings by Siemens
business?
Mr Pullinger: I am afraid we do
not have the case study people here today and I am not sure whether
it was covered in the NAO Report.
Q46 Mr Steinberg: It is
not.
Mr Pullinger: I am afraid I do
not have a direct answer to that.
Q47 Mr Steinberg: I am
not surprised.
Mr Pullinger: I know it is an
issue that they have been addressing and that it was a difficult
decision for them to take.
Q48 Mr Steinberg: Stop
waffling. You do not know.
Mr Pullinger: That is what I know.
Q49 Mr Steinberg: So I
can go back and say to some of my constituents that the Head of
the Risk Support Team does not know what risks are being taken
regarding loss of jobs in my constituency. I would have thought
that was a very important issue, but never mind.
Mr Pullinger: If I might just
comment on that, the Risk Support Team's job is to improve the
capability of government overall to handle this. We do not try
to be au fait with all the risks that are being handled
all around government. That is for those departments and the experts
in those departments to know about.
Q50 Mr Steinberg: A follow-up
question to Mr Sheridan's on a subject which is not in the Report.
When is the CSA going to combine their past payments to the present
payments system, because at the moment it is totally unfair? People
are paying different amounts in the same circumstances, and frankly,
the department has had long enough now to solve the so-called
problems. I really think it is about time that we are told, once
and for all, when the two systems are going to be joined together.
Sir David Omand: Those who run
the CSA will have noted what you say, but we do not.
Q51 Mr Steinberg: Can
I take it that you will write to us on this?
Sir David Omand: I will ensure
you receive a reply.[1]
Q52 Mr Steinberg: I want
to turn also to the points Mr Trickett was making about the coal
compensation payments. I, like him, have a constituency with a
lot of ex miners and one of the main issues I get in my postbag
is compensation payments. I have to say that when I do contact
the department they are very helpful and very good. What frightened
me to death when I read this Report was that page 11, paragraph
4 tells us "The Coal Liabilities Unit retains overall management
responsibility for the liabilities, but the schemes are operated
by a network of contractors, including Capita". Is that THE
Capita?
Ms Taylor: It is.
Q53 Mr Steinberg: Is that
not a risk in itself?
Ms Taylor: Capita took over our
claims handler in January this year. I have 1,500 people mainly
in Sheffield handling the claims. The Department does not handle
the claims, a contractor handles the claims. They are called IRISC
and they were previously owned by the AON group. Capita took them
over in January. We did do diligence checks.
Q54 Mr Steinberg: Can
I tell you that my only dealing with Capita was to try to talk
to somebody in charge, somebody with a bit of authority in Capita
and I was told they could not give me a name, they were not allowed
to. Then I asked if they could give me a name to write to and
they said they were not allowed to give out any addresses. Are
miners going to get exactly the same treatment as I got when I
was trying to deal with Capita who worked for Westminster Council?
Ms Taylor: I hope nobody in my
bit of Capita gave you that advice.
Q55 Mr Steinberg: No,
it was at Capita who work for Westminster.
Ms Taylor: In my area, there are
rules about replying to correspondence. Capita have a unit in
Sheffield replying to MPs' correspondence, which most MPs find
very helpful. Certainly Capita have taken on the claims handling
company with enthusiasm and they are helping us with the World
Class efficiency project which we have got going.
Q56 Mr Steinberg: I suggest
you keep a very close eye on them, to be honest. It is a good
job Mr Field is not here, otherwise he would probably go to town.
I have to say that I was a little worried when I saw that they
were involved. How do you know, for example, that they actually
manage the risks properly?
Ms Taylor: Through the process
I was talking about earlier. We share our risks, we have targets
and we look to see how they are performing against their targets.
Q57 Mr Steinberg: You
have no difficulty in talking to them. Will they give you a name
to talk to?
Ms Taylor: Absolutely; yes.
Q58 Mr Steinberg: Perhaps
you could pass the name on to me.
Ms Taylor: The IRISC people who
are our claims handlers have a unit for MPs, handling MPs' correspondence.
If you have any concerns, please get in touch with that unit.
I can give you the name and give you the contact.
Q59 Mr Steinberg: That
is good; excellent. There are still many hundreds of claimants
in my constituency—it could be thousands—who are still
waiting for a settlement. How long do you think it is going to
take before everybody is dealt with?
Ms Taylor: We are discussing with
the judge at the moment—because the judge is still in charge
of the scheme—quite radical proposals to change how the
compensation is paid out, so that we shorten the process. We had
a huge surge of claims in the last six months; the scheme more
or less doubled in the last six months, so a lot of people who
still have outstanding claims have not had them in for very long.
If we go ahead with the proposals we are putting to the judge,
we are probably looking at another four to five years for finishing
all cases.
1 Note by witness: The new child support scheme
was introduced in March 2003 for new cases and those old scheme
cases linked to a new application. There have been some well documented
problems with the new IT system. The Child Support Agency is working
with EDS, the IT supplier, to resolve these problems. The Department
is keen that all the Agency's clients should benefit from the
reforms as soon as possible. A decision on the transfer of old
scheme cases will only be made when the Department is satisfied
that the new scheme is working well. As it stands, money continues
to flow under the old scheme to children. The Department is not
willing to risk that flow of money and put at risk these cases
by bringing them across before it is sure the new system is robust.
Once a decision has been made on transferring old scheme cases
to the new scheme, the Secretary of State will make an announcement. Back
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