Examination of Witnesses (Questions 160-179)
MR DAVE
HARTNETT CB AND
MR NICK
LODGE
17 DECEMBER 2007
Q160 Angela Browning: Do they?
Mr Hartnett: I believe so. We
are looking at this because we have got to make sure this is right
and one of the key issues for our Department going forward is
are we investing enough in the development of people. Our Pacesetter
programme, which is driving improvement in skills for our junior
and middle managers, is evidence of that investment and it is
through that programme that the sort of efficiency gains I referred
to earlier on are being delivered.
Q161 Angela Browning: There is nothing
about the culture at HMRC that says, "Welcome to your new
job, you will soon get the hang of it"?
Mr Hartnett: No, I do not think
there is. I have seen no evidence of that. That seems to me to
be a very slipshod approach and it is not an approach I recognise.
Angela Browning: Thank you.
Chairman: That is what they said to me
when I became an MP!
Keith Hill: And did you?
Chairman: I am still learning after 25
years.
Q162 Phil Wilson: The email of 13
March at 23 minutes past three, it says in there the original
request was for 100% data scan.
Mr Hartnett: Yes.
Q163 Phil Wilson: Then it says you
wanted additional data scans/filters, et cetera. Was that
because of the NAO's change in the way they were going to audit
Child Benefit, do you know?
Mr Hartnett: I just do not know.
I could surmise that is right but, as I said earlier on and I
am sorry to repeat it, these are three emails which tell part
of the story. I want to see other emails around that, I want to
see what discussions were taking place. I am told that on the
Wednesday of that week there was a meeting between NAO, some of
our claimant compliance people and some of our data analysts,
probably our statisticians, but I do not know what happened at
that meeting at the minute. I am told that these issues were not
discussed. Mr Poynter needs to test that.
Q164 Phil Wilson: In this letter
of 9 November, "Our Audit of Child Benefit" from the
NAO, the last paragraph on the first page says: "We signalled
the change in our audit approach ... though without being explicit
about the additional substantive testing that we proposed, nor
addressing how we might extract this data." If that was made
explicit to the person who wrote this email at 23 minutes past
three he might have thought again about doing these filters, et
cetera, might he not, but if he was not aware he was going to
think, "I'm going to leave things the way they are"?
Mr Hartnett: I understand the
direction of that, Mr Wilson. I think the best I can say and the
fairest thing I can say is if the person who wrote the email was
better informed than they were at 15:23 they might have written
a different email, but I cannot say any more than that.
Q165 Phil Wilson: Speculation.
Mr Hartnett: It is surmise.
Q166 Phil Wilson: It is a particular
consideration since we have now got this letter of 9 November.
If on 13 March this person said, "Okay, we will do these
new filters and additional data scans, et cetera",
how long would it take to do that?
Mr Hartnett: I do not know the
answer to that.[2]
Q167 Phil Wilson: Would it be a week,
a day?
Mr Hartnett: I do not think it
would have been anything like that long but can we find out the
answer and write to the clerk.
Q168 Phil Wilson: Okay.
Mr Hartnett: I really do not want
to speculate.
Q169 Phil Wilson: This exchange of
emails took place on the 13th and the disks were exchanged three
days later.
Mr Hartnett: Yes.
Q170 Phil Wilson: From what you were
saying to Mr Hill there seemed to be no protocol at all, he just
handed the disks over. Is that right?
Mr Hartnett: One of the most important
questions yet to be answered is what was happening at the time
that the disks were handed over, what led up to that, are there
more emails, are there personal recollections of conversations.
I have had no access to any of that at the minute and I am desperate
to understand that.
Q171 Phil Wilson: The other point
to Sir John is a question about this letter of 9 November. Is
what is in here basically about the change in the way that you
audit the Child Benefit awards, et cetera, but you did
not explain to HMRC that was what you wanted so, therefore, you
ended up with a civil servant saying, "I am going to give
you a 100% scan anyway"? Was the reason why the person was
asking at 14:41 in an email for all these changes to the data
because of the new auditing requirements?
Sir John Bourn: What we asked
for was the full range of data from which we could take the sample
that we needed. We had asked for it before and it had been supplied,
we were asking for it again.
Q172 Phil Wilson: Was it because
of the new auditing procedures as laid out in this letter of 9
November?
Sir John Bourn: The new auditing
procedures had been made available to HMRC before.
Q173 Phil Wilson: It does not say
that, it says it was "signalled" and goes on to say,
"though without being explicit about the additional substantive
testing that we proposed ... "
Sir John Bourn: The audit strategy
had been supplied to HMRC. The apology was made because the official
in the NAO had not explained that strategy to the HMRC people.
So the strategy was clear and, as I say, under the strategy the
requests were made, they had been accepted before and it was a
similar request made again. We had not spent as much time as we
could helpfully have done in explaining personally face-to-face
the new strategy.
Q174 Phil Wilson: So you can accept
in that case there could have been a bit of confusion where this
civil servant, whoever it was, could just have said, "I am
going to give you the 100% scan because I didn't know about this."
It had been signalled to the Department or HMRC but it had not
been told in explicit terms what was required. It says that in
the letter from your own Department.
Sir John Bourn: In formulating
the explicit request we had explained that we did not need all
the data, we did not need the details of bank material, for example,
so irrespective of the failure to explain the strategy we had
made clear exactly what it was that we wanted and it was in response
to that that HMRC said, "For our reasons we are going to
supply you with more data than you asked for" and that was
their response to it. We were concerned to get the data we wanted
and, as I say, they had supplied it before and said they would
supply it to us again. It was the failure of it to reach us that
caused all of this trouble.
Q175 Phil Wilson: Another question
to Sir John before I wind up. In this: "Briefing for Chancellor
of the Exchequer on the NAO's request for discs of information",
in paragraph four, about the tax post wallet, it says: "This
wallet does not require a signature from the recipient when it
is delivered." How do you know whether you received it or
not?
Sir John Bourn: If we had received
it we would know we had received it.
Q176 Phil Wilson: How, because you
have not got a signature, it has just been received? I do not
know what happens but you receive it. It is lost somewhere, it
could be anywhere. You have not got a signature for it, so how
do you know whether you received it or not?
Sir John Bourn: We know that we
did not receive it because if we had received it we would have
been able to work on it.
Q177 Phil Wilson: My point is you
do not know whether you received it or not because you do not
get a signature for it, so how do you know it is there? It is
lost. That is the definition of being lost, you do not know where
it is at.
Sir John Bourn: We know we did
not receive it because if we had received it we would have worked
on it.
Q178 Phil Wilson: How do you know
you did not receive it?
Sir John Bourn: If we had received
it we would have worked on it.
Q179 Phil Wilson: But it is lost.
Sir John Bourn: Yes, we did not
receive it.
Chairman: I think he is asking are you
sure it is not in your office?
2 Note by witness: These issues are currently
being looked at by Kieran Poynter and we await his findings. Back
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