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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