Examination of Witness (Questions 990-999)
SIR BRIAN
BENDER, KCB, CB
6 DECEMBER 2006
Q990 Chairman: It is now 4.15, and I
officially open this evidence session of the Rural Payments Agency
Sub-Committee of the Environment, Food and Rural Affairs Select
Committee. We welcome back Sir Brian Bender, former permanent
secretary of Defra. Sir Brian, we appreciate your kindness in
coming back because the events that we want to discuss go back
quite a long way. We appreciate that in assimilating your new
role you will be a bit like the exam student who was once absolutely
up to speed with everything one would ever want to know about
the RPA but who, for completely understandable reasons, might
well have pressed the delete button some time ago. We will try
to tease out of that residual part of your memory some of the
information that we need to look at again in the light of inquiries
made of other witnesses. The Sub-Committee has a sense of frustration
that to date it has not been able to speak to the former chief
executive of the Rural Payments Agency, Mr Johnston McNeill. That
is where I should like to start our questions. You chaired the
appointment panel for Johnston McNeill and issued an information
pack to the candidates who sought this appointment listing a number
of the skills which you felt the person appointed as chief executive
of the RPA should have. I do not know anything about the other
candidates who were interviewed for the job, but clearly Mr McNeill
impressed you. Can you tell us why?
Sir Brian Bender: Chairman, I
begin by thanking you for the way you introduced this session.
I will do my best to help the Sub-Committee, racking bits of my
memory which in this particular case I think go back six years
or so. It was an open competition presided over by a civil service
commissioner. The other members of the panel were: me, Kate Tims,
who some Members of the Sub-Committee may know was in effect Andy
Lebrecht's predecessor, and Ian Kent, a businessman who was the
independent chairman of the Intervention Board. Mr McNeill was
the recommended candidate. Effectively, the reason is that he
had a track record most notably from his time setting up the Meat
Hygiene Service of creating new organisations involving what I
describe as complex mergers in different cultures. That track
record, combined with the references that he had, gave the panel
the belief that he was the best candidate for the post.
Q991 Chairman: As you will recall
from our previous investigations, we identified, and I think your
former department agreed, that some degree of expertise and understanding
in IT systems was important. If we go back to the investigations
of our predecessor, the Agriculture Committee, in 2001, when Mr
McNeill was questioned on that occasion he admitted that he was
not an IT expert and said that one of the first tasks he would
undertake would be to recruit a director of information. Yet I
note that in the job specification familiarity with the ICT system
was a prerequisite. Obviously, looking forward to the role which
the RPA was to perform it would have seemed quite important that
the holder of the office should have some experience and understanding
of these areas, but of his own volition he had to get an expert
to hold his hand.
Sir Brian Bender: I hope you will
forgive me, but I cannot recall the detail of the selection panel's
discussions on what his skills and gaps were compared with those
of the other candidates. The primary reason he was the selected
candidate was his track record in creating the organisations.
His first task on appointment was the recruitment of his senior
team and for those purposes he agreed by then with me the profiles
of the four main posts that needed to be covered: operations,
business change, finance and IT. He brought in people for those
functions. Even with the benefit of hindsight, I believe the important
point was not whether or not he was an IT expert but probably
whether or not he had those people around him and was himself
capable of being a very intelligent customer of IT. I am not trying
to mince words, but I simply do not recall the extent to which
when the panel had a discussion about whether that was crucial.
Clearly, it was not a determining factor looking at the candidates
one against another.
Q992 Chairman: How would you describe
Johnston McNeill's management style? Was he consensual? Did he
attempt to build a team? Was he the kind of person who would have
attracted natural loyalty, or did he have other characteristics
that you might have thought appropriate at the time? How did he
come across?
Sir Brian Bender: To be frank,
as I need to be with the Sub-Committee, he had a reputation from
the Meat Hygiene Service of being a robust manager. The panel
looked into that and reached the view that, given the cultural
change challenge that the RPA needed in creating something from
the Intervention Board and the Ministry of Agriculture's regional
service centres, it might well be necessary to break some eggs,
if I may put it that way. I remember that that was a phrase somebody
used at the time. Therefore, that robustness was not a disadvantage
given the task to be faced in creating the RPA. He had the opportunity
to recruit his own top team and I believe that the only in-house
person he took was the operations director.
Q993 Chairman: You had dealings with
him. Was he a man who did not hold back when reporting to you
what was happening in the RPA, or did he give you a selected version
of what occurred?
Sir Brian Bender: Here we risk
getting into Rumsfeld's unknown unknowns. I am not trying to be
facetious here. I had no reason to believe that he was not being
frank. No doubt in the course of this hearing the Sub-Committee
will ask me how things developed at moments along the way. Clearly,
it was a high-risk programme, but one of the first times that
the alarm bells started ringing for me, or one of the most difficult
moments, was the time that the RPA opened the customer service
centre.
Q994 Chairman: When was that?
Sir Brian Bender: It was about
the spring of 2005 and before the forms went out. They were overwhelmed
and the service given to farmer customers was poor, with people
waiting on the line, not getting answers and so on. Coming back
to your direct question, I believe that in the conversation he
and I had afterwards he was being frank. He felt that there was
a culture in the organisation which I seem to remember his describing
as "it will be all right on the night". He wanted my
express authority that for the next phase when the forms themselves
went out there should be overkill, if anything, in terms of the
ramping up of available resources. I will check afterwards to
see whether my memory of the particular year is right. It might
have been in 2004 or 2005, but the particular point I am trying
to explain is that he was concerned that there had been a failure
in customer service and he was pretty robust in telling me about
what appeared to be a cultural issue in the organisation. Some
of his people had said that it would be all right next time and
he wanted my cover, which I gave him without hesitation, that
he should not rely on that and I preferred that he over-commit
resources and scale them back rather than be in a position second
time round of under-supporting customers' understandable demand
for information.
Q995 Chairman: Did you find that
during the implementation period, the change programme and development
of the RPA on all occasions when you had to meet formally and
appraise how things were going Johnston McNeill was objective
and realistic in terms of the nature of the information that he
brought to you about what was happening in the agency?
Sir Brian Bender: I think there
are two answers to that question. At the time, yes. No doubt the
question that is baffling the Sub-Committee and me is how the
RPA got into the position as late as January of this year of making
to you and also the then Secretary of State in Parliament a very
optimistic statement. They did not understand how difficult things
were. I cannot believe that they were deliberately misleading.
I think there is a question as to how much the chief executive
and his senior team really knew about what was going on. I do
not believe that that is solely an IT issue—I am sure that
you will want to discuss that with me later—but there is
somewhere a question to do with staff productivity, business processes
and the interplay within the agency between the culture of compliance
and avoiding disallowance on the one hand and the culture of making
payments to farmers because that was its business.
Q996 Chairman: I think you begin
to approach part of the heart of the matter. Your panel and, at
the end of the day, you as permanent secretary had to take responsibility
for recommending to the Secretary of State at the time that McNeill
was appointed through the interview process and that he had the
right skill sets to build the RPA and conduct the change programme
and the complex business that went with it. If you are saying
that somewhere at the heart of the RPA may lie the answer to the
question that we will come to—the nature of the reporting
process—it begs the question whether the architect of the
process was up to the task.
Sir Brian Bender: First, you have
not asked me directly—no doubt you will at some point in
the hearing—about Margaret Beckett's statement in March.
When I heard it I felt both deep dismay and a sense of responsibility
because certain things had happened on my watch. Second, I think
that the question comes back to what we know with hindsight and
what it was reasonable we should have or did know at the time,
and no doubt some of that will come out in further questioning.
Q997 Chairman: That was why I asked
you about how things were going. Obviously, part of the change
programme was to alter the way in which payments to farmers were
made with the advent of the Rural Payments Agency. If we park
for one moment the difficulties associated with the single farm
payment, life with the 38 individual CAP payment schemes that
they had to administer was certainly no less complex than the
project on which they subsequently embarked. Therefore, one had
to be certain that the system would work properly against the
kind of cost pressures that you had. I would have thought you
would have had a fairly good idea if McNeill's direction of travel
was good.
Sir Brian Bender: I think I said
in the hearing in May that there was no sign that the RPA was
a failing organisation. With one exception relating to beef payments
in 2003, I think, it was hitting its business-as-usual targets
and in terms of change the best indication was the IIP (Investors
In People) evaluation. All the indicators seemed to be that this
was an organisation that was delivering business as usual and
managing change.
Q998 Chairman: Who was responsible
for Johnston McNeill's appraisals?
Sir Brian Bender: It was me. I
know that Helen Ghosh has slightly changed the arrangements since
I left, but I decided when the RPA was set up that this was a
sufficiently important set of issues, even before CAP reform in
2003.
Q999 Chairman: I am sure you would
agree with me that the appraisal process that you had to administer
was a rigorous one.
Sir Brian Bender: It was a rigorous
one, and the objectives against which he was being assessed were
ones that had been agreed by the Ownership board of the RPA, including
the three or four independent members of that board. His assessment
against them—in other words, the bonus that he got—was
not a unilateral decision by me but was something that was advised
by those independent members.
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