House of Commons - Home Affairs

Select Committee on Home Affairs Written Evidence

Third supplementary memorandum submitted by the Home Office

ANSWERS TO REQUESTED QUESTIONS FROM THE COMMITTEE FOLLOWING THE EVIDENCE SESSION

A. ANNUAL PERFORMANCE REPORT

1. PSA 1—The Data Limitations section of the Autumn Performance Report explains that "...quarter on quarter comparisons need to be interpreted carefully..." but gives no indication of how this should be done. How should the Committee interpret the quarter on quarter comparisons? Are there any seasonal adjustments made in the preparation of British Crime Survey quarterly updates?

No seasonal adjustments are made in the preparation of BCS datasets because each dataset contains a sample that is representative of a whole 12 month period. However, we have rolling 12 month datasets which are updated quarterly, eg July 2005-June 2006 followed on from April 2005-March 2006. This means that in any two consecutive datasets around three-quarters of the interviews are the same. We use standard statistical tests to check whether differences between estimates from two different time periods are likely to be real or due to chance (random variation). These tests are designed only to compare two independent samples and are therefore not suitable for making comparisons between successive quarters. For that reason, we restrict our comparisons between the most current 12 month period with the equivalent one 12 months previously (eg January-December 2006 with January-December 2005).

2. What proportion of the increase in offences brought to justice is accounted for by formal warnings for the possession of cannabis?

Between March 2004, when formal warnings for the possession of cannabis were introduced, and March 2006[23], the number of all offences brought to justice has risen by 250,000. Formal warnings account for 66,000 of this number, and so 26.4% of the increase over this period. Formal warnings now account for 5% of all offences brought to justice.

3. Is it possible to provide a breakdown of the offences brought to justice figure by those who have been convicted, cautioned etc for each of the previous years where offences brought to justice have been measured?

This information is contained in the table below[24].

Number of offences brought to justice over a 12 month period by outcome 1998-99 to 2005-06

England and Walesthousands of offences	Offences brought to justice (OBTJ)
12 months ending	Offences taken into consideration1	Penalty notices for disorder2	Formal warnings for cannabis possession3	Cautions4	Convictions	Total OBTJ
1999 March	105	—	—	260	737	1,103
2000 March	97	—	—	249	737	1,084
2001 March	87	—	—	229	679	996
2002 March	90	—	—	228	683	1,002
2003 March	99	2	—	225	712	1,038
2004 March	95	4	—	248	729	1,077
2005 March	106	49	39	268	688	1,150
2006 March (provisional)	117	110	66	327	707	1,327

1 Offences taken into consideration by the court and previously recorded by the police; figures for April 2004 onwards include offences not previously recorded.

2 Piloted in 2002 and introduced nationally in 2004.

3 Introduced in April 2004.

4 Includes reprimands and final warnings for juveniles.

4. How is the offences brought to justice target contributing to the prisoner population? Do you have the funds and capacity to deal with the extra offences being brought to justice?

Published Home Office modelling of prison population projections (Home Office Statistical Bulletin 11/06; July 2006) takes into account the 2007-08 public service agreements on crime reduction and offences brought to justice. This shows that the offences brought to justice target was expected to have a small impact on prison population, peaking at an additional pressure of approximately +300 places in 2007, and then gradually reducing to -100 places by 2013.

The increase in the prison population over the past 20 years is generally attributable to increases in the average sentences given, but more recently there has been an increase in the recalling of offenders to prison and a decrease in the use of home detention curfews. In response to these pressures on demand, the Home Secretary announced in July 2006 that NOMS will deliver a programme of 8,000 additional prison places by 2012.

5. The explanation provided for the Home Office not having met the "improvement in all areas" element of SR02 PSA 3 is that two Criminal Justice Areas had an unusually high volume of crime in the baseline year, and that unrealistically high sanction detection rates would have been required to meet the target. [25]Would a target based around sanction detection rates, rather than absolute numbers, have taken account of the volume of crime in any one year?

In calculating numeric targets for local criminal justice boards, a range of variables are taken into account. These include the current level of crime in an area, future crime reduction targets, sanction detection rates and any other recent performance issues. Many areas have been able to achieve improvements in the number of offences brought to justice at the same time as reducing levels of recorded crime. However, we acknowledge that where some areas have had significant success in reducing crime25 this has made it increasingly difficult for them to deliver more offences brought to justice over time.

Setting local targets based on sanction detection rates would have the effect of taking into account the volume of recorded crime in any given year. However, it would not adequately measure all criminal justice outcomes. Cautions, penalty notices for disorder, formal warnings for cannabis possession and offences taken into consideration are outcomes that qualify both as sanction detections and offences brought to justice. A charge or summons, though, while counting as a sanction detection, cannot be considered as an offence brought to justice until such time as a conviction is secured. Determining local targets on the basis of sanction detection rates would therefore not measure the success of the criminal justice system in prosecuting offenders, and would remove the incentive to improve efficiency in the courts by only recognising pre-court outcomes.

6. PSA 4—Who is providing and funding the treatment of drug misusing offenders entering treatment? What type and length of treatment are the offenders receiving, how many are not completing their treatment and what measures are in place to judge the effectiveness of the treatment programme?

Who is providing and funding the treatment of drug-misusing offenders entering treatment?

NHS Trusts provide the majority of medical treatment services for both drug using offenders and non-offenders, while the voluntary sector primarily provides rehabilitation services. Funding for drug using offenders and non-offenders comes from the same sources. In 2000-01, all Department of Health and Home Office drug funds/grants were placed into the Drug Pooled Treatment Budget (PTB). This is allocated to drug treatment providers by Drug Action Teams (DATs) partnerships on the basis of local needs assessments. Local DAT partnerships are responsible for ensuring that services are in place to meet the demand for treatment within allocated resources and operate to appropriate standards. To ensure fairness and equity, providers may have to take part in local competitive tendering procedures.

The PTB is supplemented in each DAT partnership area by additional mainstream funds from the NHS (Primary Care Trusts) and Local Authorities (social services).

What type and length of treatment are the offenders receiving?

Both drug using offenders and non-offenders should have access to the range of drug treatment services outlined in the Models of Care (which acts as a National Service Framework for the drug sector). The current treatment approaches include:

— Advice, information and assessment services.

— Needle exchange services.

— Specialist community prescribing services.

— GP prescribing services.

— Inpatient prescribing services.

— Structured one to one and group counselling services.

— Structured day programmes.

— Residential programmes.

— Aftercare services.

The length of treatment will depend on the individual assessments of each drug user's specific drug treatment and social care needs.

How many are not completing their treatment?

Department of Health and Home Office have made significant progress in delivering joint drug treatment programmes. Record numbers of drug users both offenders and non-offenders are entering and staying in treatment:

— 181,390 individuals were recorded as in contact with structured drug treatment services in England in 2005-06. This is a 13% increase on figures for 2004-05 (160,450) and an increase of 113% on the 1998 baseline of 85,000.

— 141,511 individuals (78% of those treated in the year) either successfully completed treatment in 2005-06 or were retained in treatment on 31 March 2006. 2004-05 figures reported 120,700 (75%).

What measures are in place to judge the effectiveness of the treatment programme?

The National Drug Treatment Monitoring System (NDTMS) is used to provide performance information on the numbers and characteristics of individuals accessing specialist drug treatment services.

The percentage of drug users admitted into treatment in the financial year, who were retained in treatment for 12 weeks or more was introduced as a proxy measure of treatment effectiveness in 2005. This measure examines early treatment experience across the whole treatment system and is considered to assess accurately, performance of treatment services and their programmes. This data is used by the National Treatment Agency to performance manage DAT partnerships.

7. SR02 PSA 6—The baseline for the "Class A drug use by vulnerable young people" element of the SR02 PSA 6 appears to have been changed from 2001 (13.3%) to 2003 (14.1%). This masks the fact that the latest outturn figures from 2005 (14.3%) are actually a whole percentage point higher than four years previously. Why has the baseline been changed?

No baselines were set for the vulnerable young people measures in the SR02 PSA 6 Technical Note, as the indicators were still in development. It was therefore decided that the baselines for the vulnerable group measures should be amended to reflect the published SR04 PSA Technical Note on young people and drugs, which gives a baseline for the target as 2003-04.

The change in the baseline makes no difference to the overall trend, which can be considered to be stable with no statistically significant change observed either from the 2001 or the 2003 figure when compared with the latest outturn for 2005.

8. Value for Money—How has the Home Office achieved the significant transfer of staff to the regions? For example, which Agencies or functions have transferred and where have they relocated to?

The 2006 Autumn Performance Report (APR) recorded 1,145 relocated posts. The principal blocks of posts include:

regionalisation programme

workers registration scheme

criminal caseworking

Phoenix transactional shared services centre

authentication by interview programme

New Asylum Model

Further plans include continuing transfer of IND functions outside London/SE, transfer of Criminal Injuries Compensation Authority posts to Glasgow and completing establishment of the Prison Service Phoenix shared service centre in Newport.

The following table breaks down the Value for Money (VfM) outturn numbers that were summarised on page 11 of the 2006 Autumn Performance Report (APR); it was first supplied to the Committee in November 2006 in response to 2006 Annual Report scrutiny questions.

Annual gains on a 2003-04 base in 2004-05 (£m) Of which,

cashable (£m)

in 2004-05 Annual gains on a 2003-04 base in 2005-06 (£m) Of which,

cashable (£m)

in 2005-06

Police 316 111 376 184

IND 305 295 191 190

NOMS 144 70 97 51

HO Reform 32 32 6 6

Other 47 46 70 52

Total 845 554 740 483

Cumulative Total — — 1,584

(adjusted for rounding) 1,037

We are now supplying two further tables, that (i) show how 2006 APR outturn of £1,954 million pa was made up, and (ii) that provide a corresponding break down of the £1,972 million pa estimated outturn that Sir David Normington reported to the Committee orally on 12 December 2006 (at this stage, these are internal unpublished numbers; we expect to publish updated numbers in the 2007 Annual Report).—see below.

2006-07

Q2 est outturn

(2006 APR) Annual gains on a 2003-04 base in 2004-05 (£m)

Of which, cashable (£m) in 2004-05 Annual gains on a 2003-04 base in 2005-06 (£m)

Of which, cashable (£m) in 2005-06 Annual gains on a 2003-04 base at Q2 2006-07 (£m)

Of which, cashable (£m) at Q2 2006-07

Police 316 111 376 184 196 120

IND 305 295 191 190 55 50

NOMS 144 70 97 51 57 32

HO Reform 32 32 6 6 6 6

Other 47 46 70 52 56 66*

Total 845 554 740 483 370 274

Cumulative Total — — 1,584 (adjusted for rounding) 1,037 1,954 1,311

*£10 million non-cash re-defined as cashable in final 2005-06 outturn.

Latest outturn at time of November 2006 HAC hearing

Workstream Total/£m

o/w cashable/£m

Policing 888 415

IND 551 535

Asylum support cost reduction 445 445

Other Operating Costs 106 91

NOMS 316 160

HMPS 137 79

NOMS HQ 105 75

Probation Service 74 6

HQ reform 44 44

Reduce posts 1,234 FTE 1,234 FTE

Other (eg central procurement, IT) 173 164

Procurement (incl Estates) 129 120

IT 45 45

Total 1,972 1,318

The tables show that gains in the three, large blocks of Home Office expenditure (policing, NOMS, IND) accounted for £1,755 million pa. Further gains worth £217 million pa were achieved in the headquarters, centrally managed procurement and in the consumption of IT; these gains were not drawn out separately in the APR.

The published technical note (http://www.homeoffice.gov.uk/documents/sr2004-value-for-money-tech-note/SR2004-Value-Money-Target?version=1) sets out how performance measurement, against Public Service Agreement targets and other performance indicators, helps to safeguard service quality alongside improvements in VfM.

Whilst our latest estimates show that the Department has now surpassed the 2004 Spending Review (SR2004) target (to achieve gains worth £1,970 million pa by 31 March 2008), we expect (i) to sustain existing improvements during the remainder of the SR2004 period, and (ii) to plan and begin to achieve additional gains to underpin performance and expenditure during the period 2008-09 to 2010-11.

9. SR02 PSA 7 contains a target to turnaround 75% of manifestly unfounded asylum cases within 28 days by 2005-06. The 2004-05 outturn against this target was 70%, but new figures for 2005-06 show performance has fallen to just 46%. Why are so many unfounded asylum cases taking so long to remove and how does this reconcile with the Home Office's improved performance against the Tipping Point target?

Since the implementation of Section 94 of the Nationality, Immigration and Asylum Act 2002 made provision for a list of countries, originally 10, from which asylum or human rights claims should be certified as clearly unfounded unless contra-indicated by the evidence, 17 further countries have been added in a carefully managed expansion.

The fast turnaround of "manifestly unfounded" cases is now highly dependent on being able to obtain travel documents from the national authorities of the claimant's country of origin. A number of countries to where removal was straightforward and did not require such documentation, have either been removed from the designated list as a result of EU Accession, or undergone dramatic reductions in intake following addition to the list.

The addition of sizeable intake countries requiring documentation from the national authorities has made meeting the target exceptionally challenging. However, efforts continue to be made to reduce the time-scales through discussions with those national authorities.

The introduction of a list of designated countries has resulted in a significant cut in the number of asylum applicants from these countries.

Intake for countries that were added to the NSA list on 1 April 2003 fell by 88% from March 2003 to May 2006. For those added on 23 July 2003 intake fell by 52% from June 2003 to May 2006 (excluding Bangladesh). Intake for India, added on 15 February 2005, fell by 44% from March 2005 to May 2006.

We are actively considering further countries for suitability for addition to the list so we can further prevent failed asylum-seekers from attempting to frustrate their removal from the UK by unnecessarily prolonging the appeals process.

B. RESOURCE ACCOUNTS

10. The Comptroller and Auditor General identified significant weakness with financial controls: what steps are being taken to address these?

Our Finance Improvement Strategy is well underway. It is a four phase programme over three years and we are in the second phase. We have obviously tried to address the most fundamental issues first.

Finance Improvement Strategy

The Finance Improvement Strategy comprises four phases.

— Consolidation is complete. We have undertaken a detailed assessment of the risk and controls environment;

— Stabilisation—we are implementing actions from the remediation plan and are moving to timely and accurate reconciliations where these are not already in place;

— Sustain—we will further embed an enhanced culture of financial control across the organisation. This will become our chief focus in April 2007;

— Building excellence—this will developed from September 2007 onwards.

Financial Improvement—key action taken to achieve improvement in accounts production and financial control:

— The financial accounting function has been relocated and there has been significant restructuring within the Accounting and Finance Unit;

— The number of professionally qualified staff involved in accounts production has more than doubled, more are being recruited and a training programme is in place so that all staff are appropriately skilled and to increase the resilience of the team;

— The accounts production process has been strengthened;

— A strong leadership team is in place and an Assurance Board has been set up to provide regular and systematic oversight of the improvement programme. The Board includes representatives from the National Audit Office, HM Treasury and Audit Committee. The Audit Committee and Permanent Secretary oversee progress of the programme;

— A senior advisor on financial management has been recruited from HM Treasury to help drive forward the wider Financial Management reform programme.

The Comptroller and Auditor-General has acknowledged progress made, stating that "the Home Office has worked to address many of the fundamental problems in the 2004-05 accounts and has been able to provide a much improved set of accounts for 2005-06. This situation represents a significant step forward for the Home Office".

11. How will the department's ongoing reform programme deliver improvements in financial management? What action is being taken to develop the skills and knowledge of Home Office staff involved in financial management?

The Financial Improvement Strategy (described above) is designed to improve financial controls and the accounts production process. One element of this is to provide training and support to the finance community. The Head of Finance Professionalism Team is taking a range of measures, including delivering training for budget holders and finance managers.

Alongside this, one of the four strands of the Reform programme is to create a Home Office "with resources matched to priorities".

The objective of this strand is "to ensure that we have systems and behaviours so financial and operating decisions are both planned and prioritised to operate within constraints". Projects within the strand concern:

— Financial allocations process.

— Financial reporting and ministerial involvement in decision-making.

— Decision making processes.

— Planning.

Organisation for policy making

All of these projects will contribute to improved financial management. The second project, in particular, aims "to improve our financial decisions by improving the quality and timeliness of financial information and explaining the implications of financial decisions". Steps to achieving this include:

1. Improving the presentation and accessibility of financial data to different audiences, in particular Home Office Board members and Ministers to increase their engagement with and awareness of financial management issues;

2. Improve timeliness, accuracy and context of financial information available to decision-makers;

3. Improve financial awareness and capability across the Home Office including through better quality training and guidance focused specifically at the needs of different finance roles;

4. Establish our accounting system Adelphi (the Oracle based ERP system) as the recognised single definitive accurate source of financial information.

12. The department has written off £27.6 million on the Bicester Asylum Accommodation Project, and approximately £4.7 million on police force mergers (note 33). Why weren't these projects stopped sooner?

Bicester Accommodation Centre

The Bicester Accommodation Centre project was halted in June 2005 when it became clear that the costs of proceeding would outweigh the benefits that such centres could bring to the system. In particular:

(a) The rate of asylum applications fell sharply in the preceding period (the monthly rate, which peaked at over 8,000 in 2002 was a little over 2,000);

(b) Significant progress had been made in the efficient handling of applications;

(d) IND's five-year strategy, published in February 2005, introduced the concept of the New Asylum Model, with a remodelled approach to dealing with asylum applications; and

(e) Delays to the Bicester project caused by planning and judicial challenges promised to increase the costs of the centre.

The confluence of these changes in early 2005 meant significant revisions to the assumptions about the speed of processing and the cost of accommodation upon which the case for Accommodation Centres had been made. It was against this background that a reassessment of the case was put to incoming Ministers following the 2005 general election and a decision was made in June to terminate the project.

Police force reform mergers

Costs and savings associated with the police restructuring programme were refined in early 2006 towards the end of the consultation period with forces and police authorities. When robust figures were available, Ministers decided the costs outweighed the benefits and that the programme should be wound down. Ministers also decided that some compensation for costs already incurred by authorities would be appropriate.

13. Why is the financial performance against the budgeting boundary (reported over pages 9-12 of the Resource Accounts) only "estimated" for 2005-06? When will these figures be finalised and what would subsequent changes mean for the department's future resources?

Resource accounts and resource budgets are prepared on different bases. The final budgetary outturn can be determined only after adjustments to the resource accounts are finalised and audited by the NAO. Due to the short period between finalising the resource accounts figures and signature of the accounts by the Accounting Officer by 30 November statutory deadline, it was not possible to process budgetary impacts before the accounts were signed off. Final outturns against budgets will be published by HM Treasury in the Public Expenditure Outturn White Paper in the summer.

14. Why were the appropriations in aid for the Passport Service so significantly underestimated? What plans are there for the surplus generated by the Passport Service?

Due to the increased focus on identity authentication, the cost base of the Passport Service has increased significantly in recent years, resulting in increased passport fees. Furthermore, cheaper overseas travel has generated a large increase in passport volumes. Although the impact on costs and income was factored into resource budgets and monitored on a monthly basis, the changes were not fed through when drawing up the Estimates to be presented, resulting in limits for Appropriations-in-Aid and expenditure that were too low. The Management Accounts team responsible for monitoring the Home Office budgeting boundary has now taken on responsibility for monitoring the Estimates boundary to ensure that this problem does not recur.

In accordance with the Treasury's Fees and Charges Guide, statutory fees are approved by Treasury on a full cost recovery basis. Due to the significant fluctuation in the cost base of the Identity and Passport Service projected between 2005-06 and 2006-07, the Treasury approved a fee smoothing arrangement expected to deliver a surplus of £15 million in 2005-06 to be offset by a deficit of £15 million in 2006-07. The 2005-06 surplus will be made available to IPS as End Year Flexibility in the Spring Supplementary Estimate 2006-07. The increased costs anticipated in 2006-07 relate to:

— the development and roll-out of the Authentication By Interview programme which involves authenticating the identity of first time adult applicants by interviewing them in person. The programme has involved the acquisition and depreciation of a network of local offices;

— the roll-out of the Personal Identity Process (PIP) biometric footprint checks to all offices for all first time adult applicants; and

— the complete roll-out of the E-Passport which contains additional security features and a biometric chip.

15. Page 18 of the Resource Accounts (section entitled "Future Developments") states that the Home Office will be undertaking "a number of Zero Based Reviews in areas such as the police workforce, probation, asylum, police IT and drugs". Why have these areas been particularly singled out for Zero Based Reviews and how will you use the results of these reviews given that the Home Office Comprehensive Spending Review budget settlement has already been announced?

These areas were chosen in conjunction with the Treasury for a range of reasons; they represented a significant area of spend in the overall Home Office budget, they were areas of significant growth since the last CSR in 1998, service delivery is regional or local so options for comparison and benchmarking could be considered.

The results of the Zero Based reviews will inform the internal budgeting process for the Home Office and contribute to our Value for Money programme. They will allow us to focus on our core objectives of protecting the public and continue to deliver value for money for the taxpayer.

16. The Statement on Internal Control notes that the Board is looking to reduce the level of risk exposure faced by the Home Office in future years. What are the current high level Home Office risks? Exactly how is the Home Office Board managing these on a weekly basis? How is the Department's reduced risk appetite likely to impact on resources and the achievement of particular PSA targets? Which particular risks are less likely to crystallise in future as a result?

What are the current high level Home Office risks?

Risks are assessed and regularly updated at a number of levels in the Home Office. Current top level risks cover the threat of terrorism, prison capacity, processes and systems, and skills and capability issues.

Exactly how is the Home Office Board managing these on a weekly basis?

The Home Office Board discusses risk every Monday morning at the weekly senior managers meeting. This meeting is attended by Home Office Board members and by the department's senior directors. Each week one or more of the departmental corporate risks, or the risk register of a business area, are examined. The Board agreed to discuss risk in this way so that the department's senior directors could see for themselves, at first hand, how the critical risks to the department were being handled, and to appreciate the priority the Board set on managing them. Risk is also a standing item on the quarterly Home Office Board meeting agendas, where the Board look at risk in more depth.

How is the department's reduced risk appetite likely to impact on resources and the achievement of particular PSA targets?

The Board's risk appetite is one of the factors that influence resource allocation decisions. For example:

— the department is increasing the investment in prison places;

— it increased the resource input into the preparation of its accounts; and

— in the future the department may consider the trade-offs between the quality and quantity of non-financial information.

In these examples the Board seek to reduce the department's risk exposure in areas they have determined to be corporate risks.

In some cases the risks are related to PSA targets for example:

— In order to reduce the likelihood of a failure of the performance management framework the Board invest resource in terms of their own time, commissioning advice from performance analysts and ensuring that staff throughout the organisation see the improvement of performance as part of their role. Good quality performance management will help us deliver the outcomes expressed as PSA targets.

And many of the Home Office PSA targets seek to reduce risks to the public and so the PSAs are therefore aligned with the Department's reduced appetite for risk. However, the PSA targets do not seek to cover the full range of activities undertaken by the Home Office, whereas the Home Office approach to risk management does.

Which particular risks are less likely to crystallise in future as a result?

The department has mitigating actions in place for all its corporate risks which reduce the likelihood that they will crystallise and/or the magnitude of the impact if they were to crystallise.

17. Could you provide the Committee with an update on the number and percentage of temporary staff in the Accounts and Finance Unit? Why are you experiencing such difficulties in recruiting permanent staff?

75% of all AFU staff (including the Adelphi Service Centre) are permanent. The number of permanent staff in the Accounts branch has increased from two to 14 over the last year.

18. What were the reasons for the problems with reconciling payroll and personnel data? How many staff does the Home Office employ (Q7)?

The Home Office used to hand over files to the receiving Departments when somebody transferred from the Home Office to another Department and this created problems in tracking the number of staff employed by the department. Copies are now kept of personnel files for staff moving to Other Government Departments, to retain evidence for the NAO.

Home Office passed NAO audit this year by producing satisfactory evidence of employee existence (such as photographs held by the Departmental Security Unit for passes, and system access records).

The number of whole time equivalents employed by the Home Office for all bodies included in the Consolidated Resource Accounts is 89,494 (this includes HM Prison Service, National Probation Service, UK Passport Service, and the Criminal Records Bureau). There is 20,371 permanently employed staff within the core Home Office. Figures quoted are per Note 9 of the Home Office Resource Accounts and relate to the period up to March 2006

(Please note: The figure of 77,840, which was provided to the Committee in response to question 7 (Mr Streeter), relates to October 2006 and excludes National Probation Service Staff).

19. Can you confirm how many employees were dismissed from the Home Office in 2005-06. It would be useful to have a breakdown by reasons for dismissal and pay band; and comparative figures for the past 10 years both for the Home Office and for Government overall

— 530 staff were dismissed from the HO and its agencies between 1 April 2005 and 31 March 2006. Of these 111 came from Core or IND, 392 from HM Prison Service and 27 from Identity and Passport Service. [Data from ADELPHI, for Core and IND and from the HR units of HPMS and IPS respectively]

— Of the Core and IND figure (111): 56 were dismissed for inefficiency and 55 on disciplinary grounds.

Available historical data for Core including IND, and agencies are listed in table below

CORE & IND

Dismissal type 1996 1997 1998 1999 2000 2001 2002 2003 2004

Disciplinary Grounds 13 16 9 4 13 27 32 34 13

Inefficiency 5 8 4 12 10 10 22 65 12

Other 0 0 0 0 0 0 0 2 5

Total (Core and IND)1 18 24 13 16 23 37 54 101 30²

1 Data 1996 to 2004 is from the archive of the Home Office personnel system. A small number of dismissal cases which cannot be broken by department have been removed to prevent possible double counting with agency figures below.

2 Data to close of PIMMS (personnel manpower management system) August 2004.

HM Prison Service1

Dismissals	2001-02	2002-03	2003-04	2004-05	2005-06
Total1	179	272	366	562	392
1 The number of dismissals from the Prison Service increased significantly in 2003 due to a greater number of medical inefficiency dismissals as a result of more robust management of sickness absence from that time. The information includes dismissals for: inefficiency, conduct and performance reasons.
IPS Dismissals	2001-02	2002-03	2003-04	2004-05	2005-06
Total	34	33	23	21	27
20. What is the timetable for producing the 2006-07 Resource Accounts? Does the NAO concur that your timetable is realistic and achievable?

The deadline for completion of the 2006-07 Resource Accounts is 30 September 2007. The accounts will be laid when Parliament reconvenes after the summer recess.

The NAO have agreed and are keen to keep to this realistic timetable in order to ensure that quality is retained and improved.

21. Note 1.12 to the Resource Accounts explains that classification of administration and programme expenditure changed in 2005-06. Please can you tell the Committee which Home Office activities were affected by this reclassification?

As part of the Spending Review 2004 settlement covering the years 2005-06 to 2007-08, the Treasury agreed to re-classify the following areas of expenditure from administration to programme:

— Prison establishments on the basis that keeping in custody those who have been committed by the courts represents frontline service delivery. With the creation of National Offender Management Service, the scoring of prison establishment costs needed to be aligned with the costs of the probation service which fall within programme.

— Immigration and nationality work where asylum caseworkers and immigration officers at ports and airports provide frontline services.

Several departments were affected by this round of reclassifications in response to the recommendation made by Sir Peter Gershon in his report "Releasing resource to the front line: Independent Review of Public Sector Efficiency". The reclassifications were set out in HM Treasury's Public Expenditure Statistical Analyses 2005 (PESA).

22. The auditors' remuneration and expenses for the core department have increased from £137,000 in 2004-05 to £557,000 in 2005-06 (in Note 10). To what extent does this represent the extra work that the NAO had to do as a result of the poor financial management in the Home Office?

The increase in the audit fee is due to increased costs incurred by the NAO in auditing the 2005-06 Resource accounts. For example re-auditing the 2004-05 Balance Sheet and adopting a fully substantive audit approach in response to the issues raised in the 2004-05 Resource accounts which required additional NAO resource.

23. Note 13 shows that the Home Office's non-departmental public bodies spent £800 million (42%) less in 2005-06 than in 2004-05? How is such a large variance explained?

The variance of £800 million relates to an error made in the disclosure of the National Probation Service grants balance within the non-departmental public bodies spend in the 2004-05 accounts. The National Probation Service costs and expenditure should be eliminated on consolidation of the Departments account and should therefore not be disclosed within spend on Non-departmental bodies within note 13. The value of the National Probation Service grant for 2005-06 was £778 million.

The Home Office 2004-05 accounts were disclaimed by the NAO, and the Home Office took the decision as part of the 2005-06 accounting process to restate the comparative Balance Sheet balances, but not the Operating Cost Statement and associated notes. The reason for this decision "was that to fully validate the 2004-05 income, expenditure and cash flow figures would have involved both undue cost and delay on the part of both the Home Office and the NAO, and would potentially jeopardise achieving the best audit opinion on the 2005-06 figures" (extract from NAO's draft Management letter).

The issue over providing comparatives numbers has been disclosed in note 1.23 of the 2005-06 Home Office Resource accounts. The NAO qualified the 2004-05 comparatives for the Operating Cost Statement and associated notes in the 2005-06 accounts.

24. The fees and charges raised by Leave to Remain activities have generated a surplus of over £31 million. What plans are there for this surplus? How much of it will be spent increasing enforcement efforts?

Fees and charges raised from Leave to Remain applications need to be seen in the context of the overall income from Managed Migration charging streams. Fluctuations in volumes of activity and costs (including overheads, allocated to income streams on an estimated basis) mean that there will inevitably be surpluses and deficits on each activity.

Leave to Remain fees changed following a review in April 2005. In setting the revised fees, an element was included to recover deficits totalling £12 million in previous financial years, as allowed for in Treasury's Fees and Charges Guide. The fee for 2006-07 was left unchanged at 2005-06 levels and this, along with a reassessment of the costs attributable to Leave to Remain applications, means that a deficit is forecast for 2006-07 which will offset the 2005-06 surplus. The surplus is not therefore re-directed.

The budget allocated to enforcement activities has increased from £142 million in 2005-06 to £177 million in 2006-07.

25. The Home Office's London headquarters at Marsham Street is provided under a 30 year PFI contract. What impact is the reduction in staff numbers at the Home Office having on the costs of servicing this contract? Is there any scope to make savings on the contract if the building is not fully occupied?

The 2MS contract allows for an automatic reduction in facilities management costs should our requirements fall below 3,278 workstations. Should we vacate space completely we have the ability to offset its costs by way of sub-letting to other Government Departments or public bodies or to non-Government occupiers. At present we do not envisage having vacant space in 2MS, instead we will dispose of other buildings in central London and continue to implement our strategy of a single London HQ building.

C. WINTER SUPPLEMENTARY ESTIMATES

26. Additional funding of £1,000,000 has been received from the Department for International Development for the resettlement of failed asylum seekers in their own country. On what basis has DfID become involved in the resettlement of failed asylum seekers?

DFID has not become involved in the resettlement of failed asylum seekers; this remains a Home Office responsibility. The £1,000,000 transfer from DFID does not support specific projects or DFID objectives; it is a one-off transfer of budgetary provision allowing the Home Office to deliver its migration objectives.

27. The Estimate contains an internal transfer of £29,815,000 for 2006-07 to fund additional prison capacity. How many more places will this fund, where and by when? What will be the total cost of providing 8,000 additional prison places? How have budgets been adjusted to cover the revenue cost of maintaining extra prison places in future years?

  The £29,815,000 provided; 225 extra prison places in the financial year 2006-07, baseline funding for places in 2005-06 and ongoing construction costs. The 225 places are located as follows:

— Preston 70 places April 2006

—   Durham 60 places November 2006

—   Dartmoor 15 places January 2007

—   Parkhurst 3 places August 2006

—   Wormwood Scrubs 17 places November 2006

—   Wandsworth 20 places December 2006

—   Nottingham 40 places November 2006

The 8,000 place programme, which is currently undergoing the business case approval process, has forecast costs of around £1.5 billion capital and £350 million ,annual running costs when completed (at 2012-13 estimated price base).

The NOMS indicative budget for 2007-08 includes £50,000,000 resource for the in-year cost of the 8,000 programme; future years' indicative budgets are not yet finalised.

28. The Estimate Memorandum explains that Departmental Unallocated Provision (DUP) has been used for CRCSG (£40,000,000) and the Identity and Passport Service (£14,450,000) to ensure that "delegated budgetary authority is backed by the appropriate level of Voted provision". Please can you explain this further for the Committee?

Timing differences between the preparation of the Main Estimate and the conclusion of the Department's internal budget delegation processes, which are carried out within the overall parameters of budgets agreed for the Home Office by HM Treasury, mean that some adjustment is required at the Winter Supplementary Estimate to bring the two into line.

In this particular instance the budgets delegated to CRCSG and the Identity and Passport Service were increased by £40,000,000 and £14,450,000 respectively. These increases in budget were funded from the DUP, which for Home Office Estimates purposes is a non-Voted item. The transfers in the Winter Supplementary Estimate therefore represent movement from non-Voted to Voted in order to ensure that Budgets are matched by Voted provision.

29. To what extent is the use of DUP for administrative purposes (£4,000,000) related to the costs of implementing the Home Office's reform plan and addressing the deficiencies in financial management across the department? What is the expected total cost of the reforms?

None of the money drawn down from the DUP was for the Home Office Reform Action Plan published on 19 July 2006. The total costs of implementing that reform plan are difficult to quantify given the wide range of activities in the Home Office leading to change in the way in which resources are deployed and the value for money that is achieved.

£3 million of the £4 million drawn down from the DUP relates to the corporate services modernisation programme, which includes projects such as redeveloping web space and the department's intranet, implementing an estates shared service and an electronic data records management system. An additional £400,000 was drawn down to bolster the financial accounts team in preparing the Resource Accounts and improving the department's financial capability."

30. The ambit of the vote has been amended to include the provision of loans to refugees. How many loans does the department expect to grant, and at what value? For what purpose will the loans be made available and what will be the terms of repayment?

The Integration Loan Scheme backdated income related benefit payments. Individuals granted refugee or humanitarian protection, and their respective dependants, will be entitled to apply for a loan. It is intended that the loans are made available for items and activities that facilitate integration such as:

— vocational training where provision is not available through Job Centre Plus;

— a deposit for accommodation;

— buying essential equipment for the home; or

— the purchase of tools of a trade.

It is believed that a system of integration loans is a fairer and more cost effective one, in the sense that a loan will be based on an individuals' integration needs, whereas back payments are based only on the time taken to determine an asylum claim.

The amount of each loan will be dependant on individual circumstances, in particular the purpose for which it is requested, the individual's financial position and ability to repay it. The minimum and maximum loan will be £100 and £1,000 respectively. In the vast majority of cases repayment will start six weeks after award of the loan. Applicants on income related benefit will have repayments taken at source at the prevailing third party deduction rate for arrears (for 2006-07 this is £2.90 per week). Repayment for individuals not on benefit will be negotiated on a case by case basis taking into account the amount awarded and ability to pay.

Numbers of likely applicants will depend on the numbers granted status as above in any given year. Estimates have been based at around 4,000 for 2007-08.

D. CAPABILITY REVIEW FOLLOW-UP

31. Can you please list the changes to senior management mentioned by the Home Secretary (Q1) and explain how these changes have strengthened the management of the department?

Our Reform Action Plan, published in July, suggested that we needed a significant improvement in the capacity and capability of our senior leadership.

Since then we have:

— Appointed more experienced and capable individuals to existing roles;

— Created new roles where there was a need for greater focus and leadership;

— Abolished or merged roles where this was necessary.

All of these posts and vacancies have been filled with high calibre people who have the skills to make a real difference, whether from inside or outside the Home Office.

Since July three new Board members are now in post:

Chief Executive of the Identity and Passport Service (James Hall);

Director General of Performance and Reform (Peter Makeham); and

Non-executive director and Chair of the Audit Committee (John Heywood)

We have also appointed two new non-executives to the Board of the Immigration and Nationality Directorate.

At Director level, we have new individuals in the following posts:

Chief Information Officer, Identity and Passport Service (IPS)

Human Resources Services Director

Enforcement and Removals Director, IND

Director of Leadership and Learning

Resources Director, Crime Reduction and Community Safety Group

Shared Services Director

Crime and Drugs Strategy Director

Director, Commissioning and Partnerships, National Offender Management Service

Director, Performance and Improvement, National Offender Management Service

Policing Policy Director

Commercial Director

Resources Director, IND

Human Resources Director, IND

In addition, the following posts have been abolished or merged into other posts:

Director Strategy

Director Specialist Crime

Director Corporate Development and Services

Director of Change, National Offender Management Service

Other appointments which have been made, or will be made in early 2007.

Director General HR, Home Office

Director of High Security Prisons

Director of Communications

HR Director, HMPS

Commercial Director, IPS

32. Have all the Home Office Directors now been subjected to the skills assessment promised in your Capability Review Action Plan? In what areas is the department deficient?

The vast majority (95%) of Directors who were in post in July have now completed their assessments.

The assessments showed that the department's Director cadre demonstrated high levels of commitment and loyalty. Areas for development were people development, marketing skills and programme and project management.

The skills assessment is now well under way for the rest of the senior civil servants in the Home Office.

33. How has the governance below the Home Office Board level been strengthened? Have "contracts" between Ministers and officials been drawn up and what are the implications for public accountability of civil servants?

We have reviewed the management structures of each of the main Home Office businesses and major changes have, in particular, been made to the senior management boards of the Immigration and Nationality Directorate, the Identity and Passport Service and the National Offender Management Service.

We are also strengthening the structures supporting the overall Home Office Board, including the creation of a smaller Home Office strategic centre.

A "compact" between Ministers and the Home Office Board has been agreed and is attached. This clarifies the relationship between Ministers and the Home Office Board and makes it clear that the heads of our operational services will be increasingly expected to answer externally for operational matters for which they are responsible, whilst Ministers remain accountable to Parliament for Home Office policy and performance.

34. The capability review criticised the Home Office's ability to take a corporate approach to planning and resourcing. How have you reconfigured your Board and other structures to better link strategy, planning and resourcing?

Since the publication of the Capability Review and the Home Office Reform Plan, we have taken a number of steps to strengthen our corporate approach to planning and resourcing.

The Home Office Board now considers financial reports on a monthly basis. Since July we have carried out a mid-year review to bring our budgets back into balance and we have also developed a systematic plan for considering our options for the next spending review period. This includes a half day workshop for the Home Office Board in February.

We have already made some difficult decisions in order to match our resources to our priorities. This includes stopping or re-phasing a number of projects that we cannot afford.

35. You have committed to making large savings in central headquarters costs. What have you done during this financial year to reduce your headquarters and move these resources to the frontline?

By the end of December 2006, we had reduced head office by 1,475 posts against our published baseline. The total includes around 700 reductions made so far in the financial year 2006-07.

We have also strengthened the front line. Since March 2004 we have increased the numbers of customer-facing and operational staff by 3,952. These numbers include 298 frontline immigration staff (from Assistant Immigration Officer to Inspector) and 301 extra operational staff in our prisons.

36. What progress has been made on refocusing your strategic policy function ensuring that it is focussed on corporate and Ministerial strategic priorities and giving it the teeth it will need to be "more influential" and able to set strategic direction and allocate resources?

We have made progress in developing the new strategic policy function for the Home Office and have met our commitment to have an outline of that function agreed by December 2006. In parallel with this, we have established a Strategic Policy Network of Policy Directors from across the Home Office to support the Home Office Board.

We are also looking to ensure that strategic policy-making is closely tied in to the financial allocation and business planning processes of the Home Office and is aligned with other corporate strategies such as information technology, human resources and procurement.

37. You have undertaken to "free up Ministers to focus on strategic and policy issues within the Department". What practical steps are you taking to ensure that Ministers are engaged at the right levels in setting strategic priorities?

As already highlighted in response to question 33 a "compact" between Ministers and the Home Office Board has now been agreed. This supports and underpins other changes to structures, processes and behaviours by clarifying how business is to be conducted between Ministers and officials. The compact makes it clear that Ministers are responsible for setting the overall strategy and policies of the Department. In support of this, we are developing new corporate processes to support planning and decision-making at a strategic level.

E. HOME SECRETARY'S EVIDENCE

38. Could you confirm that the Home Office remains on course to achieve its target of having 16,000 Community Support Officers in place by the end of 2007 (Q81)

The very latest data for recruitment up to 6 December 2006 (provided by forces to the Association of Chief Police Officers) shows that PCSO numbers have now risen to 10,389.

At national level an advertising campaign, supported by PR activity and an advertiser funded programme on ITV1 about the work of PCSOs in neighbourhood teams, has already generated 41,000 requests for application packs from the general public with 5,400 applications having been received. Work is underway to follow up the requests for packs which have not yet resulted in an application.

Forces are working successfully to recruit the target number of PCSOs within a demanding timescale (to recruit 16,000 PCSOs by the end of April 2007). We are confident that forces are working very hard to achieve the target in support of our commitment to neighbourhood policing in every area by April 2008.

39. Could you provide more information on the Government's plans for getting ex-offenders into work (Qq44-45)?

The cross Government National Reducing Re-offending Delivery Plan, published in 2005, sets out progress made against the action points in the National Reducing Re-offending Action Plan, and Government objectives across the seven pathways, including Education, Training and Employment. It includes the aim of developing "strategies nationally, regionally and locally for engaging employers in providing jobs for ex-offenders".

The Reducing Re-offending Corporate Alliance, which was launched last year, is the umbrella under which the employment of offenders is promoted to employers in the public, private and voluntary sectors, particularly those experiencing recruitment difficulties and skills shortages. A menu of options, which will propose different levels of engagement for employers, from offering advice and mentoring for offenders looking for work, through to running work trials, providing permanent jobs and making the business case to other employers, is being developed. The Alliances are being developed and delivered through integration into the regional reducing re-offending strategies and local plans.

The cross-government Reducing Re-offending Through Skills and Employment Next Steps document, launched in December 2006, sets cross government proposals to drive forward with three priorities:

— A strong drive to engage employers through the Corporate Alliance, linked to the Skills Strategy and the outcome of the Leitch review of skills, working with employers to design and implement new models of training and preparation for jobs;

— Building on the new offender learning and skills service, including the campus model, which has among its key features a focus on employers' needs, an employability contract as part of the sentence plan to motivate offenders and focus resources where they will have most impact, and more flexible access to skills and employment support, with effective use of ICT.

— Using the new commissioning role of the regional offender managers to build a new emphasis on skills and jobs in prisons and probation, using Unpaid Work in the community and work opportunities in prisons, with a particular focus on developing the workforce to deliver this.

We are mapping the current level of activity in order to ensure that we capitalise on existing links between employers and prisons and probation areas—currently prisoners from the open and resettlement are engaged in paid or unpaid work with over 400 employers.

The Department for Work and Pensions, through the National Employment Panel, is appointing Job Developers to improve job outcomes for offenders. Six pilots will be run, providing employers with a new, individualised service to break down real and perceived barriers to employing offenders. The pilots will also offer offenders access to training programmes designed to meet the needs of employers. The Job Developers will advise Jobcentre Plus and Reducing Re-offending Corporate Alliance partners and providers on employer engagement.

February 2007

23 Data for March 2006 is provisional. Back

24 Data included can be found in the Home Office Statistical Bulletin "Criminal Statistics 2005" at http://www.homeoffice.gov.uk/rds/crimstats05.html Back

25 Although one of the areas-West Midlands-failed to meet this element of the SR02 target due to a significant decline in the volume of recorded crime over the period, we have since discovered that this is not in fact the reason for the failure of the second area-Gwent. In the case of Gwent, there were a number of performance issues contributing to the decline in the volume of offences brought to justice over the SR02 period, one of which was their inability to sustain an exceptionally high sanction detection rate in the baseline year throughout the period to 2005-06. Back