1. Supplementary memorandum of the Comptroller
and Auditor General, National Audit Office
INTRODUCTION
1. In my Report of 18 June 2009, I
explained the background to the qualification of my audit opinion
on the accounts of the Commission for Equality and Human Rights
for the period from 18 April 2006 to 31 March 2008.
The purpose of this supplementary memorandum is to provide further
details of the problems faced by the Commission before it took
on its powers on 1 October 2007 and update the Committee
on some more recent issues with the Commission's controls over
staffing and staff costs. The Commission is still investigating
these latter issues and as a result I have yet to complete my
audit of the Commission's 2008-09 accounts or to conclude
on my audit opinion.
2. Under the Equality Act 2006, the new
Commission, which is now known as the Equality and Human Rights
Commission, took on the responsibilities of the three legacy equality
Commissions; the Commission for Racial Equality, the Disability
Rights Commission and the Equal Opportunities Commission, as well
as taking responsibility for protection against discrimination
on the grounds of age, religion or belief, sexual orientation
and the promotion of human rights in the United Kingdom.
QUALIFIED AUDIT
OPINION OWING
TO IRREGULAR
EXPENDITURE ON
RE -ENGAGED
CONSULTANTS
3. During the 2006-08 accounting period
the Commission incurred expenditure of some £11,136,000 in
relation to the voluntary early severance and voluntary early
retirement of former employees of the three legacy equality commissions.
Such employees mostly ended their employment at 30 September
2007, when the legacy commissions ceased to exist.
4. In the period up to and after 1 October
2007, the new Commission realised it did not have sufficient senior
staff in post to operate effectively. It attempted to resolve
this problem by re-engaging seven former employees of the former
Commission for Racial Equality on short term consultancy contracts,
but did so without obtaining the requisite approval from the Government
Equalities Office and the Treasury.
5. These seven staff had left the Commission
for Racial Equality under the early exit scheme at a cost of £629,276,
and were then paid a total of £323,708 in consultancy
fees by the Commission. Some £308,434 of these fees
related to the 2006-08 period, with the remainder being paid
in 2008-09. The total amount paid per individual varied between
£2,702 and £105,216, in line with the contracts
given to these individuals by the Commission. In all cases the
fee rates paid were higher than the salaries previously paid.
Five of these staff were re-engaged from 1 October 2007 without
a competitive procurement process, and their contracts had all
ceased by 31 March 2008. The other two were re-engaged in
2008 after a break in service. Further details of the amounts
paid are set out in my report on the Commission's 2006-08 accounts.
6. When it was eventually formally consulted
in January 2009, the Treasury concluded that it could not grant
retrospective approval for the payments to legacy commission staff,
as they did not represent value for money. The Treasury particularly
stressed that there was insufficient evidence to demonstrate that
re-engaging the staff provided value for money compared to other
options. As the Treasury did not approve the payments, I qualified
my audit opinion on the Commission's accounts. Further details
of the Treasury's concerns are included in my report on the accounts.
THE SET
UP OF
THE COMMISSION
7. There was a difficult and convoluted
process of setting up this new body, with delays in making a number
of key decisions about the Commission's policies and staffing.
A timeline, showing what decisions were made and when, is set
out at Annex A to this Memorandum.
8. The Commission's 2006-08 accounts show
that it incurred expenditure of £38.8 million on activities
specifically related to the transition to the new Commission.
These activities including formally closing down the three legacy
commissions, and transferring their assets, liabilities, buildings
and residual staff to the new Commission. A breakdown of the Commission's
2006-08 transition expenditure is set out at Annex B.
9. After the £11.1 million cost
of the voluntary early retirement and early severance scheme,
the most significant area of expenditure was the £8.7 million
salary costs for the team set up to manage the transition. The
accounts show that this team consisted of, on average, 83 individuals
of whom the majority were agency staff.
GOVERNMENT OVERSIGHT
10. In the period preceding the Commission's
start up on 1 October 2007, there were changes in where Government
responsibility for managing the start up of the Commission lay.
The changes created a degree of distraction and confusion in the
process of setting up the Commission, which complicated the decision
making process at a crucial time.
11. Prior to July 2007, responsibility lay
with the Department for Communities and Local Government. In July
2007, the Government announced that it was setting up a new Government
Equalities Office, which would sponsor the Commission. Initially
this Office was to be part of the Department for Work and Pensions,
but by September 2007 Government had decided that the Office
would be a separate Government Department with its own Accounting
Officer. Until an individual could be appointed to that post,
the Accounting Officer for the Department for Communities and
Local Government retained Accounting Officer responsibility for
the Office.
12. Despite these changes, many of the staff
responsible for sponsoring the Commission, including those at
senior levels, remained the same and the Office successfully put
in place the legal and statutory framework required to establish
the Commission on 1 October 2007. However, because this sponsor
team was small, it was not self-sufficient and relied on support
and advice from the wider Department, particularly in areas such
as Finance and Human Relations. As the responsible Departments
changed, so the people responsible for this wider support changed,
causing delays in some elements of the transition. Consequently,
important agreements were not finalised on a timely basis. For
example, the Framework Document setting out the Commission's managerial
responsibilities and the Department's delegations to the Commission,
was not formally approved until April 2008.
13. On the particular issue of the re-engagements,
the Commission first raised in writing issues relating to the
possible re-engagement of one of these staff with the Accounting
Officer of its then sponsor Department (Department for Communities
and Local Government) in May 2007 and obtained approval for
this individual's re-engagement on condition this was only up
to the end of September. In July 2007 it made a more substantial
submission to the Accounting Officer of the Department (Department
for Work and Pensions) that was then expected to take over the
sponsor role. While these Departments agreed the principle that
the Commission could retain essential staff on a casual basis
to support the transition during this period, the Commission accepts
that it pursued these matters with an inadequate level of formality
and detail. In particular, the Commission did not present a clear
business case for either the number of staff involved or the duration
of their re-engagement.
14. In the light of these problems, and
given the changes in sponsorship of the Commission which make
an overall assessment of the success of the set-up programme difficult,
the Government Equalities Office and the Commission have jointly
commissioned an independent "lessons learned" review.
The review is focussing on the implementation of decisions taken
in setting up the Commission. The review is due to report shortly
and a copy will then be made available to the NAO.
THE READINESS
OF THE
COMMISSION
15. The Commission's perceived need to re-engage
staff from the legacy commissions arose from its own lack of senior
staff and organisational capacity in the period immediately before
and after the 1 October 2007 start date. A number of
these problems were first properly identified by an Office of
Government Commerce Gateway review in May 2007, which expressed
serious concerns that there was a high risk of the Commission
not being ready to start operations on 1 October.
16. The report expressed particular concern
that, at the time of the review, the Commission was not ready
to start operations on 1 October 2007, and that there was
a lack of clarity on what it would be offering stakeholders or
staff on day one of its existence. Underlying this lack of readiness
were two key problems; a lack of senior staff and a lack of strategic
development. The report made eleven urgent recommendations for
improvement.
17. However, the origin of many of these
problems lay in the start up of the programme to set up the new
Commission. At the start there was an underestimation of the size
and complexity of the programme, which resulted in limited due
diligence work, some weaknesses in budgeting and a lack of investment
in the skills necessary to run the programme.
THE INITIAL
STAFFING OF
THE COMMISSION
18. The lack of staff was particularly acute
at senior management level. When the Commission started operations
on 1 October, it did so with only 10 out of the agreed
complement of 25 Directors in post. The first Chief Executive
only took up post on 1 March 2007, and was not appointed
as Accounting Officer until 24 May. Four members (including
the Chief Executive) of the senior management team joined in the
period leading up to 1 October and, while they had considerable
specialist skills, they had insufficient time to develop as a
team before the Commission started operations. At the same time,
the Secretary of State had appointed 11 Board members (including
three transition members from each of the legacy commissions),
as well as the Chair and the Deputy Chair, by the end of 2006.
19. The delays in appointing the senior
staff was a crucial failing, as a newly created organisation needs
to have a senior management team in place sufficiently early to
prevent a decision making vacuum, ensure effective operational
management is in place from the beginning and to develop a business
strategy and transition plan. As a consequence, the senior management
team were developing the strategic direction of the Commission
whilst at the same time, being required to shape and direct immediate
operational matters including the stabilisation of the transition
programme.
20. These staffing problems were mirrored
throughout the organisation. The legacy commissions offered all
their staff voluntary early severance in July 2007, and some 185 people
elected to leave through this scheme. The new Commission had very
little influence over which staff agreed to take the severance,
and lost staff who filled key roles in the legacy bodies. Furthermore,
the number of staff who accepted severance meant that as at 1 October
2007, the new Commission started operations with a shortfall of
some 140 staff against its approved complement of 525. Of
the staff who did transfer, the new Commission did not have sufficient
time to finalise job descriptions or complete job evaluations
before starting operations. Consequently, the Commission was unable
to match people to roles or confirm the content of individual
jobs. Understandably, this had a negative impact on the morale
of the staff in post, and matters were worsened further because
of an unresolved pay remit, leading to ongoing uncertainty about
staff terms and conditions. Indeed, the pay remit was not finally
agreed by the sponsor Department and the Treasury until September
2008.
THE STRATEGIC
DEVELOPMENT OF
THE COMMISSION
21. The Office of Government Commerce report
in May 2007 identified that six months before going live
the Commission had not agreed a business strategy, an organisational
design or a transition strategy for the period leading up to 1 October.
While work was ongoing to put together a business structure, there
was a risk that this structure would not reflect the eventual
requirements of the organisational design. The lack of an organisational
design also meant that the Commission could not be clear on the
content of individual jobs or agree job descriptions.
22. The report expressed particular concerns
that the period between the first OGC report in May 2006 to
May 2007 was not subject to effective programme management.
The business case for the setting up of the Commission had not
been updated and the report noted there was a failure to work
in a joined-up way across projects and workstreams. The report
also commented that risk and issue management was limited, with
incomplete risk documentation and a lack of any real contingency
planning.
23. At the same time, not enough work had
been done to either fully define the Commission's budget requirements
or to be clear on the level of funding that would be available.
While the Commission did subsequently progress this issue sufficiently
quickly that it had a working budget in place by 1 October,
the Government Equalities Office did not formally approve the
Commission's 2007-08 budget until November 2007. Further
to this, the Commission's financial infrastructure remained weak
as at May 2007, with financial procedures not yet in place and
difficulties in getting financial information transferred from
the sponsor departments' and legacy commissions' systems into
its own systems.
24. Following recognition of these weaknesses,
the Commission initiated a phased programme for going live. Instead
of a full launch on 1 October, the Commission went from transition
to a build up phase on 1 October 2007, with a full operational
launch from 1 April 2008. This phased process followed best
practice, as it allowed the Commission to focus on achieving basic
operational readiness on 1 October and to present a "business
as usual" face to stakeholders. The Commission accepted that
achieving full integration could only be achieved over a longer
timescale, which meant extending the transition programme to March
2008. The initial delays in developing important strategies and
plans contributed, along with subsequent factors, towards the
Commission's continuing problems during 2008, and to some extent
in 2009, in finding itself unprepared or acting reactively on
matters of administration or internal control.
25. While the Commission's new Chief Executive
acted promptly on the May 2007 report's recommendations,
there was insufficient time to rectify all the identified problems
fully before 1 October. Consequently, while the Chief Executive
was able to quickly recruit some expert consultants, including
a Programme Director to lead the final stage of the transition
programme, the Commission still recognised that it would face
a number of skills gaps at 1 October 2007. It considered
that it needed to put interim arrangements in place to minimise
the risks to the start up, including the continuation of the transition
team. In the Commission's view, this required the temporary recruitment
of specific former staff from the legacy commissions.
26. Part of the problem was the legacy commissions'
voluntary early severance scheme, which was agreed by the Department
for Communities and Local Government and the Treasury in January
2007. The scheme was managed by the legacy commissions, although
the new Commission would actually pay for it, and as a result
the new Commission had little say in determining which staff left
the legacy commissions under this scheme. In the end more people
than expected took the severance and thus many important skills
and much corporate knowledge was not available to transfer to
the Commission. The Commission did discuss with the Government
Equalities Office the option of deferring the departure of the
re-engaged staff under the voluntary early severance scheme, but
as the scheme was tied to the bodies which were due to expire
before 1 October, this proposal was not considered feasible.
27. In the view of the National Audit Office,
those responsible for setting up the new Commission initially
underestimated the scale and complexity of the task. As permanent
senior staff started to be appointed in early 2007, this was increasingly
realised and the Commission put in place the phased start referred
to in paragraph 24. The OGC Report in May 2007 made clear
the scope of work that still needed to b e completed to ensure
a successful start for the Commission. While the Commission was
able to put in place all the recommendations made by the OGC Report
and deliver a high volume of outputs by the end of September 2007,
it was starting from too low a point to allow all appropriate
actions to be taken before the Commission started operations in
October 2007.
2007-08 AND
2008-09 PAY REMITS
28. All non departmental public bodies,
such as the Commission, are required to agree annual pay remits
with their sponsor Department and the Treasury, which set out
the maximum level of pay increases for permanent employees. The
Commission agreed its first pay remit with the Treasury in September
2008, using estimates of the number of permanent staff who were
expected to be in post by the end of the remit period. The agreement
allowed a maximum pay increase of 4% for permanent staff in post
in the last six months of 2007-08 and a maximum of 4.45%
for 2008-09, which assumed that the Commission would recruit sufficient
permanent staff to fill the vacancies. The Commission has, however,
breached these limits.
29. Following the September 2008 agreement,
the Commission and the Government Equalities Office agreed a phased
harmonisation of pay within the limits. The Commission made the
first backdated pay increase in December 2008 and paid the
final element in June 2009. However, in March 2009, the Commission
revisited its baseline pay calculations to reflect the actual
number of permanent staff in post, rather than the estimated number
used in the initial calculation. As the Commission had fewer permanent
employees in post during 2007-08 and 2008-09 than it
had anticipated when agreeing the pay remit, it actually paid
average increases for staff in post of 6.81% for the six month
period of 2007-08 and 4.8% for the twelve month period of
2008-09. Whilst the total cash increase paid was in line with
the agreed pay remit and phased harmonisation plan, the average
increases were above the maximums agreed with the Treasury. While
this breach of the pay remit was not intentional and reflects
the unexpected lack of permanent employees referred to earlier,
it does mean that the Commission has incurred total expenditure
of some £221,000 without proper authority. The Commission
started to pay these increases in December 2008, and so only £163,000 of
this unauthorised amount was actually paid in 2008-09, with the
remainder being paid in 2009-10.
HUMAN RESOURCES
INFORMATION
30. While the breach of the pay remit relates
to the use of estimated staff numbers rather than actual, it needs
to be considered as part of the continuing difficulties that the
Commission has experienced in maintaining accurate and complete
information on its staff.
31. As noted above, the Commission employed
fewer permanent staff in its first two years than it had planned
for. In response, it employed agency and interim staff to fill
the staffing gaps. In May 2009 the Commission noted that
it had a growing overspend in its expenditure on agency and interim
staff and therefore undertook a comprehensive review of its use
of such staff. This identified that the total staff employed,
including agency and interim staff, exceeded the authorised complement.
As noted above, the Government Equalities Office had authorised
the Commission to have a complement of 525 full time equivalent
staff. In July 2009 the Commission actually had 574 full
time equivalent staff, once temporary and agency staff were included.
32. Once the senior management team had
identified the problem, they notified the Chair, the Chair of
the Audit and Risk Committee, the Government Equalities Office
and the National Audit Office. This issue indicates weaknesses
in the Commission's processes for the recording, monitoring and
reporting of staff numbers, as well as problems with the processes
for approving temporary staff appointments. The Interim Director
General has commissioned an inquiry to determine in detail how
the situation arose and the Commission hopes that this report
will allow it to further strengthen the oversight and governance
by the Board and the Remuneration Committee. A copy of the report
will be made available to the NAO in due course.
33. On identifying the problem, the Commission
took action to resolve it. It has frozen recruitment and is reducing
temporary staff numbers, such that at the end of August 2009 the
Commission employed 547 full time equivalent staff. In the
light both of this problem and more general experience since it
started, the Commission is also reviewing its organisational design
with a view to ensuring that it is fit for purpose.
AUDIT OF
2008-09 ACCOUNTS
34. The Commission is still in the process
of preparing its 2008-09 accounts, and I have yet to complete
the audit and to reach my audit opinion. Nevertheless, as part
of my audit report on the 2008-09 accounts, I will comment
further on the problems with the pay remit and the staff complement,
as well as the Commission's progress in improving its general
internal controls.
THE GOVERNANCE
OF THE
COMMISSION
35. In the period since the issues covered
by my original report occurred, the Commission has developed its
financial and performance reporting, reviewed and strengthened
its governance arrangements, strengthened procurement arrangements,
developed financial guidance to staff and worked to enhance the
budget and business planning framework. As the problems with the
pay remit and the staff complement demonstrate, there are continuing
issues which the Commission will need to address and continue
to prioritise, as set out below.
36. The Commission's Audit and Risk Committee
was established in August 2007 and has scrutinised the way
in which the Commission has addressed the issues referred to in
my report. The Committee agreed and oversaw a programme of internal
audit reviews, which focused on the set up of systems and framework
of delegated authorities, governance, procurement and staffing.
The Audit and Risk Committee has consisted of four Commissioners
and two independent members. While three of these Commissioners
and the two independent members were due to end their terms of
office during the period October to November 2009, two of the
Commissioners (including the Chair) have either resigned or announced
their intention to resign. The two independent members on the
Committee have announced their intention not to accept a further
appointment to the Committee.
37. Despite this loss of members, the Commission
needs to ensure that the Committee is able to continue to function
effectively. It has commenced recruitment to replace the members
and is seeking to appoint high calibre individuals with the skills
to provide the necessary scrutiny, constructive challenge and
guidance to successfully deliver the Committee's delegated governance
role.
38. In accordance with the terms of the
framework agreed between the Government Equalities Office and
the Commission, the Commission's Board is responsible for setting
and monitoring the delivery of the Commission's strategy, objectives
and budget and ensuring that effective arrangements are in place
to provide assurance on risk management, governance and internal
control. However, the Board did not formally discuss the issue
of re-engaging staff from the legacy commissions at the time it
took place, which suggests, in my opinion, a weakness in its monitoring
of the Commission's performance and operational management. Nevertheless,
the Board has a key role to play in ensuring that the Commission
continues its efforts to develop effective internal controls and
that management are properly discharging their responsibilities.
39. The Commission undertook a review of
its corporate governance in 2008-09 and one of the recommendations
was that a reduced size of Board (from the current 17 Commissioners
including the Chief Executive and the three temporary Transition
Commissioner positions to around 10 to 12 Commissioners)
would help to improve the effectiveness of the Board. Of the 17 Commissioners,
two resigned in March 2009 (which included the Chief Executive),
three resigned in July 2009 and a further Commissioner's
term of office ended in September. Of the remaining Commissioners
there are eight whose term of office will end in December.
40. The Board is therefore entering a time
of considerable change and will need to continue to prioritise
its development, particularly in respect of its oversight of the
effectiveness of the Commission's risk management, governance
and internal control. With the need to appoint a number of new
Commissioners, a skills review has been completed and this has
influenced the recruitment process currently being undertaken
by the Government Equalities Office and the Commission. In particular
the Department and the Commission are seeking to strengthen the
business and administrative skills on the Commission Board, and
this is reflected in the skills specification used for the recruitment.
OTHER CURRENT
DEVELOPMENTS IN
IMPROVING MANAGEMENT
AND CONTROL
41. In addition—or where appropriate
as a complement—to the Commission's improvement measures
already mentioned, the Government Equalities Office and the Commission
have been reviewing their relationship and ways of working in
the light of experience of the Commission's first 18 months
of operation with a view to developing specific improvements in
process. These include:
— Preparation of a new Framework Agreement,
currently in discussion between the two bodies. This covers a
wider range of Commission and Government Equalities Office responsibilities,
and in more detail than the existing Agreement. It also makes
provision for a formal review of the Commission's performance
three times a year;
— a new approach to supervision and scrutiny
of the Commission's financial performance based on detailed financial
information reaching down to individual programmes and staffing
areas;
— revised Departmental spending limits
for 2009-10 and 2010-11, in agreement with Treasury, to achieve
a better balance between administrative and programme limits,
and to tighten budgetary forecasting and profiling in both the
Government Equalities Office and the Commission. For the Commission,
reductions in both programme and capital funding will reinforce
other, existing work to improve the importance of close monitoring
and effective use of public money.
Amyas C E Morse
Comptroller & Auditor General
27 October 2009
Annex A
1. TIMELINE OF
THE KEY
EVENTS LEADING
UP TO
THE ESTABLISHMENT
OF THE
COMMISSION
| Date | Event
|
18 May 2005 | Equalities Bill: 1st Reading (Lords).
|
September 2005 | Transition programme starts, Programme Director appointed.
|
11 November 2005 | 1st Reading (Commons).
|
16 February 2006 | Royal Assent given to Equalities Act.
|
March 2006 | Commissioner and Chair positions advertised.
|
18 April 2006 | Commission for Equality and Human Rights becomes a body corporate.
|
May 2006 | OCG Gateway review flags "amber" status with 6 amber recommendations.
|
11 September 2006 | Trevor Phillips appointed Chair of the Commission.
|
4 December 2006 | Baroness Prosser of Battersea took up appointment as Deputy Chair.
|
| The following Commissioners took up their appointments: Kay Allen, Baroness Campbell of Surbiton, Kay Carberry, Jeannie Drake, Baroness Greengross, Professor Kay Hampton, Professor Francesca Klug, Sir Bert Massie, Ziauddin Sardar, Ben Summerskill and Dr Neil Wooding.
|
September 2006 | Commission for Racial Equality agrees to merge into the Commission in October 2007 rather than March 2009.
|
18 December 2006 | First meeting of the Board.
|
| — Membership of Board committees was agreed; and
|
| — The report of the Interim Programme Director noted that the transition project was on a "red" rating due to delays in appointing Commissioners and a Chief Executive.
|
January 2007 | Appointment of CEO announced.
|
25 January 2007 | Second meeting of the Board.
|
| — A Business Plan Working Group and a Finance and Development Committee were formed;
|
| — The report of the Interim Programme Director to the Board noted that the project was still on a "red" rating; and
|
| — The Board considered the broad principles of the Organisational Design and agreed that the Chair and Interim Programme Director should report back with more detailed proposals to the Finance and Development Committee and to the February Board meeting.
|
22 February 2007 | Third meeting of the Board.
|
| — The interim Programme Director's report showed the project was still rated as "red".
|
1 March 2007 | Dr Nicola Brewer took up appointment as Chief Executive.
|
22 March 2007 | Fourth Meeting of the Board.
|
| — Reports were submitted on the early exit scheme, pay and grading models, and assimilation process. However, the transition project remained at "red".
|
29 March 2007 | Morag Alexander took up appointment as a Commissioner.
|
26 April 2007 | Fifth meeting of the Board.
|
| — The Board discussed the Estates Strategy. Overall, the Transition project continued to be "red" rated.
|
30 May 2007 | The OGC Gateway Review was issued, which gave the transition project a red rating. There were 11 red recommendations and one amber.
|
17 May 2007 | Sixth Meeting of the Board.
|
| — The Chief Executive presented a paper to the Board on lessons learned from previous mergers;
|
| — Organisational principles were discussed, and the Board agreed that the intention was to create an organisation that was fluid and task based. An organogram was presented and it was decided that it should be developed further, tested with working groups and circulated to Commissioners;
|
| — The Board approved the appointment of Commissioners and an external member to the Audit Committee; and
|
| — The Chief Executive advised the Board of the three phases of the Commission's development; from transition up to 1 October, the build-up phase of the Commission up to spring of 2008, then further development thereafter.
|
| 24 May 2007 | Nicola Brewer was formally appointed as Accounting Officer.
|
7 June 2007 | First meeting of the transition Programme Board.
|
| — Terms of reference and the OGC Gateway Review were discussed.
|
19 June 2007 | Second meeting of the transition Programme Board.
|
| — The "Day 1" Offering was discussed. Only 50% of office accommodation in London was expected to be ready for 1 October 2007; and
|
| — Draft budgets were discussed. The operating budget for the period post 1 October 2007 was not considered to be as robust as the budget for the transition project.
|
21 June 2007 | Seventh Meeting of the Board.
|
| — The Board received and noted a paper tabled at the meeting by the Chief Executive that set out her responsibilities as AO, and the implications for the Board;
|
| — The Chief Executive also presented the findings of the OGC Gateway review;
|
| — The Board agreed that consequent to the establishment of a Programme Board, as recommended in the OGC report, the Finance and Development Committee and Business Plan Working Group would be disbanded;
|
| — The Chief Executive submitted a paper seeking the views of the Board on the content and structure of a first version of the Interim Business Plan, and outlined the budget set out in the Plan; and
|
| — The Chief Executive submitted a draft paper providing an early sight of the emerging Organisational Design.
|
3 July 2007 | An "all staff" meeting was held to introduce staff to the Organisational Design, and to introduce the group directors in post.
|
6 July 2007 | Third meeting of the transition Programme Board.
|
| — The Programme Board approved the "Day 1 Offering";
|
| — Noted that the interim budget had not yet been approved by government; and
|
| — Noted that the change of sponsor presented a major risk to the transition project.
|
16 July 2007 | Eighth meeting of the Board.
|
| — The Board noted that there would be c515 FTE posts in the Commission, but that after the Early Exit Scheme only 370 staff were expected to transfer from legacy bodies. This would then be followed by an external recruitment exercise, which would include recruitment to many of the Director level posts.
|
24 July 2007 | Fourth meeting of the Programme Board.
|
| — The Programme Board made decisions on which legacy properties were not required.
|
26 July 2007 | Machinery of Government change, with a Government Equalities Office to be established as part of the Department for Work and Pensions.
|
20 September 2007 | Ninth meeting of the Board.
|
1 October 2007 | The Commission took up its powers as set out in the Equality Act 2006 and the Legacy Commissions ceased to exist.
|
11 October 2007 | Machinery of Government change, with the Government Equalities Office to have its own Director General and Accounting Officer.
|
| |
2. TIMELINE OF
APPOINTMENT OF
DIRECTORS
Date | Event
|
1 March 2007 | The Chief Executive took up appointment.
|
2 July 2007 | Group Director—Corporate Management took up appointment.
|
6 August 2007 | Group Director—Legal took up appointment.
|
25 August 2007 | Group Director—Strategy took up appointment.
|
17 September 2007 | Finance Director took up appointment.
|
24 September 2007 | National Director for Scotland took up appointment.
|
1 October 2007 | National Director for Wales took up appointment.
|
1 October 2007 | Directors for Casework, People, IT and Buildings, and Policy (Private Sector) transferred from the Legacy Commissions.
|
22 October 2007 | Acting Director of Information appointed on temporary promotion.
|
23 October 2007 | Acting Director of Legal Enforcement appointed on temporary promotion.
|
28 October 2007 | Acting Director of Legal Policy appointed on temporary promotion.
|
5 November 2007 | Directors of Legal Policy and the Disability Programme took up appointment.
|
12 November 2007 | Director of Foresight (job share) took up appointment.
|
19 November 2007 | Director of Business Planning took up appointment.
|
26 November 2007 | Director of Commissioners' Office took up appointment.
|
1 December 2007 | Director of Foresight (job share) took up appointment.
|
4 December 2007 | Group Director—Communications took up appointment.
|
7 January 2008 | Directors of Legal Enforcement and Stakeholder Management took up appointment.
|
14 January 2008 | Director of Research took up appointment.
|
28 January 2008 | Directors of English Regions and Information took up appointment.
|
4 February 2008 | Director of Corporate Law and Governance took up appointment.
|
10 March 2008 | Director of External Affairs took up appointment.
|
| |
3. TIMELINE OF
DISCUSSIONS OVER
THE RE
-ENGAGEMENTS
OF STAFF
AS CONTRACTORS
This timelines provides details of the key written and e-mailed
communications between the Commission and the Government Equalities
Office on the re-engagement issue.
Date | Event
|
25 May 2007 | The Commission's Accounting Officer wrote to the Department for Communities and Local Government (CLG) requesting approval for the possible re-engagement of a specific CRE staff member.
|
19 June 2007 | CLG wrote agreeing to this re-engagement on interim basis providing it did not extend beyond 30 September and that treatment is in line with any other staff leaving under early exit scheme—ie that any re-engagement thereafter requires express CLG approval.
|
16 July 2007 | Machinery of Government change sets up the Government Equalities Office within the Department for Work and Pensions.
|
31 July 2007 | The Commission wrote to the DWP Accounting Officer regarding Director appointments and raised the possibility of varying the early exit release date. The Accounting Officer responded on 9 August promising a more detailed response once advised by DWP colleagues.
|
02 & 04 August 2007 |
Emails from GEO to the Commission in response to this proposal. Concern expressed about various aspects of the proposal to delay the early exit scheme, and it is ultimately rejected on the grounds that the staff's employment contracts relate to the legacy commissions, which will no longer exist after 30 September.
|
24 August 2007 | The Commission emailed the GEO stating that there were a number of skills gaps in the Commission and transition team as a result of staff leaving through the early severance scheme, and that it was the Commission's intention to retain a select number of legacy commission staff for a short period on a contract basis.
|
6 September 2007 | The GEO emailed the Commission, noting that the Commission was no longer proposing to vary the terms of the early exit scheme, but was now considering re-engaging selected staff. In this context, the GEO drew attention to the letter from CLG of 19 June, given that the Commission was now proposing retaining the services of a number of staff beyond 30 September.
|
24 September 2007 | The Commission emailed the GEO to set out some proposed temporary arrangements to cover transitional staff gaps in certain key business areas and the significant business risks to the Commission if these gaps were not filled (eg 72% vacancy rate at director level as at 1 October 2007).
|
25 September 2007 | The Commission e-mailed the GEO to confirm that the rates quoted by the Commission to the GEO were market rates from OGC's "Catalist" suppliers of agency staff.
|
26 September 2007 | The GEO emailed the Commission seeking assurance that the staff concerned could be re-engaged on a casual or consultancy basis without constituting a continued contract, and requesting more information to support the research done on market rates. The GEO was not convinced from rough calculations that some of the proposed rates represented best value for money and on this basis refused to endorse the business case, which it considered went beyond the permission given by CLG on 19 June.
|
28 September 2007 | The GEO emailed the Commission seeking information on what was happening to the staff in the interim, pending agreement on the business case?
|
28 September 2007 | The Commission emailed the GEO noting that 7 named staff were being re-engaged from 1 October on a contractual, interim basis and that it would provide more detailed documentary evidence.
|
10 October 2007 | The Commission emailed the GEO with the additional information promised on 26 September.
|
15 October 2007 | The GEO emailed the Commission replying that the business case was not adequately based on market rates and that it could not therefore progress the case.
|
26 October 2007 | The GEO wrote to the Commission setting out concerns expressed by the Finance team of Communities and Local Government, which it had consulted about the proposal. These issues included possible Commission liability for Employers' National Insurance contributions and assurance on the pension position.
|
29 February 2008 | The Commission wrote to the GEO outlining which legacy commission staff had been re-engaged and the reasons for those re-engagements.
|
11 March 2008 | The GEO responded to the Commission's letter of 29 February asking for additional information on the voluntary early exit scheme and details of the staff re-engaged.
|
12 March 2008 | The Commission sent the GEO the completed transitional staffing information in the table format requested in the GEO's letter of 11 March.
|
14 March 2008 | The Commission received internal legal advice that it had a legal duty to pay the re-engaged staff and, on the basis of this advice, the Transition Team agreed to authorise payments that it had previously withheld pending sponsor Department approval.
|
18 March 2008 | The GEO wrote to the Commission seeking information on the re-engaged staff and liability to pay compensation, National Insurance contributions and tax.
|
19 March 2008 | The Commission responded to the GEO confirming that it had received and acted on Cabinet Office guidance.
|
1 May 2008 | The GEO wrote to the Commission noting that information relating to the re-engagement of legacy commission staff was still outstanding.
|
5 June 2008 | The GEO wrote to the Commission confirming what further information it required on the re-engaged staff before it could give approval.
|
7 August 2008 | The Commission replied to the GEO's letter of 5 June and supplied the information requested.
|
1 October 2008 | The Commission provided further documentary evidence to the GEO relating to the re-engagement.
|
11 November 2008 | The GEO wrote to the Commission explaining that the papers supplied on 1 October were not sufficient and requested detailed answers to further questions.
|
12 December 2008 | The Commission replied to the GEO with detailed information on the questions raised in the letter of 11 November.
|
5 January 2009 | The GEO wrote to the Commission seeking assurances on the contracts of staff re-engaged.
|
14 January 2009 | The Commission replied to the GEO with the documentary evidence requested on 5 January.
|
19 January 2009 | The GEO submitted a business case to the Treasury presenting the case for retrospective approval of the re-engagement of former members of legacy commission staff as consultants. The GEO, however, made it clear that it did not recommend that approval should be granted.
|
12 March 2009 | The Treasury confirmed it could not grant retrospective approval for the re-engagement of former members of staff as consultants.
|
| |
Annex B
2006-08 EXPENDITURE ON
THE TRANSITION
The following costs were incurred by the Commission on managing
its set up and the final closure of the legacy commissions. It
excludes costs incurred by the sponsor Departments on managing
the set up before the Commission came into legal existence on
18 April 2006.
| Costs £m
| Accounts Reference |
Revenue Expenditure |
| |
Voluntary early retirement and early severance scheme for employees of the Legacy Commissions
| 11.1 | p64, Income and Expenditure Account, line 7
|
Salary costs for the Transition Team |
8.7 | p74, Note 3,b line 7
|
Costs arising from the disposal of unwanted properties inherited from the Legacy Commissions
| 2.7 | p76, Note 4, lines 4 and 5
|
Consultancy costs | 1.9
| p76, Note 4, contained within line 6
|
Loss on disposal of unwanted assets inherited from the Legacy Commissions
| 1.4 | p64, Income and Expenditure Account, line 14
|
Other costs relating to the Transition
| 3.7 | p74 and p76, Notes 3 and 4
|
Total Revenue Expenditure | 29.5
| |
Capital Expenditure |
| |
Fit out of new offices and purchase of new furniture, IT equipment and software
| 9.3 | p77, Note 5a, line 3 and p78, Note 5b, line 4
|
Total Expenditure | 38.8
| |
| |
|
|
