Examination of Witnesses (Questions 60-79)
MR DAVID
VARNEY, MR
PAUL GRAY
AND MISS
SARAH WALKER
12 OCTOBER 2005
Q60 Susan Kramer: Is that true for
2003-04, not just 2004-05?
Mr Gray: Yes.
Q61 Susan Kramer: It is an estimate
in both cases. You cannot tell me how much of that is small amounts
automatically written off because it is below the level at which
it is worth—
Mr Gray: No, because it is not
a write-off, it is a broad-brush provision.
Mr Varney: I do not think we are
doing justice to your question. I am sorry. We are focusing on
the question you have asked, but so far for 2003-04 we have written
off £123 million or remitted it. That is how much we have
actually remitted. We then have £395 million which was recovered
in 2004-05, and that was recovered over the system we have just
been discussing. All that we know about the overpayments is that
one-third by value, as I have said, was by families whose income
for 2001-02 and 2003-04, over those two years, has increased by
more than £10,000. So one-third of the value of the overpayments
is people who have that change of economic circumstance.
Q62 Susan Kramer: So two-thirds—
Mr Varney: Who have not had more
than £10,000. There is a table of what the overpayments is.
If we can give you a better answer, I would like to try to do
it.
Q63 Mr Ruffley: Mr Varney, constituents,
Mr and Mrs David Cawthorne of Bury St Edmonds—and I will
not give the details of their underpayment—have had a catalogue
of misfortune, and in their last telephone call made last night
they were told by one of your officials, "People seem to
have more success by going through their MPs." Why are your
officials passing the buck in that way rather than getting your
own house in order?
Mr Varney: If that is what an
official has said, that is not what we have asked people to do.
Q64 Mr Ruffley: Are you aware of
other complaints along those lines?
Mr Varney: Yes.
Q65 Mr Ruffley: You have heard of
that?
Mr Varney: Yes. After the last
time we were in front of the Committee, we had some advice out
to people who answered the phone that this was not an appropriate
response.
Q66 Mr Ruffley: But it is still going
on. It may not be appropriate but it is still going on. It is
no wonder the MPs who try to do their work are inundated in this
way. If there is a tricky case that is not being resolved, your
officials take the easy way out and say, "Get on to the MP"
and that is presumably put on a fast track. That is no way to
run an organisation, Mr Varney.
Mr Varney: It is not. You have
said one case and we will follow that up. If you have more cases,
you can use the words that there have been a number of cases.
My impression is that it is not because we have encouraged people
to come to their MPs. As Ms Kramer was saying earlier, people
see MPs as an important channel of communication if others are
frustrated. But, if we have officers who are encouraging that,
that is not what we want them to do and we have put out guidance
not to do that. I agree, a good organisation does not do that,
it tries to solve its own problems.
Q67 Peter Viggers: You are currently
reviewing the operation of the Code of Practice on overpayments.
I think that is Code of Practice 26.
Mr Varney: Yes.
Q68 Peter Viggers: The present procedure
is that if there is a case of genuine hardship where the recovery
of overpayment is disputed, recovery can be suspended while the
dispute is resolved, which really means the distress is lengthened.
When do you anticipate that your review of Code of Practice 26
will be published? Do you anticipate there will be changes?
Mr Varney: We are aiming to publish
that by the end of this year and we are currently engaged in consultation
arrangements with a number of voluntary sector and other bodies
about the ways in which we might seek to clarify that code of
practice. In particular—and it reflects some of the earlier
questions—to bring a little more precision, clarity, objectivity
to the particular ways in which the test of reasonableness will
be applied.
Q69 Peter Viggers: Are key areas
still being debated? What you have just described is clarification
rather than a change of policy.
Mr Varney: We are looking at the
detailed operation of Code of Practice 26 from an administrative
viewpoint rather than a fundamental review of that policy.
Q70 Peter Viggers: Our constituents
would wish us to say to you and those responsible for decisions
that, if overpayment is part of the system, and repayment is part
of the system, then that does cause real distress and hardship,
and we would ask for that to be considered.
Miss Walker: Perhaps I could add,
on the subject of hardship and Code of Practice 26 and hardship
a lot of the points that have been put to us are concerning the
fact that we need to make it clearer to people that they are able
to come to us if they are experiencing hardship, so that we can
give them the help that is already available rather than that
the criteria we are using to identify hardship cases are not right.
That comes back again to the improvement in communication and
the clarification of the circumstances in which help is available
in hardship cases, which is certainly what we are looking at.
Q71 Mr Todd: Could I come back, having
been frustrated by your responses on EDS. This project went through
an OGC gateway process, did it not?
Mr Varney: Yes, I would think
so.
Q72 Mr Todd: You sound uncertain.
I know you were not there.
Mr Varney: No, I was not there,
and, to be honest—I stand admonished if I am incorrect—I
believe in concentrating on what went wrong rather than the processes
that went round it.
Q73 Mr Todd: The Gateway process
is supposed to identify risks of failure. That is what it is supposed
to be about. Will you make available the reviews that went on
in the lead-up to the delivery of this system?
Mr Varney: I think I would be
better advised, when we have reached a resolution of whether we
can resolve this with EDS by agreement or by going to the courts,
to write to the Committee and lay out the basis on which we have—
Q74 Mr Todd: Because, if you take
it to the courts, you will certainly have to disclose that information
anyway.
Mr Varney: Yes. I am keen not
to do anything on the public record which—
Q75 Mr Todd: It would be helpful
if you would set out how you would address better communication
about this, so that we can learn.
Mr Varney: Yes. Absolutely. If
it would be a helpful route, if I would undertake, once we have
got to some solution or not with EDS, then to come back to the
Committee with what we have learned.[4]
Q76 Chairman: This dispute started a
long time ago.
Mr Varney: I am very conscious
of that, but I want an outcome which is the best one for the public
purse.
Q77 Mr Mudie: I find you alarmingly
complacent on this matter. I do not know if you understand the
hardship it is causing out in the country. You keep referring
to the May 26 statement. In that statement the Minister said that
she was looking to you to agree your commitment to the Public
Accounts Committee, made in January this year, regarding the suspension
of overpayments where there is a dispute. She asked you about
that. How did she ask you? Did she write to you? Or did she have
a meeting and raise it with you verbally?
Mr Varney: I see the Minister
regularly.
Q78 Mr Mudie: I am not asking you
whether you see her regularly; I am asking you a specific question
as to how that was put to you. Was it put to you verbally or in
writing?
Mr Varney: I think both.
Q79 Mr Mudie: So you received it
in writing from the Paymaster-General. Have you put back in writing
your answer?
Mr Varney: No. There are a series
of regular presentations of issues, and on this one I think there
was going backwards and forwards to the Minister, giving advice
on where we had got to on some of the issues. The issue we have
is: What can we do with the computer system? which is not—
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