Examination of Witnesses (Questions 152-159)
MR CHRIS
BANKS, MR
GEOFF RUSSELL
AND MR
DAVID HUGHES
20 MAY 2009
Q152 Chairman: Can we extend an immediate
welcome to our second panel this morning in this topic of inquiry
into FE college capital expenditure and, again, explain that we
are very tight on time with three-quarters of an hour allocated.
Can we welcome Chris Banks, the Chairman of the Learning and Skills
Council, Geoff Russell, the Chief Executive of the Learning and
Skills Council, and David Hughes, the National Projects Director
of the Learning and Skills Council. Welcome to you all and thank
you very much, at relatively short notice, for coming to join
us this morning. Can I start with you, Chris? Is it all right
to call you Chris?
Mr Banks: Yes.
Q153 Chairman: You have run a large
company, in fact you have run a number of large companies, and
you chair a network for chairs of public bodies to improve efficiency
and effectiveness. How could you have presided over such a debacle?
Mr Banks: Thank you Chairman,
and thank you for this opportunity. It is worth just reflecting
on how the LSC operates. There is the National Council, which
is a corporate body of almost entirely non-executive members plus
a chief executive, and we took the decision early on that we would
delegate all the day-to-day operations of the organisation to
the executive team, if you like, the experts, and also the people
who are working day in day out on the detail of these, and I think
it is worth having that model in mind because it is a different
model from business or some other agencies or organisations that
people have seen.
Q154 Chairman: With the greatest
of respect, which means I am querying what you say—
Mr Banks: I understand.
Q155 Chairman: —if you were
the Chairman of a private sector company, irrespective of what
your chief executive wanted, would you not want a reporting structure
which gave you clarity in terms of the objectives of the organisation
and particularly the way they are delivering a multi-billion pound
programme?
Mr Banks: Absolutely; I would
do.
Q156 Chairman: So did you?
Mr Banks: We did, I did and the
council did, and we had an arrangement in place which provided
regular reports and updates to the council on what was going on.
Clearly what you have seen, and you have heard it from evidence
and from Andrew Foster's report as well, the system did not work,
it broke, and the mismanagement, if you like, of the capital programme
did not come to the attention of the National Council at the right
time and in the right way for us to act on it. What did happen,
though (and I think this is again worth bearing in mind) is that,
in response to questions that the council asked at its November
meeting and subsequently at the December meeting, the extent of
the problem became clear, and as soon as we knew about it, we
did take what was the only appropriate action at the time.
Q157 Chairman: You are talking about
November. It was actually in February when people within the organisation
were saying, "This is going badly wrong", and a report
was coming forward, and yet your structures did not pick that
up until very, very late on in the year. Something was not right,
was it?
Mr Banks: Clearly that is right;
the system failed. I suppose I am trying to make it clear that,
as soon as the council was aware of what the issues were, it acted,
I think, appropriately and decisively, but you are right, there
was quite a long period there where the issue was becoming clearer
and clearer to people and we were unsighted on it.
Q158 Chairman: It is like saying
we have a crash and we then decide to put seatbelts on, is it
not?
Mr Banks: I think to say we slammed
on the brakes at the last minute, would be a closer analogy.
Q159 Chairman: So you have not looked
through the window yet!
Mr Banks: We were not aware.
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