Department for Constitutional Affairs - Health Committee Contents

Examination of Witnesses (Questions 1-19)


17 OCTOBER 2006

  Chairman: Mr Allan, Ms Moorhouse, Mr Clark, welcome. I had better warn you that we are anticipating a vote fairly soon, which I hope might be the only one during the time that we have in front of us. But it is in the interests of democracy, in furtherance of which we declare any interests we might have that are relevant.

  Keith Vaz: I am a practising barrister.

  Q1  Chairman: In that case, can I start by referring to the fact that the annual report talks about the "reorganisation of the centre of the Department." What does that mean? Does it mean improved performance?

  Alex Allan: That is certainly the intention. The main element in the reorganisation was avoiding the duplication of having a separate criminal justice unit within the Department and also a separate capability within what was then the court service, now Her Majesty's Court Service, so actually moving that category into HMCS so that both the policy and operational advice comes from the same source and at the same time setting up a quite small strategy function in the centre that looked at strategy across the Department, covering all the different elements which Rod Clark heads up. There were a number of changes like that, but that was the biggest change. We moved a few staff, a Legal Aid team, in the Department to the Legal Services Commission so that they could, again, combine policy and delivery in a way that we hope will improve performance.

  Q2  Keith Vaz: You have now been in post for two years, Mr Allan. What do you see as the key changes undergone by the Department in that period?

  Alex Allan: The key changes have actually been the structural changes that we have made, in particular the absorption of the Magistrates' Court service to create Her Majesty's Court Service in April 2005, which more or less doubled the size of the Department in terms of manpower. The other change that is more recent has been absorbing a number of quite large tribunals into the new Tribunal Service from April 2006. I think those have been much the biggest changes. The other change that I think is still ongoing but is very significant has been the struggle, which started well before I arrived, to get a new framework for Legal Aid to try and ensure that we have Legal Aid spending within the resources available to us, and that has proved much harder then we expected. Eventually, as you know, we set up the review chaired by Lord Carter of Coles, who reported in July, and we have just finished the consultation period and we will move to the consultation responses and take forward the implementation, but that going forward is going to be a very significant change, both to the Legal Services Commission and, of course, to the suppliers.

  Q3  Keith Vaz: It is a profound change, is it not? It is quite a different Department to the one that your predecessor ran. Do you think that there is now a vision of what the Government want to achieve as far as the DCA is concerned?

  Alex Allan: We have found that the vision which the Lord Chancellor set out under the theme of Justice, Rights and Democracy is a very powerful one and one that has provided a clear unification for the vision for the Department, and indeed, our capability review, which started earlier in the year but was not published until July, identified that as one of the strengths, that we did have a clear vision across the Department. It also rightly identified some areas that—as you indicate, we have changed massively and that imposes quite big challenges for us in terms of actually delivering what we want to deliver. So we know where we want to go but we are still conscious that there is a lot still to be done.

  Q4  Keith Vaz: You have no doubt visited all the various offices in Selborne House. Have you been to every one, and have you found anything surprising in any of these offices, things that you never thought should be there?

  Alex Allan: The Department has a range of functions which, I must confess, I was not initially aware of, like keeping the roll of the baronetcy, but I do not think I have found anything otherwise. There are a lot of people in the Department who are very dedicated and work very hard. This was not just the centre; I have been and visited a very large number of courts and tribunals and other offices around the country and it is very impressive, the work that goes on in sometimes very difficult circumstances.

  Q5  Keith Vaz: Let us just examine the annual review in terms of the catchphrase that you mentioned, "Justice, Rights and Democracy". Is the Department there to provide more justice, more rights and wider democracy or are these to be contained? What is the point of that catchphrase?

  Alex Allan: Clearly, we want to provide a justice system and enable access to justice as widely as possible. We want at the same time to ensure that people's rights are upheld and we have an overall responsibility for—I was going to say "most" but that may be an exaggeration—of the democratic policy towards the democratic system, dealing with things like electoral issues and constitutional reform in terms of devolution and so on. We do span all that and, as I say, one of the things that is very striking to me has been that actually our work ... We are organised in a number of different units but they really do all work towards that end and have very important synergies. There are very important synergies between the criminal courts and the Legal Services Commission, for example, in terms of both how business is done and how much we spend. There are very important synergies, again, between the civil business and the family business and the Legal Services Commission. The tribunal business is quite closely linked into a wider concept of civil justice and the civil courts system. Issues like, for example, human rights, which is an important function carried out at the centre, and is something that obviously impinges on a lot of our business across the Department.

  Q6  Keith Vaz: Do you think you are ready to become the Ministry for Justice now that the changes have taken place and the Home Office is in retreat because it is not fit or purpose and your boss is a key player in the Government? Are you ready to become the Ministry for Justice?

  Alex Allan: So far as I am aware, that is not on the agenda. We have a big agenda ...

  Q7  Chairman: Nor was creating the Department in its present form.

  Alex Allan: We play a key role. We perform a number of the functions which in other countries are brigaded in ministries of justice. One of the important things is that we do work very closely with the Home Office and with the Crown Prosecution Service and, as you know, the Office for Criminal Justice Reform is an organisation that reports to all three Ministers and in practice all three Permanent Secretaries, and acts on the criminal justice side as the element that takes forward common policies and actually operates through, for example, 42 local criminal justice boards, which have representatives of the police, the prosecution, the court service, the probation service and so on, and do act locally to try and identify the problems that are holding up progress in each local area, and the Office for Criminal Justice Reform sets, for example, targets for each local criminal justice board, so our first PSA target, which we share with the Home Office and the CPS, is the number of offences brought to justice and that is then cascaded out into 42 different sub-targets.

  Chairman: We are going to return to those in due course.

  Q8  Keith Vaz: One final question on this, and that is judicial appointments. Have you lost everybody to the new body or are there still civil servants in your Department who deal with any aspect of judicial appointments?

  Alex Allan: Yes, there are still ...

  Q9  Keith Vaz: How many are left?

  Alex Allan: I do not have the precise number. I can certainly let you have it. What they do is co-ordinate the requests, because the process is that the Lord Chancellor in consultation with the Lord Chief Justice or whoever else as appropriate, has to ask the Judicial Appointments Commission to run a competition to produce so many district judges or so many asylum and immigration judges, and in order to decide what the numbers needed are, that is dealt with through the remaining civil servants at the centre.

  Q10  Keith Vaz: You do not know how many are left?

  Alex Allan: I can certainly find out.

  Q11  Keith Vaz: The vast majority have gone, have they?

  Alex Allan: Yes.

  Q12  Keith Vaz: There are just a few left passing on these requests?

  Alex Allan: Yes.

  Q13  Keith Vaz: But you can let me have the figures?

  Alex Allan: I certainly can.

  Q14  Chairman: You said a moment ago the integration of the court service had been a really central part of the changes that have taken place. That was accompanied by some chaos over the Oracle system. What were the practical consequences of the failure?

  Alex Allan: Perhaps I could ask Barbara Moorhouse as our Director General of Finance to address this. It certainly was something that in the—I was going to say "short term" but for some months caused us considerable problems because of a lack of financial data and problems over paying some suppliers. Barbara and her team, and particularly the court service but also other bits of the Department, worked very hard to bring things back on track and I was very pleased that we were able to get signed clean audit accounts at the end of the financial year, though I am sorry that meant that we were not able to lay them as early as we had hoped. If I may, I will ask Barbara to expand on that.

  Barbara Moorhouse: The problems with the Oracle system manifested themselves shortly after I came into the Department. The practical consequences of that were, firstly, that it caused quite a lot of disruption to the newly formed HMCS organisation in that they did not have management information, which for managers new in post was very disorientating. In very practical terms, the finance departments of both HMCS and indeed the DCA corporate finance departments could not produce information to guide the development of strategy within the Department in the way that we would otherwise have liked, and obviously just core management reporting, including budgetary control. It also meant that, instead of being able to introduce those new systems and improve the overall quality of management control and information in the Department, we went backwards for a period of time. What that meant was that we overall had a major exercise as well, which was not trivial either in terms of cost or management time, to recover the situation, which, as Alex has said, we successfully did in-year. Where we are now is that we have a clean audit opinion, we have recovered those systems and we are trying to go back to the original plot, which was, of course, to recognise that those new systems were intended to give us a much better basis for the control and management of the Department both strategically and financially, and we have plans underway now to capitalise on that investment.

  Q15  Chairman: Did everybody get paid on time?

  Barbara Moorhouse: There were some very practical consequences. We had some difficulty in paying our own staff from time to time because payroll issues were also caught up in the Oracle implementation, and we had some very practical issues which caused us a great deal of difficulty, with some magistrates for example, and suppliers in turn were also not paid on time. So all of those obvious examples of a major systems failure did cause us difficulties and we remedied those by working very closely with our stakeholders and trying to make sure that we managed communications as effectively as possible while we brought the project back on line, but that was a substantial commitment of time to make that effective.

  Q16  Mr Khabra: Coming to financial management, your finance team has been arranging training courses on financial management. How many of your staff have so far attended these courses and what has been the feedback from them?

  Barbara Moorhouse: We have undertaken a number of different training initiatives within financial management to try and improve financial awareness. We started at the top with producing "Money for Ministers", a booklet that went to our ministerial team. Within that, we then supported thorough training for the senior civil service and something like approximately 50% of our senior civil service grades have actually gone through that training programme so far. The courses are over-subscribed. We have also put people on them who are not technically senior civil service, because they have been incredibly popular. The feedback so far has been that this is information that people want to understand. I think there is a great deal of willingness to try and manage money more effectively within the Department, if we can give them the tools and the understanding as to how they should go about doing that. We have matched that investment with development of very specialist areas of financial training for particular areas, like lawyers for example, and court managers, and of course, we are investing quite heavily in improving the skills of my own finance team so that they can provide leadership to that growing financial and commercial awareness within the Department.

  Q17  Mr Khabra: Have you yourself attended this course? If so, what did you find particularly helpful?

  Barbara Moorhouse: I attended in the form of supporting in terms of introducing the course and trying to bring over to the participants some of the key issues within the Department. What I particularly valued from my perspective, because I obviously was not just a course attendee, was the opportunity to try and explain to a number of very committed managers the ways in which they could make a very practical difference in helping the Department to live within its budget, which was a challenge for us last year, a challenge that we met, and no doubt will be a challenge for us in the years to come.

  Q18  Chairman: As well as the problems you had with Oracle, you also had problems which were highlighted by the Treasury financial management review with something rather curiously called Liberata, which I understand is an out-sourced provider of—what? Financial services? What was Liberata providing and what went wrong?

  Barbara Moorhouse: Liberata are our out-sourced service provider. In simple terms, they take a number of the core processes within finance, for example, paying invoices and paying expenses, and those are done off-site at their centre, primarily down in South Wales. For some time the Department of Constitutional Affairs has had this out-sourced shared service arrangement whereby we do not employ directly a number of finance staff who carry out a number of those very basic transactions. They are employed by Liberata and we have a contract with them to provide those services to us. So when the Oracle system problem happened, it was partly Liberata's problem and partly ours. It was not their fault. It was a joint failure to implement that project effectively, and both parties picked up costs in response to that.

  Q19  Chairman: So this is just the other side of the same coin, is it?

  Barbara Moorhouse: Exactly so.

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