Examination of Witnesses (Questions 960-979)
MR TONY
COOPER, MR
SIMON VRY
AND MR
IAN HEWETT
27 NOVEMBER 2006
Q960 Chairman: This Defra Design
Authority, in theory, should have had, in your judgment, the technical
capability of raising anything that they wanted to, of a technical
nature, about the process that you were embarking on? If they
had a concern then obviously they would have had the ability,
if they had wanted to, to provide that information to ministers,
should they have been so minded?
Mr Vry: We had dealings with them,
so if they raised queries we would respond to their queries. I
believe that obviously the primary source of technical assurance
outside of RPA was relied upon from the OGC reviews that were
coming to review the various releases that we were delivering.
The external assurance was provided primarily by the Office of
Government Commerce Gateway review process, which we used extensively.
Q961 David Taylor: To your sure and
certain knowledge, do the OGC have a great track record in identifying
what are the problems with the major systems that they are charged
with assessing?
Mr Vry: I cannot say to my sure
and certain knowledge, because it is my first engagement with
the Office of Government Commerce, not having worked with them
before, so this was my first experience of them. Obviously, they
are the organisation which is tasked with reviewing high risk,
mission critical programmes, such as RPA's Change Programme was.
Q962 Lynne Jones: They were involved
in the discussions around June 2005, were they, and they agreed
that you battle on?
Mr Vry: Yes. What we asked them
to do was review the format of the process that we came up with
for helping us to assess the various different options and to
look at that to see whether it was as reasonably objective a format
for making those decisions as was possible, and OGC were involved
in reviewing the process. They did not actually opine the decision,
as far as I am aware they did not, but they looked at the process
to ensure that the process was a reasonable one.
Q963 Lynne Jones: How did you manage
to give yourself a green light under `Schedule' on 9 March, just
a week before the whole project collapsed?
Mr Vry: That was specifically,
as I recall it, in relation to the initial milestone, which was
to commence payments in February, and the milestone was met and
we did commence payments in February. The subsequent milestone,
which included completing the RPA target of 96.14% by the end
of March, we had indicated already was not going to be met and
so we were focusing on trying to achieve the bulk of payments
by the end of March. That was not met, clearly.
Q964 Lynne Jones: Basically, the
system gummed up? You started making the payments and then it
gummed up?
Mr Vry: Yes. There were a significant
number of payments, about one-third, which had been validated
to that stage. They had to go through an authorisation process,
and that authorisation process meant that a number of payments
which we had expected to go through and to get those payments
out to customers did not happen in timeframes that we had expected,
and the authorisation process, in essence, did gum up those payments.
After obviously the incidents around the middle of March, and
Johnston was removed from his post, we then held a workshop with
staff from across the organisation on a Sunday to look at the
issues around authorisation processes, to see if we could un-gum
that process. As a result of taking some steps around there, we
were able to pay out twice as much in the subsequent two weeks
as we paid out in the previous month, because we managed, for
the large part, to un-gum that process which had gummed up those
payments. However, that did not solve all of the problems, because
obviously there were still a large number of payments which had
not completed validation, and that is where we have struggled
to get that process to proceed quickly enough, and ultimately
a decision around fast payments was taken.
Q965 Lynne Jones: Do you take any
personal responsibility for the failure of the SPS to deliver?
Mr Vry: I think, as part of the
RPA Executive and part of the CAPRI Programme Board, all of us,
and certainly I speak for myself, feel desperately unhappy that
we have not been able to get the payments out to the farming industry.
I know and talk to farmers about the issues that has created for
a large minority of them and that uncertainty and dissatisfaction
for the majority of them. Yes, I take that very personally. I
do not like being involved with a failure, and clearly this was
a failure, and I am committed to try to help put it right.
Q966 Lynne Jones: With hindsight,
do you look back and think "I wish I'd done such and such"?
Were there any points where things were going through your mind
and you might have suggested something different?
Mr Vry: With hindsight one could
put the world to rights and everything in the garden would be
rosy, but the problem was that we did not have hindsight and we
were working to an extremely difficult, challenging schedule and
we had set an objective of starting to make payments in February
and making the bulk of payments by March. By February we had started
to make payments, we had validated a third of the claims and we
thought it was not beyond the realms of our capability to get
the bulk of payments out by the end of March. Unfortunately, we
were wrong, we made some wrong decisions and we regret that deeply.
That is something that we want to correct and are trying to resolve
currently with, obviously, Tony Cooper and the team. It is going
to take a while to resolve, it is not something that we have a
silver bullet for, that we can correct overnight, but we are determined
to correct it.
Q967 Lynne Jones: What about you,
Mr Hewett?
Mr Hewett: Absolutely the same,
and we have said so on a number of occasions with our customers
and our staff. Our staff are deeply frustrated that they were
unable to make the payments to their customers, their claimants,
as they see them. We do work very hard behind the scenes to try
to make those happen. There are still a number of 2005 payments
outstanding and some of those individuals are in very serious
financial difficulties and we are trying to expedite those. Even
last week there was one particular case which came to my attention
where we just simply had to get the balance payment out, they
had a partial payment, and we simply had to get that payment out,
and we work with various other groups, such as the industry representatives
and the voluntary sector, to try to make sure that those payments
happen as quickly and as practically as possible. What I think
we can do is try to build on some of the issues which came out
of the lessons from 2005 to make sure that 2006 does not go the
same way and that farmers do receive their payments in good time.
Q968 Lynne Jones: Do you think when
you appeared before the Committee in January and, for example,
Johnson McNeill told us that the Change Programme would make the
scheduled savings by 2006-07, that was accurate? Was that an answer
made on the basis of an accurate assessment of the situation;
we were being given accurate evidence in that session?
Mr Hewett: It is difficult for
me to answer for Mr McNeill. What I can say is that, based on
where we were at that point, we still anticipated starting payments
in February, which we did. We had anticipated getting a substantial
proportion of the money out by the end of March, which clearly
we did not, and for which we apologise. It was seen at that particular
time that the bulge, if that is the right term, in terms of the
resource effort to process through SPS, would be a short-term
issue and therefore the numbers of people required within RPA
to process SPS for the remainder of the SPS 2005 cycle and in
moving forward would reduce quite substantially, quite rapidly,
after the end of March and certainly by the end of June. That
proved to be false.
Q969 Lynne Jones: Can I ask Mr Vry
the same question. Based on the state of knowledge that you had
about the Change Programme on January 11, do you think it was
reasonable for Johnston McNeill to tell the Committee that you
would be back on target and making the savings to the Change Programme
by 2006-07; this year, in other words?
Mr Vry: If the plans which had
existed at the time, in terms of making the bulk of payments by
the end of March and then getting the remainder of the payments
out before the end of the June payment window, had been completed
without having to make the partial payments then the amount of
work that we are having to do now would have been very different,
so there would have been potential to achieve if not all at least
a significant part of those savings. I cannot quantify exactly
what there would have been, but obviously, with the difficulties
that we had from the early part of March, it has become impossible
to deliver that in that timeframe.
Q970 Lynne Jones: It was reasonable
for him to tell that to the Committee?
Mr Vry: Based on the information
and the plans which existed at that time, had the payments been
made in accordance with that plan, I do not see that it was unreasonable
to assume that a significant element of those benefits would have
been realised.
Q971 Sir Peter Soulsby: Mr Cooper,
we have focused again today, and just have been, as we have done
on previous occasions, on this interrelationship between the departmental
management, the Rural Payments Agency senior management and advice
to ministers. These three elements have been an important part
of our questioning today, as they have been on previous occasions,
and we have talked about the Executive Review Board and CAPRI
and who served on what and when and who is advising whom about
what. I wonder, Mr Cooper, whether you could just summarise the
changes that you and the present Permanent Secretary have made
in those relationships and the thinking behind those changes?
Mr Cooper: There are several changes
around the governance arrangements. Mr Lebrecht has taken responsibility
for what is described as the Owner of the Agency, on behalf of
Defra, and we have implemented a monthly meeting of a group, which
is Defra senior personnel and RPA senior personnel, to discuss
the progress on issues that arise with the Agency. In addition
to that there is a refocusing of the Ownership Board, which was
described in the Framework Document for the Agency and is now
in the process of being revamped into a new body, with a slightly
smaller group and with myself taking part in that group to explain
the progress being made and, for example, to agree business plans
and annual reports. Below that there is a structure within the
agency, which I spoke about, which I put in place, but also there
is a joining up of the policy area. There was always an interface
between our Defra colleagues and the policy interface within the
Agency, and to make that a better arrangement we have put one
person in charge of both legs, so there is a single person who
has responsibility for certain staff in Defra and in the RPA.
Q972 Sir Peter Soulsby: That describes
what you have done, but it does not describe adequately, I think,
what the fundamental weaknesses were you were setting out to address
and perhaps identify for us quite how you have tackled those weaknesses?
Mr Cooper: There has been in the
past, I think, and it is something that I have seen elsewhere,
a misunderstanding between a department and an agency, and that
misunderstanding in the policy context is about the way in which
rules and delivery are described. In a delivery agency they speak
about things in delivery terms and Defra will speak about things
in policy terms and often there is a lack of understanding in
terms of that communication. Being able to arrive at what is deliverable,
can it be done and what are the impacts, then by joining up that
group under one person it means that one person has to form a
view and make a recommendation to both the Defra organisation
and the RPA organisation. If there were differences of opinion,
and we spoke about the disallowance risks earlier on, if the RPA
were rash enough to make decisions without consulting with Defra
and incurring significant disallowance then, quite clearly, we
would be acting in an irresponsible way. One way of making sure
that does not happen is we have joined that up with a Disallowance
Working Group, who in turn take information from the RPA, take
information from Defra, assess what the risk is and make a recommendation
or provide information into this group that Mr Lebrecht has set
up across the two to consider progress in the organisation with
Defra colleagues and with RPA. That is the type of thing that
we are doing, which is all about bringing us closer together and
joining up the thinking.
Q973 Sir Peter Soulsby: Is it fair
to say that there was a fundamental lack of clarity about roles
and purposes, which really was at the heart of the problems between
the Department and the Agency?
Mr Cooper: It is quite difficult
for me to comment on that, other than what I found when I arrived
and describing things already underway.
Q974 Sir Peter Soulsby: It seems
to be what you have addressed, does it not?
Mr Cooper: I always believe there
is further clarity to be brought to what we are trying to do,
and trying to find ways of bringing that clarity and joining people
up, I think, is an important facet.
Q975 Chairman: I think what we can
deduce from that is that the mechanisms which you inherited did
not deliver some of the improvements in communication and understanding
which now you believe you are putting in place. I think, by a
reverse piece of analysis of what you are doing, we can work out
for ourselves where we think the holes were, which does lead me
to wonder about the role of Mr Lebrecht, who figures in all of
this. He was involved in the Executive Review Group and was fairly
close, I think, to CAPRI and would have been a key conduit of
information about what the Agency was doing, to ministers, with
the result of the problems that you inherited. Now the self-same
person is heading up an organisation which is supposed to put
right some of the misunderstandings that were there before. You
might not want to comment about that, but that is again a piece
of analysis which I draw from what you have told us?
Mr Cooper: I think my only comment
is that I firmly believe we must be as transparent as possible
about what we are doing, and that is the approach that I am adopting,
with the full support of Mr Lebrecht and ministers, I believe.
Chairman: I think that is a very good
point to conclude our discussions. We like transparency on this
Committee. I have to say that in the inquiry we have been undertaking
it has not always been possible to get transparency about exactly
what was happening, and some of the things that we have been asking
about today I think still leave the members of the Committee scratching
their heads about, if there was so much expertise available, how
did it all go so badly wrong. As we have said, with the benefit
of hindsight you can start to put things right, but the one value
of hindsight is that it does tell you what went wrong and it does
raise some interesting questions about the perceptiveness of the
process of change on which Defra embarked. I think you have said
fairly clearly, in your evidence to the Committee, that you were
trying to do an awful lot against a background of a rapidly closing
timescale, and there were policy and practical changes which also
impacted on the endeavour that you were about. I think that reinforces
the Committee's decision to have a further discussion with Sir
Brian Bender, because clearly he put in place and signed off the
Change Programme and the processes which led to the creation of
the Agency as it is now, and indeed was singularly involved, to
be left with a number of the issues which have arisen as you progressed
towards the problems with the payment. I suppose I am still left
with one question at the back of my mind and that is, in all of
this, why the system was never, ever tested using seemingly live,
real farmers' data.
Mr Drew: That was the question I was
going to ask earlier, why somebody did not get 20 cases from across
the country and put the stuff into the computer just to see if
actually it made sense, tying into the mapping, tying into what
should have been paid out. You do not have to be a rocket scientist
to work that out.
David Taylor: Mr Hewett and Mr Vry are
both seasoned in the world and works and methods of IT. This is
not 20/20 hindsight, this is just a lamentable lapse from a halfway
decent service.
Q976 Chairman: In the interests of
transparency and clarity and openness, why was not there a test
done using real farmers' data to see if the system could deliver
the cheques without gumming up?
Mr Vry: First of all, the gumming
up that was referred to earlier on was not down to the system,
in terms of delays, it was to do with an authorisation process
which took place, then at the end of it people were checking before
they released payments, authorised them for payment. That was
an issue around the authorisation process. Following, as I say,
the changes that were made in the middle of March, we sat down
with some front-line staff and actually worked through in a workshop
on Sundays to see why that was causing problems and found ways
to address that and resolved the authorisation process quite rapidly.
The reason why it was not possible to complete end-to-end testing
was the way in which we had to deliver the IT in bite-size chunks,
in incremental steps, so by the time that actually the final envelope
was delivered data had already been passed, almost all of it,
into the Rural Land Register.
Q977 Chairman: Did anybody actually
ever ask, from any of the great Boards that were looking, the
experts, "Can we test this to see if it will be all right
on the night?"; was that question ever asked by some person,
not if you like with their nose pressed close to the glass of
the project?
Mr Vry: Yes, testing was done.
All the individual elements of the system were tested.
David Taylor: In sequence; was it a sensible
way of doing that?
Chairman: The point I am getting at is,
if somebody says to me "I've tested it," what that means
is it will deliver what it is supposed to, and it did not.
Q978 Lynne Jones: We had some evidence
from Iosis Associates and they said: "It ought to have been
possible, during system tests, and then at any stage once some
claims had been verified, to advise the system that it has a complete
set of data, give it a notional sum of money in the pot, and then
"those end pieces of the programme" ("the last
stages of the process") as a test." Do you accept that
could have been done?
Mr Vry: Unfortunately, I am not
an IT expert so I cannot say whether that was possible or not.
Q979 David Taylor: Accenture "treated
you as one"?
Mr Vry: No, they did not.
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