Examination of Witnesses (Questions 340-359)
MS HELEN
GHOSH, SIR
BRIAN BENDER
AND MR
ANDY LEBRECHT
15 MAY 2006
Q340 Chairman: Go on. Tell me why
I am wrong.
Sir Brian Bender: Obviously I
can only talk about the period up to the end of September/beginning
of October when I left, but this was self-evidently a high risk,
complicated project and we set up programme management arrangements
which included the sort of management information we were describing
earlier and the critical path along the way. At various stages
we looked at problems arising and took decisions to make things
easier. We de-scoped some of the IT so that the tasks set would
be less difficult. We had an earlier partial outsource of the
processing of the Rural Land Register to ease pressures and that
was not sufficient, so we decided on taking a further such decision.
I made clear more than once that single payment delivery was a
higher priority for RPA than business as usual if there was a
conflict. I personally checked with the Chief Executive whether
or not the demands of the efficiency programme, closing down for
example Crewe and Nottingham, risked conflicting with delivery,
again making clear that SPS delivery had priority. This was not,
taking Mr Taylor's example, a horse easily clearing the hurdles
and running home: this was a very difficult programme, very challenging,
where we were keeping what we felt to be a close eye monitoring
it and at various stages along the way taking decisions to try
to de-risk it.
Q341 Chairman: You have made a very
important point there in helping us to understand some of the
complexity, but you were driving it against a very tight timetable.
Some people will ask, if all of this was going on and it was getting
increasingly difficult, whether at some point we could not have
put the brakes on? Could we not have said we needed more time
to deliver this thing?
Ms Ghosh: That is the discussion
we had earlier where we said effectively, once we had signalled
to the Commission what we were doing in the middle of 2004, there
was no alternative route to go down other than the partial payment
system. The only let out—I cannot think of a Grand National
analogy for this—the only thing we could have done and the
decision we could have made in January 2005 was to make a partial
payment and the Committee will be interested to see the detailed
analysis we did. At that stage, balancing the taxpayer interest,
the farmer interest and the effect on 2006 all together, we concluded
that it was better, on the analysis we then had about the probability
of being able to make final payments from February, it was better
to concentrate on making full payments in February. Retrospectively
I should say that we should have made partial payments. If we
had known then what we know now, that is what we would have done.
Q342 David Taylor: So the minister
sacked, the chief executive of the RPA sacked, but the permanent
secretary of Defra just slides out of a side door and on to the
DTI. Does that seem a fairly balanced outcome?
Sir Brian Bender: I do not think
that is something we can comment on.
Ms Ghosh: No.
Sir Brian Bender: The Committee
can make its recommendations and the Cabinet Secretary and Prime
Minister can reach their conclusions. I certainly did feel a sense
of responsibility for overseeing this programme. I set up the
arrangements I described and, using your Grand National analogy,
the hurdles were substantial, but the horse was just about clearing
them with a few more hurdles and the winning post in sight. I
do not feel it is right for me to comment on precisely the question
you ask.
Q343 Sir Peter Soulsby: You have
described the roles of the ownership board, the executive review
team, the programme board, you have described the meetings with
ministers, you have described the visit by ministers to look at
the RPA. You have described all the processes you had in place
for monitoring the implementation of this project and you have
told us that despite all of those there was no way that you could
have known that this project was not going to deliver on time.
You have told us that you and ministers were surprised in mid
March when Mr McNeill eventually told you that it was not going
to deliver.
Ms Ghosh: The bulk of payments
by the end of March.
Q344 Sir Peter Soulsby: Certainly
as far as the farmers were concerned it was not going to deliver
full stop. For them it had very serious financial and business
implications. You have told us all of that. What is Mr McNeill's
current employment position?
Ms Ghosh: Mr McNeill is a permanent
civil servant. He is currently on what we call gardening leave
and my HR team are in close touch with him in terms of support
he may need, outplacement support and discussions about his future.
Obviously when we know the outcome we shall inform the Committee.
Q345 Sir Peter Soulsby: You effectively
told us that he was responsible. Do you think it appropriate that
he remains on gardening leave in those circumstances?
Ms Ghosh: That is a discussion
which we are having with Mr McNeill.
Q346 Daniel Kawczynski: There are
conflicting views here. You say he is on gardening leave, but
Sir Brian said a few moments ago that he has done a very good
job and he met his targets. You are saying two very different
things.
Ms Ghosh: No; no, I do not think
we are saying two different things. When I explained earlier why
I had agreed with the then Secretary of State that we would move
him from his job, there were two particular issues: there was
the issue of confidence in terms of the communications ministers
were getting; there was the issue around whether the people at
the most senior level in the RPA had a grasp of how the overall
IT and business process stacked up together. Those were the things
which happened which led us to believe that Johnston needed to
be moved. It does not in any way undermine the points Sir Brian
made about delivery of broader RPA targets. That was a specific
response to a specific crisis.
Q347 Chairman: Can I be very clear
then? At no stage during Mr McNeill's tenure of responsibility
for this project did he communicate to you two as permanent secretaries
or to ministers that he would be unable, that is his Agency, to
deliver in line with ministerial assurances on the timing of payments.
Sir Brian Bender: May I take it
up until October and then Helen can take it after that? The answer
to your question is that it is correct that there were probabilities
and there were risks in delivery which he shared with us.
Q348 Chairman: What were the confidence
limits of those probabilities and risks?
Sir Brian Bender: At the worst
it was around 50 to 60% probability it would be delivered and
at those points we then had discussions about what we could do
to de-risk it so that probability could be pushed up.
Q349 Chairman: When did those discussions
take place?
Sir Brian Bender: We can provide
the material later on, but around the middle of 2005, that was
the sort of issue: what is the confidence of getting the bulk
of payments out of the door by the end of March and what do we
therefore need to do to reduce those risks so that it is more
certain.
Q350 Chairman: Subsequently, as you
attempted to de-risk the project and move it towards fruition,
he was coming back saying "I have done X, Y and Z. The risk
factor has now diminished to whatever".
Sir Brian Bender: Coming back
to your earlier question, the RPA did not at any point say this
was not deliverable. They were confidence levels which at no point
fell below 50% and when they got uncomfortably close to 50%—indeed
one of the questions was how to get it up to 90%—we took
the various decisions to try to help and the last one was the
one which has been referred to several times which was to outsource
all the mapping processing to Infoterra.
Q351 Chairman: When the Secretary
of State decided to go for partial payments, what was the risk
level then?
Ms Ghosh: When Mark Addison and
the team came and recommended partial payments and the decision
was taken to go for partial payments, she made absolutely clear,
as she did to the House of Commons, that she had asked the team
to build this new IT system for partial payments, which basically
went round the edge of the existing validation system and she
would only ask them to press the button when and if they had done
a test of a substantial number. That is what she said to the House;
that is what she did.
Q352 Chairman: That was not the question
I asked.
Ms Ghosh: She was not given a
specific confidence figure until we had run the test.
Q353 Chairman: Let me go back and
ask the question again and I apologise if I did not make it clear.
Sir Brian has said that in 2005 you were at 50 to 60% certainty
that this thing was going to work.
Ms Ghosh: Yes.
Q354 Chairman: You then went through
a process of de-risking it. When the Secretary of State came to
make her decision, that you could not sit down and hope it would
be all right on the night but were going to make partial payments,
what was the risk factor in the project? At what point did Mr
McNeill say he still could not be certain.
Ms Ghosh: I see. There is a variety
of questions there. What became clear, in the conversations that
took place at the CAPRI board on the Thursday and thereafter with
the Secretary of State on the following Tuesday, was that the
confidence levels in being able to hit the bulk of our payments
by the end of March were significantly less than 50%. We certainly
can tell you that.
Q355 Chairman: If it was significantly
less than 50%, Sir Brian said it was 50 to 60% in the middle of
2005. Are you saying that it had regressed to below 50% by the
time you decided to pull the plug on full payments?
Ms Ghosh: Yes, but not having
gone through a declining line.
Q356 Chairman: Hang on, you cannot—
Ms Ghosh: Yes, you can, because
you take mitigating action.
Q357 Chairman: Tell me how we go
from 50 to 60% to a number greater than 60% and then back to 50%.
Ms Ghosh: By a process of risk
management and mitigation. The Committee will find it very helpful
to see the paper that we used as the basis for a crucial decision
in January not to go for a partial payment option at that point.
At that stage, having done the business case analysis, having
done the options analysis of pressing on with processing and validation
as though there were no February commitment, an option, which
is to establish definitive entitlements in February and start
paying in February and an option to go for partial payments, at
that stage, as a result of all the mitigation actions taken on
the back of OGC reviews and external observation of the programme,
there was a positive—and again I do not have the figure
in front of me—expectation that if we went for option two,
which was to establish the definitive entitlements on 14 February
and start paying, we would get the bulk of payments out by the
end of the month; we did a very detailed analysis. In other words,
the expectation that we should be able to make full payments by
the end of March rose in that intervening period and then we got
to the problems later on which we have discussed exhaustively.
That was the shape of the confidence.
Q358 Chairman: When you were relating
your risk assessment, you were not actually looking at the full
picture, because you discovered an element at the end—
Ms Ghosh: —which had not
been predicted; exactly.
Q359 Chairman: Why, with all this
careful assessing, was it not predicted?
Ms Ghosh: Because at that stage—and
when you see the paper you will see—the focus of our analysis
was on the interrelationship between processing applications,
between the likely validation, the impact on farmers and their
very strong desire, entirely understandably, to get a payment
and the relative costs of the disallowances. That was the risk
assessment we were doing. At that stage no-one had said, for all
the reasons we discussed earlier and we shall give the Committee
more material on this, that even if you press the button the number
of payments you will actually be able to make will—
| 
