Examination of Witnesses (Questions 1-19)
ALEX ALLAN,
ROD CLARK
AND BARBARA
MOORHOUSE
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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