Examination of Witnesses (Questions 20-39)
ALEX ALLAN,
ROD CLARK
AND BARBARA
MOORHOUSE
17 OCTOBER 2006
Q20 Chairman: You are satisfied that
the problem has been resolved now?
Barbara Moorhouse: Yes. Essentially,
we had to work, obviously, with our out-sourced supplier to provide
the solutions, so both we and the supplier worked together. The
benefit of that was that I think it has improved working relationships
and understanding of how we can work better in the future and
we have a major initiative now within finance to try and improve
the way in which we carry out a wide variety of finance systems
and processes which we believe will deliver efficiencies and,
more importantly, give the Department a much better understanding
and control of its costs and visibility and where it is actually
spending its money; much better management information, in short.
Q21 Chairman: These do not involve
taking this function back in-house, do they, or might they?
Barbara Moorhouse: Currently,
we have just been going through a set of discussions with that
supplier to look exactly at the interface, because there were
some functions that we felt on the margin were better performed
in-house and we have arranged to do that by a contract renegotiation,
and there have been some small areas where we felt that they should
take those into their portfolio of responsibilities. But it is
at a very detailed level. There are a series of service level
agreements that cover exactly what they do to us and what we do
to them and the corresponding rights and responsibilities on both
sides. We have carried out a comprehensive review of that settlement
or that contractual base with them and we have made provisions
that we know will save us money and we think will help to create
that better platform for financial management.
Q22 Chairman: One of the reasons
you gave for not getting your resource accounts in on time before
the recess was that you had taken in the court service, but you
have the Tribunals Agency. Are you not going to go through the
same thing all over again?
Barbara Moorhouse: The Tribunal
Service is smaller. It has therefore been easier to absorb, and
the second issue was that it was the combination really of HMCS
and the Oracle systems failure that caused us problems, and we
are obviously anticipating that we will not suffer system failures
in the same way again, and we have no reason to believe at this
point that we will. The systems are now running smoothly, and
we have planned very carefully to try and make sure that we are
all set for being able to lay accounts before recess for the current
financial year.
Q23 Chairman: This summer you have
been involved in discussions about potential job cuts, and you
told us that you met the trade union side in July and there was
going to be another meeting in the autumn. Where are you up to
on that?
Alex Allan: I have had another
meeting a few weeks ago with the trade union side where we expanded
on the plans we had, and explained how we were going about it,
trying to put the financial background that is part of this and
generally trying to be as open as we can about the plans going
forward, to explain how we are looking to improve the efficiencies
with which the courts run, and this is very much in line with
our general strategy. We believe that there are things we can
do through some targeted investment to improve the way the courts
run. We have a whole programme of simpler, speedier summary justice,
which is aimed at making sure that trials start more promptly,
that they have fewer hearings before they actually come to trial.
We believe there is quite a lot we can do to improve the efficiency
and effectiveness of the way the courts operate and that is what
we are trying to do.
Q24 Chairman: Is there a financial
target for that programme, the speedy, simple summary justice?
Alex Allan: We are working on
the financial targets. We have a number of pilots going at the
moment and perhaps I could ask Rod Clark to expand on that in
a moment.
Q25 Chairman: I was interested to
know about the programme as a whole.
Alex Allan: We have very specific
efficiency targets, for example, for head count as part of the
Gershon review originally, and this is certainly one of the ways
in which we are going to meet those targets. Yes, there is that.
Yes, we also have an overall financial envelope for the Department.
We are engaged in negotiations at the moment with the Treasury
over the new Comprehensive Spending Review. Perhaps I could ask
Rod Clark to expand about the scope of the simple, speedy summary
justice programme.
Rod Clark: It was set out in the
Lord Chancellor's document before the summer and has a number
of elements. Key amongst them are the elements in particular the
magistrates' courts but also in the crown court, which are to
do with getting the criminal justice agencies to work together
more effectively and, in particular, to get advanced information
on cases so that they can be disposed of more rapidly, particularly
at the first hearing, where possible, without the large numbers
of additional hearings that have often bedevilled the system.
I was fairly recently down visiting the pilot that is running
in Coventry Magistrates' Court, for example, and really very impressed
at the results they are getting. By ensuring that advance information
is provided early to the defence so that the defence can consult
their client early on, there are a lot more cases coming to a
first hearing with a plea, with a plea that can lead straight
away to a sentence and so deal with that case very rapidly, and,
where it does need to proceed to trial, that a date can be set
very soon afterwards. The support of the magistracy in the area
combined with the support from the police and the prosecution
are essential in achieving that. That reduces Legal Aid expenditure
as well as reducing the pressure on the staff and the courts themselves.
This is a pilot at this stage. We are obviously looking to build
on that sort of experience, but to find exactly what the financial
implications are going to be, we need to do some more work.
Q26 Chairman: Just going back to
jobs for a moment, can I clarify? You gave us some figures earlier
on on the job losses that were expected in human relations and
the Tribunals Service and various other parts of DCA. Do you have
a current figure for people who have gone and posts not filled,
just to give us a picture of what is happening?
Barbara Moorhouse: Up until the
first quarter of this year of our Gershon target, 1,100 job reductions,
we had achieved 449. If I put it in context in terms of the overall
Gershon programme, we had a baseline in April 2006 of 25,950 jobs
and our target is to get down by 31 March 2008 to 24,473. That
would give us a small margin. In other words, we now have plans
that will enable us to exceed the Gershon target by about 200
jobs.
Q27 Chairman: And none of these involve
simply transferring the equivalent work to the equivalent number
of people in the private sector?
Barbara Moorhouse: No, these are
attempts, as we have just been discussing, with the CJ SSS programme
to achieve genuine efficiencies across the entirety of the Department
in the way in which we work. Obviously, it is the case that most
of those job reductions will take place in HMCS through better
processes, primarily in the courts, and the change and modernisation
programme that is now under way and that has received funding
from the Treasury.
Q28 Keith Vaz: Mr Allan, did you
see Question time today?
Alex Allan: Yes, I did.
Q29 Keith Vaz: So you heard my question
to the Junior Minister about consultants.
Alex Allan: Yes.
Q30 Keith Vaz: So you know the answer
to the question that I am going to ask you now.
Alex Allan: It depends which question
you are going to ask me.
Q31 Keith Vaz: I only asked one question,
the question on consultants to Vera Baird. Did you see it?
Alex Allan: Yes, I did.
Q32 Keith Vaz: So you know what I
am going to ask you, do you not?
Alex Allan: Perhaps you would
like to ask me exactly what it is.
Q33 Keith Vaz: What did these consultants
accomplish and why is it that on 4 May I was told by the Minister
of State that she did not know?
Alex Allan: As I think the Parliamentary
Secretary explained, we do have devolved budgets, we have devolved
responsibilities for spending on consultancies as well as other
areas, so some of it is approved locally, for the large ones there
is a hierarchy of approvals, and major spending has to be approved
by director generals, for example. So it is not straightforward
at the moment to get the information. In a moment I will ask Barbara
Moorhouse just to say a bit more about the work we have now got
in hand to get better and quicker information. We have done some
investigation following, partly, your question to make sure that
we knew the full range of spending that was going on. In terms
of the sort of various categories of spending, it covers a wide
range of different types of consultancy, from support for change
management, support for marketing and communications, support
for the human resources programme, quite significant support for
IT, some for the finance change programme, some for the strategy
programme.
Q34 Chairman: You are spending a
lot more money on IT to pay for the problems which other programmes
brought out?
Alex Allan: One of the reasons
we do spend money on consultants in the IT area, for example,
is because it does not make sense for us to employ directly very
large numbers of very specialised IT skills for what would be
a fixed length period. It is fairly normal that we do employ consultancies
to provide that sort of support. Another one is that, for example,
we are going through changing our pay and grading system across
the whole Department, because we have inherited 42 different systems
of pay and grading in local authorities, and we have been getting
consultancy help to try and make sure that the system we devise
for that is fit for purpose and in line with all the others.
Q35 Keith Vaz: Can I just stop you
there? What surprises me and my colleagues, which prompted the
question that I put down, was that you spent £11 million
last year, you spent £700,000 in 1997, so we are talking
about over the last ten years—and I do not have figures
for each year but you will because you are the Permanent Secretary—I
would think over £50 million has been spent on consultants,
because it would have gone up from £700,000 to £10 million.
It has not suddenly gone up from £700,000 to £10 million.
There would have been a gradual increase over the years. We are
talking millions and millions of pounds here, and you are telling
me that until questions were put down you had no method of knowing
who commissioned these consultants. We are talking about PricewaterhouseCoopers,
£2,223,000; we are talking about KPMG, £1,061,000; and
these are big names here, a lot of money, and until these questions
were put down and you started to investigate what this was about,
you, as the Permanent Secretary responsible to the Government
and your Department, coming to us to give us your review, did
not bother to know who commissioned this.
Alex Allan: I would know for the
very large items that you mention. The issue, as I think was brought
out in the Minister of State's written reply to you, was that
there are very large sums ranging from £400 to one consultant,
which I would not necessarily be expected to know about ...
Q36 Keith Vaz: I know what he does
because I found out this morning. The £413 we can deal with.
Alex Allan: Yes, but the large
sums, yes, I would have known. PricewaterhouseCoopers' main work
was in the areas of our consumer strategy, where, following the
creation of the new Department, and a focus much more on saying
that our focus is on consumers rather than providers, we did quite
substantial research looking at all sorts of areas across that
to do with people's experience with the criminal justice system,
some of the work that your Committee has looked at to do with
small claims.
Q37 Keith Vaz: Let us look at the
smallest amount, Mr Sutlieff. Mr Sutlieff was employed to fill
a short-term skills gap. This is what he did: he devised a communication
strategy and provided advertising and communication advice to
the Judicial Appointments Commission implementation scheme. The
strategy set out how to promote awareness across key stakeholders
about how the creation of the Judicial Appointments Commission
upon implementation of a constitutional format will affect judicial
appointments and what these changes would mean for them. He was
paid £413. I just cannot believe that in a Department the
size of yours, with the budget you have, a quarter of all public
expenditure in some areas, that you could not have found one civil
servant to have done this work.
Alex Allan: Mr Sutlieff was, as
you may know, previously a civil servant. He was director of communications
at the Cabinet Office, I believe.
Q38 Keith Vaz: So he was an ex-civil
servant who you have given this contract to?
Alex Allan: Yes.
Q39 Keith Vaz: But you could not
find a single person in your Department to do this?
Alex Allan: It may well have been—I
am speculating because I do not know the exact answer. As I say,
a sum of that size would not require my involvement or approval
but it is not unreasonable, where a team needs what is obviously
a pretty small contract, that it may be more cost-effective to
employ somebody like Mr Sutlieff to do that than it would be to—
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