Examination of Witnesses (Questins 80-99)
CABINET OFFICE,
DEPARTMENT OF
HEALTH & HM PRISON
SERVICE
12 DECEMBER 2007
Q80 Mr Bacon: What has been going
on for the last 30 years? To give an example of the Immigration
and Nationality Directorate, which I happen to know about because
there was a notorious affair involving the Immigration and Nationality
Directorate and a report from the NAO on failed asylum seekers,
and there was a chart in there that said that the Immigration
and Nationality Directorate had 14,500 staff and that 540 of them
worked in the HR department—fairly simple, pin-downable
information. Why can all departments and agencies not come up
with similar figures?
Ms Cleveland: I think people can
say the number of people they have got working in their HR departments.
What you miss from that is the total number of people that are
working in HR-type functions. They may not be badged as HR people,
they may be badged as business support people, sitting out in
operational areas across businesses where they are undertaking
HR-related work. If we just took the number of people who were
in HR functions across the piece I think you seriously underestimate
the amount of work that is actually put in.
Q81 Mr Bacon: It is a pre-condition
of improving what you have got that you know what you have got.
Ms Cleveland: I agree.
Q82 Mr Bacon: It sounds to me that
you do not really know what you have got.
Ms Cleveland: What we are getting
already from the evidence of the work where we have shown a spotlight
on this, which is where we are in producing the shared service
arena, is showing what the baseline was and therefore the savings
that we are making. We have already covered some examples of that
during the hearing today.
Q83 Mr Bacon: On page 32 there is
a note at the bottom, note 20, which says that the cost of your
team was £2.2 million in 2005-06 and £1.8 million in
2006-07, a total of £4 million over the two years, and in
paragraph 4.3 it says: "The complement is now four full-time
equivalents." £4 million for four full-time equivalents
for two years sounds quite a lot.
Ms Cleveland: It does and I would
not mind being one of those four full-time equivalents if that
was the cost. That covered a lot of the survey work that we talked
about.
Q84 Mr Bacon: That you cannot find?
Ms Cleveland: Indeed.
Q85 Mr Bacon: So you spent £2
million on it but you lost it?
Ms Cleveland: We had a product
from it which was not just the £7 billion; it was just the
workings of that £7 billion figure that we could not find.
Q86 Mr Bacon: Was this £2 million
spent on consultants or was it spent on in-house staff who joined
the team temporarily and then left?
Ms Cleveland: It would be a mixture
of the two.
Q87 Mr Bacon: How many people were
in the team?
Ms Cleveland: I think I will be
able to send you a note on that. I do not have that figure immediately
to hand. [2]
Q88 Mr Bacon: How long have you been
running this team?
Ms Cleveland: Three months.
Q89 Mr Bacon: Who was running it
before you?
Ms Cleveland: Someone called Ian
Watmore.
Q90 Mr Bacon: Who has gone off to
be Permanent Secretary of the Department for Innovation, Universities
and Skills?
Ms Cleveland: Yes.
Q91 Mr Bacon: Have you phoned him
up to ask him where the workings are and all this stuff that you
spent £2 million on and do not know where it is?
Ms Cleveland: I have not personally
but my team have been trying to track it down.
Q92 Mr Bacon: I am sure they will
have it in front of us at some point but it seems to me extraordinary
that you do not know how many people have been involved in this
for the £4 million that the taxpayers have spent on it. The
other thing I find odd is that it says in paragraph 1.5 shared
services are not new and it makes the point about BACS, the Bank
Automated Clearing Service being: "a joint venture owned
by 15 banks that has been processing financial transactions since
1968." It goes on to say: "Federal bodies in the USA
have provided payroll and financial services to other federal
bodies since the early 1980s." Why is it that it has taken
so long to even begin to get this off the ground when it has been
around for 40 years?
Ms Cleveland: I do not think we
have been standing completely still over this period. Through
the various initiatives that you have talked about, people have
been doing things either within their payroll areas or within
some of their HR functions. The concept of this new shared service
is something that we have been picking up really only over the
last two or three years. It is absolutely clear that this is not
something that you can improve overnight, and if you look at some
of the other private sector comparators it took BT ten years to
roll out their shared service provision. Again, we were going
slightly counter to this in the move to Next Steps agencies and
such like where we were splitting things up and the HR and finance
functions went from corporate things within departments out into
agencies and NDPBs. I think that drove some efficiencies and some
improvements in overall service through focusing on individual
businesses, but I think there is now a general move across the
Civil Service to actually try and develop something once and deploy
it many times and begin to look at having more standardisation
again of our business processes.
Q93 Mr Bacon: When the Treasury,
the OGC and the Debt Management Service developed their own shared
service centre, did they use the repository of shared services
methodologies and tools for the departments that your team created?
This is bullet point five of that list in paragraph 4.3.
Ms Cleveland: We have certainly
made these available to all departments.
Q94 Mr Bacon: No, that is not what
I asked. In fact, that was going to be my next question. It says
here: "building a repository of shared services methodologies
and tools for departments to use". How many departments have
actually used them?
Ms Cleveland: We have shared them
with HMRC and DWP. The department that is using them first as
a new department going through to that is actually the Cabinet
Office itself.
Q95 Mr Bacon: I would expect that
since it created it. Hang on, when you say shared with, I could
share my immortal prose with millions of people by emailing them;
it does not mean they have actually used it or read it. How many
departments have actually used the things that you have invented
here in bullet point five?
Ms Cleveland: Some of the things
we have pulled together have come through or we have taken them
from examples in other departments, so some of the tools in there
have been used. I am not claiming that we invented them in the
Cabinet Office. We have actually learned from other departments
in pulling those together into best practice for the wider Civil
Service.
The Committee suspended from 4.16 pm to 4.28
pm for a division in the House.
Chairman: We are back. Mr Bacon?
Q96 Mr Bacon: Yes, thank you very
much. It is a question for the National Audit Office. Sir John,
I am very interested in this £4 million not because in terms
of the amounts of money that we look at it is a huge sum—although
frankly I would like to have it and I do not—but because
it is not clear where it has gone. It has gone on staff to some
extent, it has gone on producing this £7 billion of cost,
although we are not clear where the workings come from, and it
is presumably to some extent related (but it is not clear how)
to this list of six or seven bullet points in paragraph 4.3. Could
you possibly in time for our Report do a forensic audit of this
£4 million and see where exactly it has gone because presumably
it would help also answer the question of how the Department or
the Cabinet Office got to the £7 billion cost figure in the
first place?
Sir John Bourn: We will do that
and of course share it with the Cabinet Office.[3]
Mr Bacon: Thank you.
Q97 Chairman: Of course, Mr Wheatley,
this question is borne out by paragraph 2.9, is it not, which
you can find on page 19, where you do not actually know whether
the staff savings are real because it says in this Report, to
which you have agreed: "However, tracking every individual
affected by the programme is incomplete, so it is difficult for
the Prison Service to substantiate staff savings fully."
The truth is you do not know what has happened to staff whose
posts have been removed, do you?
Mr Wheatley: I have replied to
that already. That question has been raised already. I know that
I have taken the money out of establishments and establishments
are still performing and managing to maintain their operational
performance to target, so that implies to me fairly strongly that
we have managed to remove the staff and continue to deliver—
Q98 Chairman: It implies to you.
I just do not understand why—and I am sorry to go back on
this—it is so difficult to know what has happened to the
individual members of staff.
Mr Wheatley: I would have to have
had a list of all the staff I had working in the 128 establishments
I have got of what precisely they were doing on a base date, and
I would have to track their careers to see where they had moved
to and why they had moved to make sure that they had actually
left the job they were in at the right point for the right reason.
I could have done that but it would have been an elaborate piece
of work which would have involved expense.
Q99 Chairman: Perhaps I can go back
to the National Audit Office to Mr Davis who has been working
on this. Does this mean that you or they have never substantiated
these savings?
Mr Davis: Certainly it means that
it is more difficult to substantiate them if we cannot follow
through individual staff members.
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