Equality and Human Rights Commission - Public Accounts Committee Contents

1. Supplementary memorandum of the Comptroller and Auditor General, National Audit Office


  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.


  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.


  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.


  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.


  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.


  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.


  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.


  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.


  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.


  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.


  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


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 2007Nicola 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.



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.


  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.


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


  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
11.1p64, Income and Expenditure Account, line 7

Salary costs for the Transition Team
8.7p74, Note 3,b line 7

Costs arising from the disposal of unwanted properties inherited from the Legacy Commissions
2.7p76, 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
1.4p64, Income and Expenditure Account, line 14

Other costs relating to the Transition
3.7p74 and p76, Notes 3 and 4

Total Revenue Expenditure

Capital Expenditure

Fit out of new offices and purchase of new furniture, IT equipment and software
9.3p77, Note 5a, line 3 and p78, Note 5b, line 4

Total Expenditure

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