Examination of Witnesses (Questions 120-139)
DEPARTMENT FOR
CHILDREN, SCHOOLS
AND FAMILIES,
OFFICE OF
GOVERNMENT COMMERCE
& HM TREASURY
14 JANUARY 2008
Q120 Mr Bacon: I would like to ask
a question about Mr Burt. You have obviously had a lot of experience
in procurement. You are the immediate past chairman of the Chartered
Institute of Purchasing and Supply. One of the things Mr Smith
said, about looking across the departments when you talk to Mike,
was that the professional expertise is not always there. One of
my questions to you Mr Smith is why do you not have a property
man, a property professional or indeed a property woman, somebody
with property expertise as your Government Estate Transformation
Director? Why do you have a procurement person and not a property
person? We have experience of this because we looked at the NHS
estate and it was not a chartered surveyor running that. Mr Burt,
perhaps you could answer directly. Why are you in your job when
you are not a property man?
Mr Burt: I have property experts
as part of my team. A lot of what we are doing on property is
actually either introducing or implementing a big change programme
and I include culture change in that and a big procurement programme.
At the end of the day a lot of what we are doing on property is
actually procuring an asset as well as procuring the services
to deliver the asset. There is a big procurement activity wrapped
up in the property activity. Indeed one of the areas of savings
that we are looking for is the way that we procure FM services
for our buildings. At the moment, it is very silo oriented in
the sense that there are several individual FM contracts around
the country. There is scope to do more on collaborative procurement.
Q121 Mr Bacon: Do you mean that a
contractor might be responsible for providing FM to a number of
different buildings?
Mr Burt: Yes, or even to one building.
Q122 Mr Bacon: I was very struck
by paragraph 2.2: "We found that often departments did not
know key management data on their buildings ... In 60 cases departments
did not know how many people were based in the building".
I remember once spending part of a weekend working in an investment
bank building in the City—in fact we were busy doing things
for the Conservative Party. I remember my friend who was there
with me saying as we walked through the door: "This place
costs £33,000 to open every day". He was not an FM man,
he was a marketeer but he knew about the building. Who is it who
is responsible such that you can have a situation where there
are some people in the departments, luckily a minority, but there
are some people who just do not know? Who is the person who is
supposed to be responsible in each case? Is there in every case
an estate director for every single department or every agency
or every quango?
Mr Burt: Yes, there is.
Q123 Mr Bacon: He or she should be
the person who knows the answers to those questions?
Mr Burt: Absolutely.
Q124 Mr Bacon: You are presumably
drawing to the attention of those who do not know that they have
an estate director who cannot answer these questions?
Mr Burt: Yes, that is part of
the role that we have.
Q125 Mr Bacon: With some vigour?
Mr Burt: With some vigour. The
slight gloss that I would put on that is that of course not every
department has the same issues around property as others. Clearly
property is a very significant issue for the likes of the DWP
and HMRC which have very big estates, whereas for a department
that has only one building it would be less so. There is an issue
around the profile that is given to the estates activity which
again we are looking to address.
Q126 Mr Bacon: I want to come back
to Mr Smith and ask you one more question. Another peculiar department
is the FCO, which has already been mentioned, partly because of
the historic buildings that it has sometimes around the world,
the Washington Embassy, the Moscow Embassy, Paris and so on which
for very good reasons we might not want to give up. What work
do you do with the Foreign Office specifically on their worldwide
estate?
Mr Smith: We do not cover the
FCO overseas estate.
Q127 Mr Bacon: Who does?
Mr Smith: The FCO does.
Q128 Mr Bacon: Perhaps we should
have them along to talk about it.
Mr Smith: What we would hope would
be being applied are the principles of what we are introducing
through high performing property to the way that they are running
their overseas estate. We do not have a direct remit for that
overseas estate.
Q129 Mr Bacon: All I can say is that
every time I have been to an embassy overseas with this Committee,
the ambassador always gives you a gin and tonic within 90 seconds
of you walking through the door. If they keep that up I suppose
they will probably keep their property. May I ask a question about
the OGC itself? John Oughton, your predecessor, used to have to
report to the Prime Minister on 91 different mission critical
projects across Government. Have you inherited that commitment
and do you still do it? It was mostly big IT projects but not
necessarily all IT projects.
Mr Smith: Certainly when I came
in there was not any reporting on a regular basis on mission critical
or any other projects.
Q130 Mr Bacon: Was there not? John
Oughton has told this Committee about the fact that this was one
of the things he had to do to the Prime Minister.
Mr Smith: May be it had fallen
into some disrepair, but I certainly did not see any reports,
although I have to say that the CIO Council on IT-enabled projects
were reporting their projects; so the ICT leads in government
were reporting their major projects up through the delivery council
and through them into the Cabinet Office. That is now being repaired.
There will be a process to review major projects, not necessarily
mission critical. In my view, the definition of mission critical
is not really the most important projects very often, but certainly
on the major projects, the most important projects, there is a
process being put in place at this very moment such that we will
have one government view of the health of those projects.
Q131 Mr Bacon: Going back to the
government estate, perhaps you can send us a note describing in
terms of these key metrics where you think you will be in 12,
24, and 36 months' time. Can you do that?[3]
Mr Smith: Which metrics?
Q132 Mr Bacon: The key metrics that
are referred to in this Report; the key management data which
departments often do not know about.
Mr Smith: Well I will have a crack
at that, but it is unlikely that I will give a very accurate view
of 12 months.
Q133 Mr Bacon: What I am really asking
is what the ambition is and where you think you will be and what
you think you will be saying to us in some detail, with numbers,
in say three years' time?
Mr Smith: I will come back to
you.
Mr Burt: With the mandating of
the benchmarking service from 1 April certainly by 12 months beyond
that, that is end of March 2009, we will be in a position where
we will have all departments, all government organisations involved
in benchmarking. We should have visibility on nearly 2,000 holdings
across Government and we will be in a much better position to
be able to see exactly what is happening across the whole of the
estate.
Mr Smith: I will just put one
caveat on that. My caveat would be that where Government could
get to when you look at £1 billion to £1.5 billion,
indeed that is very much the same as the NAO's numbers when it
is mapped out to include all the executive agencies and other
departments, the opportunity is okay. The issue for me is actually
the deliverability. In property, in my experience, particularly
in terms of what I have seen in Government, very often you are
into very long leases and the issue is when you can actually get
out. Then, have you got the capital plans in place, if there is
an element of capital required, to translate that into a result?
When you say in three years, from my experience in private enterprise
three years is fairly short. Can you actually have those breaks
in property—and there are lots coming up—are there
enough to give you the opportunity to achieve these new metrics?
There is a question mark.
Q134 Mr Bacon: Fair enough. Can you
send us a schedule of what is coming up and when?
Mr Smith: In terms of lease breaks?
Absolutely; yes.[4]
Q135 Mr Bacon: I just want to ask a couple
of questions for notes. In the note that Ms Tulett is going to
send us on the Treasury building, is it possible for the OGC and
the NAO between you to do the same for the new Home Office building
and the MoD building which we looked at. In other words, since
their inception, since occupancy started, what was the annual
unitary charge of the date of occupancy and what has been the
trend and for the life of the rest of the contract and what is
now the predicted trend? That would be extremely helpful.
Mr Smith: So that is Home Office,
MoD and HMT in terms of the unitary charge development?
Q136 Mr Bacon: Correct. Yes, because
it has gone up to £16 million from £14 million and I
think we will get that anyway from Mr Davis's note; also the accommodation
cost per person, the total number of people and the actual cost.
Thank you very much.
Mr Smith: Yes.
Mr Davis: Yes.
Q137 Mr Williams: Four of us on this
Committee will approach the drafting of our Report with some circumspection
and much dependent on the answer to my first question in that
I, as chair of the Public Accounts Commission, and three of my
colleagues here have authorised a significant refurbishment. Can
you tell me, Sir John, if the NAO refurbishment we have approved
were included in table 25 on page 42, would it be at the goody
end or would it be at the baddy end of the table?
Sir John Bourn: It will be at
the goody end and we are still working on how good it will be.
Q138 Mr Williams: We approached it
with considerable perception of future needs. We can pat ourselves
on the back.
Sir John Bourn: Of course we are
applying and following through in relation to our own requirements
the approach that is envisaged in this Report.
Q139 Mr Williams: We can produce
a bad Report for the rest of you in that case. Let us come back
to this problem of PFI. How significant is it in the global sphere?
I have forgotten the figures; I did not jot them down in time.
I know we are talking of 896 buildings in the report. How many
PFI projects are there which actually circumscribe in some way
your ability to implement the improvements you want to produce
across the board?
Mr Burt: In terms of buildings
that have been refurbished under PFI, only a handful. The main
ones in London are the Home Office, Treasury building, MoD. The
issue that we have is in where a department has outsourced the
whole of its estate through PFI, and that is in the context of
DWP and HMRC, where it is often quite difficult to get the base
data on how a building is performing because that is held by the
outsourced provider. It is not impossible and indeed the discussions
we are having, through DWP and HMRC, with Land Securities Trillium
and Mapeley are actually getting us that data, but there is an
issue there.
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