Examination of Witnesses (Questions 100-119)
DEFRA AND RURAL
PAYMENTS AGENCY
23 JANUARY 2008
Q100 Mr Bacon: Since the gap between
£79 million and £120 million is £41 million, and
you are only spending part of this £40 million, where is
the rest of it coming from, another pot?
Mr Cooper: No. One of the things
that I did in the RPA was I brought together projects into a Projects
Directorate and I also brought together the expenditure that was
incurred in the organisation on various projects. There is an
assumed level of expenditure in various areas but I have been
able to pool that money. The £40 million is an additional
investment over and above what we had already planned. I think
at the time it was assumed to be £15 million, from memory.
Q101 Mr Bacon: You are called the
Rural Payments Agency, that was the name of the Agency from its
inception, was it not?
Mr Cooper: It was, yes.
Q102 Mr Bacon: Presumably the main
task of the Rural Payments Agency is to make payments and yet,
as we just heard in answer to Geraldine Smith earlier, at the
moment you are not able to tell farmers when they will get paid
and you are also not able, because of the way in which the system
was set up, "rigid" was the word Mrs Ghosh used, to
tell any farmer who phones up how much they have been paid. Making
payments is your core business, it is in the title of your Agency,
and you cannot tell people when they are going to get paid and
you cannot tell people how much you have paid them. You employed
a consultant to help you design this system, a rigid system, that
cannot do these things. Why then would you extend the contract?
Mr Cooper: The payment information
goes out separately from the caseworker, so the caseworker takes
a call and—
Q103 Mr Bacon: It sounds like the
tearoom here where if you order scrambled eggs on toast, the scrambled
egg comes from one place and the toast comes from another, they
never arrive together.
Mrs Ghosh: They will come together.
Q104 Mr Bacon: They will downstairs
if you ask in advance for them to come together, but they are
not always both hot.
Mrs Ghosh: Part of the payments
programme is that they should come together. Just to pick up that
point, what we are now doing through a different kind of contract
with Accenture from that which pertained to the build of the RITA
system is genuinely to have the kind of partnership you describe.
In other words, they work with us on the business process, they
share the risk if they fail. Historically, on the RITA system
the problem was there was not a real partnership, they were told
what to do, they were not invited to comment, and they delivered—
Q105 Mr Bacon: How did you buy a
consultancy from somebody on that basis?
Mrs Ghosh: We were not buying
consultancy from them, we were buying an IT system from them.
Q106 Mr Bacon: They are one of the
world's major IT consulting firms. Whether you are buying IT systems
or consultancy --- By the way, there are shelf loads of advice
stretching back many years from the Audit Commission, the Cabinet
Office's own scrutiny unit when they had the Efficiency Unit years
ago, and Sir John has published many reports on buying IT.
Mrs Ghosh: Yes.
Q107 Mr Bacon: How could you so late
on as this recently buy an IT system? You went along and said,
"Hello, we are from the Payments Agency, we want to make
payments". How did you buy an IT system that could not tell
you about your payments?
Mrs Ghosh: Tony will tell you
how we are taking forward.
Q108 Mr Bacon: That was not the question.
Mrs Ghosh: I am trying to avoid—
Q109 Mr Bacon: With respect, I sit
here week after week and I listen to civil servants giving me
answers to questions I did not ask. My question, had it been,
"Will you ask Tony, Mr Cooper, to tell us how we are going
to take this forward", then I would have expected your answer
to be, "I will tell Tony to tell you how we are going to
take this forward", but that was not the question. How can
you create a payments system and buy a payments system from an
IT contractor that does not tell you about your payments, that
was my question?
Mrs Ghosh: The answer, I think,
is contained in the NAO's and this Committee's previous Reports
because the procurement of the IT system and the design of the
business process was inadequate. That ground has been gone over
both by this Committee and by the EFRA Select Committee. Looking
forward we will bring the two things together.
Mr Cooper: During spring we expect
the payment information to be available.
Q110 Mr Bacon: Mrs Browning asked
about the £750 and I was going to ask if you had a target
for reducing it and you have made it clear that you do not, and
I agree with Mrs Browning it might be a useful figure. I would
like to go back to what Mrs Ghosh said about ministers not realising
this was a challenge. You said, Mrs Ghosh, "Ministers were
being told it was possible when, in fact, it was impossible".
What you are basically saying is that ministers were being given
duff advice.
Mrs Ghosh: Because of the capacity
of the Agency to understand.
Q111 Mr Bacon: You are completing
my sentence but could you just confirm that my sentence is correct,
ministers were being given duff advice?
Mrs Ghosh: Yes, as I have said
at the previous hearing.
Q112 Mr Bacon: Do you know how much
pleasure I get out of hearing a civil servant say "Yes"
when answering a question like that. Thank you very much.
Mrs Ghosh: I do know.
Q113 Mr Bacon: Great pleasure. Overpayments:
I would like to ask about these payments the Chairman referred
to on page 11. You said, Mrs Ghosh, "We can write off smaller
payments".
Mrs Ghosh: Yes.
Q114 Mr Bacon: It says there on that
particular payment plan there were 672 overpayments, none of which
has yet been recovered. If you add up the 253 and the 205 payments,
which between them were either less than £100 or less than
£500, you get 458 payments, some 68%, in other words over
two-thirds of the total. That is a relatively small amount. Have
you considered writing any of that off or are you doing it on
a case-by-case basis? When will that chart be zero because you
have either recovered it back or written it off?
Mrs Ghosh: As I said, before we
look at the whole overpayment and, indeed, underpayment analysis
that Tony and the team are doing we need to agree with ministers
exactly what our policy is. I have given some indication of the
kind of criteria we use. In terms of the particular group of people
in this table, Tony, what action have we taken?
Mr Cooper: In November we started
to make some recoveries. The larger ones we have actually telephoned.
Q115 Mr Bacon: This was one payment
run, so it would have all happened overnight?
Mr Cooper: It did.
Q116 Mr Bacon: When did that happen?
Mr Cooper: That was August 2006.
Q117 Mr Bacon: When did you know
that there had been an overpayment? More or less immediately presumably?
Mr Cooper: Yes.
Q118 Mr Bacon: Why was that, because
double the amount of money had gone out of your bank account than
you had expected?
Mr Cooper: Yes.
Q119 Mr Bacon: When did they know
from you that you had overpaid them?
Mr Cooper: The highest ones we
telephoned straight away and alerted them.
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