Examination of Witnesses (Questions 60
- 66)
WEDNESDAY 9 JULY 2008
CHRIS MOXEY,
CLIVE HEAPHY,
STEVEN RYMELL
AND KEITH
LUCK
Q60 Andrew Mackinlay: Mr Luck,
you are from that side, are you not? You are a visitor, in that
you are Foreign and Commonwealth Office. You are not with these
other three, which begs the question, "What are you doing
here?" I do not mean that unkindly.
Chairman: Mr Mackinlay, I think that
Mr Luck can answer your question.
Keith Luck: Very much as you heard
from Mr Moxey, when he introduced me, I am the sponsor. In fact,
Chris and I retain a very close working relationship even after
the trading fund was brought about. I act as principal stakeholder
and principal shareholder on behalf of the FCO. I am the contact
point that binds the organisation back into the Foreign and Commonwealth
Office.
Your question is interesting. Mr Moxey
mentioned the idea of shared services. We had explored that a
little, but as the Chief Executive has indicated, their business
is very much in that area of security. We need to focus on that.
That is where they need to build their business, perhaps rather
than being distracted by other aspects at this point in time.
Q61 Chairman: We are getting warnings
that the Minister is on her feet in the Chamber and there might
be a vote soon. I would like to ask one or two final questions
so that we do not have to come back after perhaps two votes. Your
report refers to the focus on increasing "billable work"
and reducing "low value-add activities". You say that
that is "starting to have an impact". You give a staff
utilisation rate of 65%, which I understand from what is written
is those things that you can actually put a price on: what people
working for you do and what you bill some organisations for. Are
you doing functions that need to be done, but cannot easily be
billable in that sense?
Chris Moxey: No, I do not think
we are, but may I come back to this question of a balanced scorecard
approach to key performance indicators, and the question that
you asked earlier about whether or not we have the right targeting
in place that reflects what we are aspiring to do? Part of that
balanced scorecard has at the heart of it the efficiency and productivity
of our people. Why are we asking that question? On the one hand,
we want to be sure that the people who are working for us are
performing for the majority of their time, and within reason,
revenue-producing activity. Getting that statistic correct and
understanding it as intimately as we need to in the various parts
of our business will make a key contribution to the decisions
that we take over forward pricing arrangements—the offers
that we make to clients, and an understanding of how much people
cost and therefore how much they need to be sold for to give an
appropriate return. Equally, however, the other side of the coin
is that it properly informs our forward resource planning, so
our recruitment plan, as we understand how utilised our people
are, helps us to have right sight over the sorts of skills that
we need in the future.
Q62 Chairman: Is this the first year
that you have ever done this exercise of providing this target
of 65% staff utilisation for 2008-09? Is there a figure for 2006-07
or 2007-08?
Chris Moxey: On a directly comparable
basis, no. We grew greater certainty and understanding about what
that measure was all about through the process of creating our
strategic plan. The FCO, the Minister and we are firmly focused
on the notion. We understand what productivity means. We want
to move it from about 65% very much closer to 70%, and perhaps
even a little higher. If it gets to that point, that would demonstrate
strong and effective health within the organisation.
Q63 Chairman: You cannot get to
100% can you?
Chris Moxey: No, we certainly
cannot.
Q64 Chairman: And you probably
could not get to 90%, could you?
Chris Moxey: No. People have down
time. They are certainly off sick from time to time.
Chairman: They have holidays.
Chris Moxey: Exactly. They have
annual leave that needs to be adhered to, and training and courses.
We develop the skills and competencies of our staff throughout
the organisation. We do not expect 100%, but we want to be clear
about how they are recording their time so that it deals with
those issues at either end.
Q65 Chairman: At the same time,
you are under pressure to have efficiency savings as well?
Chris Moxey: That is right.
Q66 Chairman: Which could perhaps
have a negative impact on the quality of the work that you do
or, alternatively, you might have job vacancies for several months
while you are dealing with efficiency by reducing your staff complement,
but it takes time to recruit someone else so your utilisation
rate does not work properly.
Chris Moxey: Yes, there is a difficult
balance in all that. That is why the FCO, and the advice that
we together offer the Minister in setting these formal targets,
is not setting the hurdle too high for us, given the change in
arrangements that we have ahead of us in this the early stages—our
first year—of our being a Trading Fund.
Chairman: Thank you. Gentlemen, I think
that we will conclude here. Thank you for coming. I place on record
how much those of us who went enjoyed our visit to Hanslope Park.
We hope to go again at some point to see what progress you are
making. We were impressed by the quality of the people whom we
met there.
Chris Moxey: Thank you, Chairman.
You would be welcome any time.
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