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


Examination of Witness (Questions 1240-1259)

MR JOHNSTON MCNEILL

15 JANUARY 2007

  Q1240  David Taylor: Is that not why it is working or not working?

  Mr McNeill: That is a fair point, I suppose. The difference was that when the system worked it did actually work as in you could process claims through the system. If it fell over there were a number of issues in there, one was its reliability and availability to our staff and there was a service credit issue which meant that we could go for breach of contract, in other words, "The system is here, it does work when it works but the fact is it is not reliable". We addressed that. Another issue we had with the Accenture systems, possibly as a result of the chops and changes that had been made to the system, was they were incredibly heavy on computer processing power. At one stage we were considering buying yet more computers, more hardware, to run the systems so heavy were they which is usually a sign, I was advised at the time, I think by OGC, of perhaps poor coding. It was something that would have been addressed in time by revisiting code structure and discovering why. That type of issue did arise.

  Q1241  David Taylor: What would merit the description "the system is working" is not a fleeting moment when the system does as was expected of it but that there are issues of stability and accessibility and timeliness and all those sorts of things and they are wrapped in with any reasonable understanding of what is meant by a working system, are they not?

  Mr McNeill: I accept your point fully. Are Accenture correct in saying the system worked? If you want to take the view that we put in a claim this end, went through a number of processes, including business interactions, and a cheque came out that end, then the answer is the system[17] worked. I take your point. If you are saying it only did that for two hours a day or it was not reliable or it was incredibly inefficient in terms of the amount of processing power then I can understand you might say it did not really work.


  Q1242 David Taylor: I think we have done to death the process-based and claims-based problems that were created by that but I do have one particular question which is at a level of detail. Because it was a hybrid system and, therefore, 10% of the payment was based on the three areas that Margaret Beckett announced in the April or so, did that not mean that in essence every claim had to be in before any claim could be paid, that element of the 10%, so that we knew what the areas were? Do I misunderstand that?

  Mr McNeill: No, you are quite right. To define entitlements we had a cake and we needed to know how many people wanted what section of it, I agree. What happened in the end, and there was extensive legal advice taken on it, was that we looked at the number of claims, some of which were fully through the validation process, others which had not quite made it through, and we took a view that we were able to define the entitlements.

  Q1243  Chairman: In that context, why was the mapping system such a source of failure? There were a number of letters, and I was looking at one only today to refresh my memory. In one case it was taking something like almost two years to sort out problems. When we had evidence from the Central Association of Agricultural Valuers they brought us examples of where they as professionals had worked out the correct maps but seemingly the system in the example shown to us was utterly incapable time after time of producing a validated set of maps. Why did that go so catastrophically wrong?

  Mr McNeill: It is an area of difficulty that I personally spent an inordinate amount of time on. I would suggest, whilst I try to answer it, that there are people in the RPA who could give you this in detail that would explain it. There were a number of issues. The volume of maps was a problem, ten-plus times the number of IACS 22s or requests for changes to maps that came through. We had the issue of 40,000 new customers who wanted land maps, so there was a volume issue. There was also a systems issue. The RLR[18] rolled out, as I recollect, towards the end of 2003 and there was an issue about the clumpiness of the system, the system was incredibly slow. I remember in that quarter the Ownership Board was in Exeter and Ian Watmore, who now heads up the Cabinet Office Performance Unit, noted to the RPA Ownership Board that were it his system he would put his fist in it, so appalled was he at the slowness of the response of the RLR system. I do not know if you remember the TV series Knight Rider, Chairman, but the staff called it the Knight Rider system because a little bar would come up whilst they were waiting for the RLR system to figure out what it was they were trying to map, et cetera. We had appalling problems with the RLR system there which had to be resolved. Then there was the issue moving forward from that, Chairman, that we were advised by lawyers, by Defra legal again, that the SPS scheme EU Policy interpretation required us to send every customer a set of RLR maps, which we did at the start of 2005, before they made their application under SPS. So we sent out all our maps detailing our understanding of customer holdings, and that created an absolute plethora of issues and requests that came forward about the RLR maps and that added to the difficulties where people had not seen all of their RLR maps and being aware that the SPS scheme was land-based farmers wanted to make sure that every boundary was right and every fence was right, et cetera. Another issue was the tolerance level we worked at on the system—we could have gone for a lesser tolerance—so we ended up with issues which were called "slithers" and this was where the boundaries were slightly out and you had a little slither between the two, whose land was it, et cetera. If we had gone for a broader tolerance we would have probably got away with a lot fewer problems. The difficulty was this was a major investment, a national asset, and the view at the time was that we needed to make sure that the system was as good as it could be, so that was a problem.


  Q1244 Chairman: And it was Defra's lawyers who set all these parameters?

  Mr McNeill: No, I am not sure about the tolerance one, Chairman, I cannot recollect where that came from. I am sure there are others in RPA who could advise you. I cannot recollect that. The issue that the Defra lawyers were clear about was to avoid disallowance we had to send out the RLR maps before the SPS claim process started. At the same time where changes were made to the maps, Chairman, we sent out an actual note of the changes. We would send a map and say, "These are the fields that we have changed" but we would not show the other fields in the way the system operated. That caused great concern to people who thought their other fields had disappeared, but if you read the letter RPA it is quite clear that the correspondence was about the fields you have adjusted as opposed to us sending all the maps yet again. That created difficulties. A lot of the queries were coming through the Customer Service Centre which just was not equipped to deal with mapping issues in terms of the fact they could not see the map on the screens, they were working on a Q&A brief, so they were of little help and, again, you had the cultural problem.

  Q1245  Chairman: So this was another failure of this task-based system not being fit for purpose.

  Mr McNeill: I am not sure it was task-based, Chairman. It is a failure of a move from where you used to be able to phone up John or Gill or somebody in your local office perhaps and explore these particular problems, you now came through this new route into the organisation and they were not set up to deal with you. We always knew, and I think it was the case, it was going to be a first year problem and I suspect as we rolled into the second year of SPS the number of letters in MPs' postbags was greatly diminished; at least I would hope so. We have now done it. There was a separate issue from this, Chairman, but which was related which was there was a linkage between the actual land and the fields the customer registered. You may recollect we sent out customer registration forms with the initial SPS applications and that created difficulties as well. There were also issues about the customer database and the land database as well. I suggest, if it helps the Committee, that the RPA be asked about this and I suggest in the first instance if you ask Simon Vry, he gave me a contact number to refresh my own memory on this, and I am sure he can put a note up to the Committee to assist you.

  Q1246  James Duddridge: In late 2004 the RPA identified about 23 changes to the IT system. The question I was going to ask—I think I need to ask you a prior question—was what discussions did you have with the Permanent Secretary and ministers about your alternative choices? Given I was quite surprised that you had only met Margaret Beckett twice perhaps you could put into context what access you had to ministers and the Permanent Secretary generally and then specifically in relation to those alternatives in 2004?

  Mr McNeill: I was very pleased to be able to work closely with Sir Brian Bender in his role as Permanent Secretary of Defra. I had a series of bilaterals with him, one a month. Brian was very close to the programme, he took an in-depth personal interest, as I am sure you have seen when he has given evidence here, chaired the Executive Review Group and, indeed, the RPA Ownership Board. I think our working relationship was very sound. He was particularly keen, and I think it is an important point which he himself has made, that the policy side and the operational side should work closely together, hence the creation of CAPRI Board[19] which was joint chaired by Andy Lebrecht and myself. I read that, Chairman, whether rightly or wrongly, as the issues we[20] attempted to resolve more on a verbal basis and in meetings and discussions rather than engaging in some form of memo warfare where "You are doing this and you realise this is going to do that". Our relationship was more of discussions at CAPRI Board and frank discussions. I had a number of discussions with Andy Lebrecht about particular SPS issues and concerns about policy delays, complexity, et cetera. I do not think you will find that minuted, Chairman, because the relationship was supposed to be one of working together to deliver the end product.



  Q1247 James Duddridge: We talked about the role of Sheila Watson in hopefully keeping the Secretary of State up to speed, but Margaret Beckett in 2005 was described in various places as "bloody livid" or in other places "angry" at the delay that was caused, yet her ministers and her special adviser had been kept in the loop throughout. Was this anger or being bloody livid more about PR or was it a genuine anger and confusion coming out of the Secretary of State's office in your view?

  Mr McNeill: I remember that quote, I cannot remember what the issue was.

  Q1248  James Duddridge: She was telling the NFU Conference on 21 February that she was "bloody livid with the situation", namely the two month delay.

  Mr McNeill: Yes.

  Q1249  James Duddridge: That rather surprised me because she had all the information coming through her minister, through her special adviser, what was she livid about?

  Mr McNeill: I think we were in similar confusion at the time and very concerned that we had staff who were working their socks off and, indeed, consultants working very hard, the whole RPA team working very hard to get this done and it was not very helpful in terms of staff morale.

  Q1250  James Duddridge: It strikes me as a bit of pointing of fingers. The RPA initially developed a stop-gap claims-based back-up system to make payments and that cost about £8.4 million. Why was that abandoned at the end of 2004? What was the rationale for that?

  Mr McNeill: We engaged with Xansa and Sunguard, two suppliers we had worked with on our legacy systems for some time, and they developed our legacy systems to enable us as a last resort to come off RITA (the Accenture system), and do the entitlements calculation and to work through to payment. We had a particular resistance to doing that because a major problem was the bulk uploads and downloads of data between systems, particularly when you had a very old legacy system and a fourth generation or whatever it was new system. This was one of the reasons why we took our time in reaching a decision to outsource the mapping to Infoterra, a similar problem downloading RLR files to them for them to update with the IACS 22s and then put back into the new RLR system. Our Director of IT and, indeed, others were very, very concerned that this might not work for us. As it was, thankfully, after some testing we were able to make it work. The reason we decided not to go ahead in 2004 with the contingency system was that we had had the delivery of the functionality to enable RITA SPS level one, level two validations working through to entitlements which had been tested. It was working, we had got them through and used them. In actual fact, the functionality that was left in the contingency package, RITA was ahead of it in some respects. Also we had done more testing on where RITA went from there through the RITA batch authorisations into customer payments. We had this contingency horse riding alongside the RITA development but, in actual fact, the RITA system was out first and we were satisfied that the contingency did not add any value. As we said, the actual RITA system did work. Can I just make one point. There was a serious tension with the contingency because Accenture and others, and Karen Jordan, I recollect, was giving advice that we needed to be extremely cautious here. Karen Jordan now chairs the Cabinet Office Audit Committee and has had tremendous experience with Transco and other large organisations in programme management. Karen Jordan—Helen Ghosh mentioned Karen—was very heavily involved in the programme of providing assurance to us and insight to us as to the best way ahead and, indeed, providing assurance to Brian Bender and Helen Ghosh. There was a concern[21] that you could deflect excessive effort, resources and expertise into building a contingency and as such the main programme, what you are trying to build, suffers. Accenture had that particular concern and voiced it regularly.


  Q1251 James Duddridge: I would like to turn on to your responsibility as the Accounting Office. I am fascinated by the lines of accountability. Did you ever speak to Brian Bender about considering getting a formal ministerial instruction in relation to the introduction of the Single Payment Scheme because of the risks of disallowing of value for money? In retrospect, is that something you wished you had done?

  Mr McNeill: No. I have made it quite clear here, Chairman, and Brian and others have quoted the same, we never turned and said, "This is not do-able". As I said, only at the fifty-ninth minute of the eleventh hour did we discover we had a problem which did not make it do-able. We thought we could do it with the elements of risk associated, of course, but we thought it was do-able.

  Q1252  James Duddridge: Can I ask about the nature and number of informal meetings you had with the Permanent Secretary just in the final months of 2004 and the early part of 2005?

  Mr McNeill: When Helen Ghosh took over from Sir Brian Bender and, indeed, when Mark Addison stood in for a brief period we continued with the monthly bilaterals which lasted about an hour. They were particularly frank discussions about where we were and what was happening. There was useful feedback from what was going on at the top of the office because, after all, we were based in Reading and were not as close to things that were happening in Nobel House in London, so it was very useful in that respect and also gave me an opportunity to give a very frank and thorough briefing as to where we were.

  Q1253  James Duddridge: Did special advisers sit in on those meetings?

  Mr McNeill: No.

  Q1254  David Taylor: It is the sixth anniversary this month of your appointment as Chief Executive of the predecessor body to the Rural Payments Agency and shortly after your appointment you appeared before our predecessor committee, the Agriculture Committee, and acknowledged that you were persuaded against your instincts into the job and one of the concerns you had was the IT background that you did not have. Would that be fair?

  Mr McNeill: I think that was the situation, yes.

  Q1255  David Taylor: The high priority for you at that time, February 2001, was to avoid flying blind. In the land of the blind the one-eyed man is king. Was your one-eyed man Alan McDermott, appointed on a very generous contract shortly afterwards? Was he the person that you saw as your backstop on IT matters, an area that you say was not a solid part of your CV?

  Mr McNeill: Yes. We went to quite significant effort to find the best person to fill the post of IT Director for the business. We went through a large recruitment organisation. As I recollect, we had some 30-plus applications. I had those analysed by a consultant from PA Consulting to split down those applications. This was personally, such was my concern about getting the right person. I looked at those in some detail with the consultant who was very experienced in IT and development programme management. We went through that and what became clear was that of that batch of applications, I do not know if it is standard in the industry, and this was after extensive advertisement, I seem to recollect, in Computer World and all of the international magazines, et cetera

  Q1256  David Taylor: But he was there for five years and what surprised me about this whole saga is that is a bit like the poem Macavity the Cat, that whatever happens he is not there, and yet I would have expected that he would have been at the core of what was happening in relation to the SPS system. Were you satisfied with his performance in regard to this?

  Mr McNeill: Sorry, yes I am rambling on about the appointment. The point I am trying to make is that it certainly seemed to me and, indeed, the panel that appointed him with external advice that he was the best candidate and certainly he had the experience. The point I was trying to get to was he had the experience of actually taking a programme from conception, in our case the enabling model, et cetera, and delivering it, and had done that in TNT, in an international environment, and from that point of view certainly appeared to be the strongest candidate. Alan joined us and played a full and, I felt, extremely valuable role in the organisation. He was not the only expert we had in IT, we had Glenn Rogers who came from California, a senior partner in Accenture, brought in not through Accenture but brought in separately to assist us.

  Q1257  David Taylor: But if he was the only expert in the IT area, something that was at the very core of the do-ability of SPS, I would have expected his views and recommendations to have been more apparent in the evidence that we have heard and the records that we have inspected. His presence does not seem all that obvious to me.

  Mr McNeill: I think I have explained the process of considering what the impact of the various policy options were, that was where Hugh Mackinnon and Bill Duncan would come back to our RPA Executive Board.

  Q1258  David Taylor: I am thinking about the IT side now.

  Mr McNeill: Alan sat on the RPA Executive Board, he was a RPA director, and he would input. As Hugh would talk about it from an operations perspective and Simon would talk about it from a programme management perspective, so Alan would talk about the IT consequences and what they meant.

  Q1259  David Taylor: So Alan would have said, "Johnson, it is do-able"?

  Mr McNeill: Yes.


17   Note by witness: RITA. Back

18   RLR: Rural Land Register. Back

19   CAPRI: Common Agricultural Policy Reform Implementation. Back

20   Note by witness: Andy Lebrecht and I. Back

21   Note by witness: "expressed by Helen Ghosh, the OGC and Accenture". Back


 
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