Select Committee on Environment, Food and Rural Affairs Minutes of Evidence


Examination of Witness (Questions 1060-1079)

SIR BRIAN BENDER, KCB, CB

6 DECEMBER 2006

  Q1060  Chairman: It would be very useful to know when that occurred, whether it was at the end, the middle or beginning of the process, to understand where the thing started to unravel. One of the matters arising out of the report of the National Audit Office that intrigued me was that the Executive Review Group and CAPRI board were supposed to be keeping an eye on all that was going on. I do not get the impression that these boards were working properly. For the record, perhaps you can describe how you saw ERG's and CAPRI's function.

  Sir Brian Bender: The CAPRI function was a programme board of the process of implementing CAP reform and it had different strands: obviously, a policy development strand before the final policy decision was taken; an implementation strand; and a communication strand. But it was in programme management terms a programme board that oversaw it. The Executive Review Group was intended to bring things together to me, including Mark Addison and Andrew Burchill as chief operating officer and finance director in the department. It included the independent quality assurance person who was acting as a non-executive from National Grid Transco basically to check, challenge and quality assure what was going on. Among the various reviews that we have had along the way both the programme management and governance was something that the Office of Government Commerce was praising except for one or two questions that it had. There were a lot of other issues but they were not criticising the governance, and the inclusion of the quality assurance person pre-empted a recommendation that they made more widely across government.

  Q1061  Mr Williams: In answer the previous question you said that the whole system could not be tested until perhaps the last item had been completed. Did you mean by that the last part of the system or the last validated claim?

  Sir Brian Bender: If you want to test how it would work in the round you would have to have some validated claims as well, and in the memorable phrase used by Helen Ghosh that was when it gummed up. I guess that the question you are asking is: was it possible to pilot it? The answer to that would be some point between the last release and enough validated data coming in. It could not have been much before the turn of 2005 because the last release was still in the summer or autumn of 2005, if I remember rightly. Farmers were then beginning to return forms. It would have been pretty late in the day that piloting of this sort could have been done.

  Q1062  Mr Williams: What do you mean by "the last release"?

  Sir Brian Bender: There were a different number of releases for claims for validation and so on, so there would be different IT releases. Again, I would need to have my memory jogged on that.

  Q1063  Mr Williams: Is there any way in which ministers could have come to a conclusion about which system to adopt that would have given Accenture and the RPA more time to accomplish the work? I think that the decision was taken in November 2003 and announced in February 2004. You said that these discussions had been going on for quite a long time during the summer.

  Sir Brian Bender: There was that set of decisions and then the later decision in late 2004 when the critical path that the RPA was producing began to make clear that getting the payments out at the beginning of the payment window—December—was too ambitious. RPA as the agency responsible for implementation reviewed the critical path. They worked as appropriate with Defra colleagues and put the timescale issues to the programme board and then the Executive Review Group. It was at that point they said it was realistic to plan to make payments in February 2006. I remember saying to them at the time that we were now moving from the general to the specific and once we said it would be February 2006 we would be hoisted on that petard. While we said "as early as possible in the payment window" there was vagueness but once we went to February 2006 we had to be confident. Once ministers made that decision not only would they be disappointed that it was not December, which became clear, but we risked being hoisted on a petard. There was quite a lot of challenge about the reliability of February. I believe that it was around the end of 2004 and early in 2005 that there was a further opportunity to have that sort of conversation and indeed with ministers.

  Q1064  Mr Williams: But by then they were so far down the process of the dynamic hybrid scheme it was difficult to turn back.

  Sir Brian Bender: It could not have turned back on the dynamic hybrid, but it could have said, "Hang on. As we are slipping anyway, let us build in a bit more safety to make sure we get this absolutely right."

  Q1065  Mr Williams: Could there have been more time for Accenture and the RPA to deliver the dynamic hybrid system if that decision had been taken earlier in the process?

  Sir Brian Bender: There is no doubt that one of the difficulties in all this—it was not just the dynamic hybrid—was the lateness of some of the policy decisions. As I think Andy Lebrecht said to the Sub-Committee in May, some of those decisions depended on Brussels decisions. At a certain point which I do not remember, but probably in 2005, we started to make it very clear that the scope was being frozen and we would not implement anything more that came as a result of a Brussels decision so that in effect there was no excuse for the IT supplier either to charge a lot or say that this was now becoming too difficult. When the transcript is available I will check whether I have got any of the dates wrong and send either a letter with the transcript or some corrections if I have misremembered it.

  Q1066  Chairman: Just for the record, from the information we received Mr Lebrecht is said to have told the Defra management board that ministers expected the RPA to be in a position to make payments from 1 December 2005. That statement is supposed to have been made on 17 June 2004.

  Sir Brian Bender: It was around the end of 2004 early 2005 that the RPA assessed that as being un-doable and I think it was in January or February 2005 that Defra ministers announced it would not be December and the aim would be to get the payments in February.

  Q1067  Lynne Jones: Who was responsible for co-ordinating those elements of the overall business programme that were to be supplied by Accenture and who would be responsible for the rest of the programme?

  Sir Brian Bender: If you are talking simply about the RPA change programme—obviously there were other issues in relation to the environmental stewardship programmes that were being run elsewhere—this came down to the RPA management, and I simply do not know the extent to which it was Alan McDermott or Simon Vry below the chief executive. I certainly do not remember.

  Q1068  Lynne Jones: Accenture told us that it had had most contact with Simon Vry.

  Sir Brian Bender: Yes.

  Q1069  Lynne Jones: It also told us that there were no discussions with the RPA about what implications the selection of the model for delivering the single payments would have on its systems. Do you not find that extraordinary?

  Sir Brian Bender: Yes. I find it extraordinary and hard to credit, not least because there were revisions of systems. I do not understand that point.

  Q1070  Lynne Jones: Before the decision was made to go down that particular route Mr Naish told us that he was not aware of what discussions might have taken place.

  Sir Brian Bender: I feel a bit reassured because that would have been appalling.

  Q1071  Lynne Jones: Perhaps we ought to check with them exactly what discussions did take place.

  Sir Brian Bender: I do not quite see how the RPA could have advised on the complexity of implementation without having a talk with its IT supplier, which is exactly your point.

  Q1072  Lynne Jones: Yet in March of this year the chairman had a letter from Lord Bach, the then minister, basically saying that the view taken was that the impact of reform on the overall IT solution would not be significant. He was not saying that before the decision was taken but in March of this year, which is an extraordinary statement. I presume that civil servants must have helped the minister in drafting this letter. How on earth could such a statement have been made?

  Sir Brian Bender: There are two different points here. First, I find it hard to credit that there was not discussion with Accenture about the implications of the particular choice. There were negotiations with Accenture about altering the scope of the original contract to deliver single payment. That having been done, nonetheless it does not seem to me inconsistent with what Lord Bach said, which is that having negotiated those changes to the contract to widen the scope the IT supplier got on and did it.

  Q1073  Lynne Jones: But Accenture told us that the challenge presented by the change programme increased significantly as a result of the substantial reform of CAP schemes in June 2003. That is certainly not in accord with what Lord Bach told the chairman in March. I find it extraordinary that the minister, or even that the civil servants drafting the letter, should have had that impression.

  Sir Brian Bender: Would you read out again the passage from the letter?

  Q1074  Lynne Jones: The whole passage reads: "It should also be noted that RPA considered delaying the original procurement process until the true picture of the 2003 CAP reform agreement was available. It concluded this was not feasible or appropriate. The legacy systems needed replacement urgently, and the view taken was that the impact of reform would not be significant on the overall IT solution." That is the historic view so perhaps I am being unfair in quoting him at that time. Certainly, the view then was that it would not have a significant impact on the overall IT solution, which is remarkable.

  Sir Brian Bender: My brain is not working quickly enough. It does not seem to me that it need be inconsistent. Perhaps I can take that point away and see if there is anything I can say having looked again at that letter and talked to Defra colleagues.

  Q1075  Chairman: The NAO report is very critical of the relationships between the Executive Review Group which you chaired and the CAPRI board. I quote from paragraph 5.8 on page 23: "The changing role between the two boards led to some confusion among officials as to the respective remit of each board and who was responsible for making decisions. Proposals were often submitted to the CAPRI board for approval before discussion at the Executive Review Group and then being put to ministers for approval." It is a bit of a mess really. These two bodies which were supposed to be overviewing seem to have got themselves well and truly dragged into the running of the project. To me, it suggests that the line of objective advice to ministers about what was going on was blurred because the people who ought to have been giving objective advice were getting nearer and nearer to running the project. From the mountain of evidence we have received I recall that Mr McNeill expressed some reservations about this. He almost suggested that somehow he was no longer in charge of the whole project but that the CAPRI board was in charge of it. Did you ever get any flavour of this?

  Sir Brian Bender: Obviously, I do not know when that arose. I happen to have opened the NAO report at a page where it says: "The former chief executive confirmed to us his belief that CAPRI came to supersede his role as a senior responsible owner." First, he never said to me at any time up to the end of September 2005 that he felt his role was being superseded by the board. Second, the advice I was getting from OGC reviews was in no way critical of the governance arrangements that we had set up. I was not involved in commenting on the NAO report as it was being finalised; nor do I know the period in respect of which it makes these points, but the suggestion that the Executive Review Group was becoming too closely embroiled in it or that the programme board was superseding the role of the chief executive was not registered in my time, and he had plenty of opportunity to say that to me in private had it been the case.

  Q1076  Chairman: Did you think that the management overview and the relationship between the two boards was satisfactory? Did you believe that ministers were able to get a clear line of objective advice about what was going on from people who were not quite so close to the coal face?

  Sir Brian Bender: In effect, the advice was going to ministers at the critical middle and late stages often jointly from Andy Lebrecht and Johnston McNeill as the co-chairs of the programme board. These were not people doing the operation; they were the joint chairs of the programme board. Looking with hindsight at what went wrong, one of the questions must be the extent to which the challenge of advice at the Executive Review Group that was being shared with ministers was getting under the skin of what was going on at the RPA. In a way, I am stating only the obvious.

  Q1077  Chairman: I looked at some of the material which supposedly was the report back from Johnston McNeill to ministers. I speak now without having the benefit of the papers in front of me, but I remember that midway through 2005 there was a report which said there were 441,000 tasks to do and two or three minutes later it had gone to 720,000 tasks to do, yet onward sailed this project seemingly unaffected by the mounting tide of undone work. Nobody seems to say, "Excuse me, are we ever going to get there?" The whole flavour of the reports he was producing supposedly to brief ministers contained unbelievable optimism that somehow it would all be all right on the night and yet it was getting closer and closer to the then public timescale when payments would be reached. How on earth did this kind of overoptimistic reporting seemingly go unchallenged and unnoticed?

  Sir Brian Bender: By that stage there were well run in quantifiable assessments of the risks to successful delivery. I mentioned 60% earlier. In the summer of 2005 the probability of payment by 1 February was reduced to 40%. At that point the programme board or Executive Review Group discussed some propositions for reducing risk and they were put to ministers. There is a question about why there was a belief that it would work and why it was 60% and certain de-risking to keep it on the right side of 50%. But there was a lot of challenge and questioning and by that stage ministers were having regular meetings and were able to do that challenge and questioning themselves. It comes back to the question: did the RPA know sufficiently what was going on in their own organisation about their own productivity in using of the system?

  Q1078  Sir Peter Soulsby: I want to follow precisely that point. I should like to know precisely what discussions you had with the RPA and ministers at that point about the choices open to them. Do you think that in retrospect the right choices were made? Whose decision was it to rule out deferral as an option?

  Sir Brian Bender: Ultimately, it was the decision of ministers, but that is not meant as a cop-out. I think that it was in the summer of 2005 that the probability estimates fell so that at that stage the RPA assessment of the probability of commencing payments on 1 February was 40%, which increased to 75% if the date was slipped to 1 March. There was discussion at official level in the various groups. There were recommendations to ministers for actions that would increase that confidence level. For example, one recommendation that was put was to mothball what I describe as the non-RITA contingency solution because it was diverting resource effort. A second one, which comes back to the heart of this, was a deliberate decision which as Accounting Officer I was prepared to authorise to take measured risks that would speed up payments but on the other hand potentially increase the risk of disallowance. A number of specifics were arrived at to discuss at official level and put to ministers. I cannot remember whether the Secretary of State had a meeting, but I remember being at a meeting with Lord Bach where he discussed those. Certainly, those two decisions were taken. On that basis the probability of getting the first payments out in February was increased to a more comfortable level.

  Q1079  Sir Peter Soulsby: Am I understanding correctly that what was decided was to rule out the fallback rather than go for it?

  Sir Brian Bender: There are two different contingencies here. The one that Helen Ghosh mentioned at the previous hearing, which with hindsight she would have done differently, was to make sure that there were contingencies to make interim payments. I do not question that. The second contingency was to continue to use the legacy systems and have them ready to make payments. The advice that we were receiving at the time was that this was costly and a huge diversion of resource effort and was therefore unwise to continue.


 
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