Examination of Witnesses (Questions 320-339)
DEPARTMENT FOR
ENVIRONMENT, FOOD
& RURAL AFFAIRS
AND RURAL
PAYMENTS AGENCY
MONDAY 9 JULY
2007
Q320 Mr Touhig: In answer to a question
from the Chairman, I think that you said that you had been paid
all of your bonuses and so forth. So in personal terms do you
think that you did a good job—the best you could under the
circumstances?
Johnston McNeill: I was asked
to take on this job when I was Chief Executive of the Meat Hygiene
Service. I was approached by recruitment consultants to take on
the job. I was not particularly keen and could see that it was
high risk. There were a number of issues, including something
that has discussed here before—my, perhaps, lack of experience
in IT development work and so on. I have put in new systems, but
none of this magnitude. Basically, I was approached a number of
times and, eventually, decided to apply, after the closing date
I was given the job. Sir Brian Bender was the chair of the panel.
I took the job on the basis that I would do it for three years.
The point that I was trying to make was that I was then asked
to stay on, which I did.
Q321 Mr Touhig: Until that time had
your record been without suspicion.
Johnston McNeill: Absolutely.
Q322 Mr Touhig: You were just asked
by Mr Bacon about Mrs Ghosh's comment when she said that she suspected
that no one in the Agency fully understood the whole business
process from end to end. Do you agree with that comment?
Johnston McNeill: I think that
we would have a hard time building the system if we did not understand
it.
Q323 Mr Touhig: You told the Chairman,
at the beginning, that there were 21 policy changes.
Johnston McNeill: You might correct
me on the number. It was 20-something.
Q324 Mr Touhig: What's one or two
between friends—21, 22, whatever? The point that I am trying
to get at is this: those changes came from DEFRA to you?
Johnston McNeill: Yes. That is
true.
Q325 Mr Touhig: And that was an instruction
on how it had to be done?
Johnston McNeill: Yes.
Q326 Mr Touhig: You went on to say
that colleagues in your team talked about it being a bit hellish.
There was only a 40% confidence level. I am trying to establish
why on earth you started on this track at all, with all the red
lights, which I know do not mean stop—things are not as
simple as that. However, clearly you had grave concerns right
at the beginning, and yet you were told by DEFRA—your lead
Department—that you had to go down this track, about which
you had all these anxieties.
Johnston McNeill: There are quotes,
in evidence from the NFU, the Country Land and Business Association,
the Tenant Farmers Association, in which senior DEFRA representatives
commented that the RPA would do what the RPA was told to do, and
that this was a major policy initiative and success. We heard
from the Secretary of State. The general line was that this had
to be delivered.
Q327 Mr Touhig: So you were directed
and this had to be done. You decided to attempt it. Did you put
down reservations?
Johnston McNeill: Absolutely.
Q328 Mr Touhig: But you felt that
there was a definite direction from the Department—a political
direction—that this was how it had to be.
Johnston McNeill: And resources
and significant funding were made available to push on and do
this.
Q329 Mr Touhig: You said that you
met the Secretary of State twice. When things started to go wrong
and as you got into the process, did you seek to meet the Secretary
of State and say, "Look, this is going desperately wrong."
You were sending Reports to Ministers and so on.
Johnston McNeill: Contact with
the Secretary of State was largely through Andy Lebrecht, who
joint chaired the CAPRI board with me, and the Permanent Secretary,
who chaired the Executive Review Group. I dealt directly with
Lord Bach. That was the understood remit laid down by the Department.
Q330 Mr Touhig: As far as I can see,
you had grave reservations about the whole system, which is most
complex. It is delivering now, as you say, but it had failed to
deliver, and many people would comment on what has gone on in
the past. I cannot get my head around the fact that with all your
concerns and with your previous record of being a first-class
public servant, you allowed yourself to be persuaded to go down
this track. You were a professional who was interviewed and given
the job, but others who perhaps did not have your understanding
were telling you, "You must do it this way." You were
telling them, "It's going to be difficult." Why on earth
did you not stop there and say, "No, this cannot be done"?
Johnston McNeill: To go back to
my previous observation, at no time until we hit the payment period
at the end of February-March 2006 did anyone say to me, "This
cannot be done." That is the fact of the matter. If you can
find them, I would like to meet them. The fact is that if I had
said that to the Secretary of State, the first question—on
which any Minister would have challenged me—would have been,
"On what basis do you say that?"
Had Accenture been asked independently—do
not forget that the Permanent Secretary was meeting Accenture
on a regular basis—it would have said, "We think that
it is doable." Had other consultants been asked, they would
have said, "We think that it is doable." Where exactly
was I getting the "No"? Yes, it was hellishly difficult,
and yes it was going to be a major challenge—
Q331 Mr Touhig: Your staff were telling
you that it was going to be a bit hellish; you said that your
own people told you that it was going to be a bit hellish.
Johnston McNeill: Yes, but they
did not say that it could not be done.
Q332 Mr Touhig: They did not say
that it could not be done?
Johnston McNeill: Never.
Q333 Mr Touhig: So despite your reservations,
you felt that you had to go ahead?
Johnston McNeill: Yes, and we
clearly identified the associated risks.
Q334 Mr Touhig: Have you ever before
in your career been in such a position, in which you had to make
such a judgment—when you had real doubts about carrying
out a certain course of action, but were directed to do so?
Johnston McNeill: I have had situations,
through periods with BSE, foot and mouth disease and other concerns,
in which one has had to do things when perhaps one thought that
they were not—from a public purse point of view, or whatever—quite
appropriate, but that they had to be done.
Q335 Mr Touhig: You Reported to the
Permanent Secretary and to Ministers. Did you at any time say
in any of your Reports, "This is going desperately wrong.
We have to stop, reappraise where we are and see how we can solve
this differently"?
Johnston McNeill: Those discussions—"These
are the problems, you've seen the red lights. This is how we are
now going to have to move to get round them"—were regular.
Discussions with the Department about needing additional funds
or putting in manual work-arounds were regular.
Q336 Mr Touhig: Yes. I just cannot
understand why, given all the concerns that you have expressed
today—the difficulties, the 21 policy changes, the 40% confidence
level and so forth—you ever allowed yourself to take this
thing forward. It seems to me that, although you may not want
to put it this way, this should not have gone ahead in the way
that it did and that it was against all your best instincts and
judgment.
Johnston McNeill: The Reports
were going to the Executive Review Group, chaired by the Permanent
Secretary. If, having been fully briefed as accounting officer,
the Permanent Secretary was content, I have to say that it was
made increasingly difficult for me to say, "I don't think
so."
Chairman: There are two very brief supplementaries,
because we have had a long hearing. One will come from Mr Mitchell
and the other from Mr Curry. Then we shall draw the hearing to
a close, if you do not mind, Mr McNeill.
Q337 Mr Mitchell: I have a question
and an apology. The Chairman sent me a note saying that I was
shouting at you, Mr McNeill, during my interrogation; I did not
read it until I had finished. I apologise; it is just a Yorkshireman's
way of expressing concern. I say that to my wife, too.
I noticed in the Single Payment Scheme briefing
of 24 March, after you had gone, that an agreement had been reached
with the Secretary of State on 21 March to simplify the process—only
two checks being undertaken on a sample of three claims out of
each batch of 50 claims, and a 2-hectare tolerance—2 hectares
is more than the entire Mitchell hereditary estates—on claims.
In other words, they were solving the problem by chucking money
at it. Some claims that were not justified, which had they been
administered under you would not have passed, were now being passed.
The farmers who had complicated the system and had therefore delayed
everything were being rewarded for their intransigence by a much
softer regime. Is that correct?
Johnston McNeill: You mentioned
the batch authorisations first. The decision taken after my departure,
although—I had mentioned this to Margaret Beckett when we
met—we had already pretty much cleared it up with DEFRA
legal, was to reduce the batch authorisation process. That occurred
at the very end of the system, literally before the cheque goes
out, whereby a batch of 100 claims was taken and a six-point check
was done. We had agreed at that stage that that was going to be
changed. That was holding up some claims, but they tended to be
a number of low-value claims; it was not going to make a great
difference to us.
That deals with that first point, but you mentioned
something else. I think that in respect of de minimis, less focus
was to be made on small claims and more focus was to be made on
larger claims, which would have tended to involve established
customers. We had had discussions about that, but there had been
resistance from ministers to going down that road before.
Q338 Mr Mitchell: They were getting
out trouble by giving the farmers an easier ride.
Johnston McNeill: Yes, but the
biggest step towards getting out of trouble was to move to make
interim payments, but that also incurred a substantial disallowance.
Q339 Mr Curry: The Secretary of State
might have said, "This is a damn good CAP reform. The dynamic
hybrid is clearly the right way to go in England, whose agriculture
is different from that of the other parts of the United Kingdom,
but I do not want the gloss to be taken off this achievement.
Therefore, we will have a year's delay before we implement, as
is entirely possible under the European Union rules. I want to
ensure that this will go in without any problem." What difference
would such a decision have made?
Johnston McNeill: The final problem
that we encountered in terms of running out of time was that,
when we hit the problem in February and March, we had no time
left to meet the target. I still believe that we could have met
the legal window of the end of June, but we could not meet the
ministerial target of dealing with the bulk of payments by the
end of March. If we had had more time, perhaps that would have
made things more straightforward.
Chairman: Thank you, Mr McNeill.
That concludes our hearing. This relates to a scheme year in 2005,
and our original hearing was based on an NAO Report published
on 18 October 2006. It is pity that we could not have talked to
you earlier. I can speak only for myself, but I think that you
have been a good witness and you have defended your corner very
well. This justifies the Committee's decision to persevere with
you and to have you here. It is often more useful to talk to the
person running these things on the ground rather than a Permanent
Secretary. As in this case, we are often talking about a Permanent
Secretary appointed after the event. You have put your side of
the story, and it is good that we have done this in public. Thank
you very much.
Johnston McNeill: Thank you.
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