Equality and Human Rights Commission - Public Accounts Committee Contents



  The transition programme to establish the EHRC commenced in September 2005, with the Chair appointed by September 2006, the Board during December 2006 and the Chief Executive by March 2007. The transition programme had to deliver the start-up of the new EHRC and at the same time to manage the integration and transfer of business from the Disability Rights Commission, the Equal Opportunities Commission and the Commission for Racial Equality (as they would concurrently cease to exist as EHRC came into being on 1 October 2007). This all had to be achieved within 24 months.

  It is important that the costs of the transition programme—£27.7 million and a further £11.1 million for the associated voluntary early retirement and severance scheme—are seen in the context of what needed to be done, and in what timescale. The transition programme had to deliver the establishment of a new, single organisation infrastructure and at the same time rationalise and integrate the three former Commissions' staff, estates portfolio and associated office fittings, furniture and ICT and telephone systems and equipment. The profile of the full £38.8 million transition expenditure for the set up of the EHRC and costs that arose from the bringing together the three former Commissions into one organisation is set out in Annex 1. The main deliverables for the transition programme were;

    — the establishment of EHRC with an organisational design for around 500 staff; and

    — a suitable infrastructure for the business, including accessible office accommodation and centralised office, IT and telephone systems to be operational by 1 October 2007.

  In seeking to establish the EHRC with an organisational design for around 500 staff, it was essential not only that skills and knowledge from the former Commissions were retained, but that there was the scope to recruit new skills to support the considerably wider remit of the EHRC. In addition to race, equal opportunities and disability the EHRC deals with age, religion and belief, trans-gender, sexual orientation and human rights. The three existing bodies employed between them over 600 people and the plan was to transfer around 350 staff to EHRC to provide the right balance between continuity and the necessary flexibility to bring in new skills.

  To achieve this, the sponsor Departments responsible for the three out going Commissions agreed with Treasury the setting up of a voluntary early retirement and severance scheme. The terms of this needed to be in line with the Civil Service rules, as the staff of the legacy bodies were members of the PCSPS, which determined their retirement and redundancy arrangements. The scheme facilitated the departure of 185 individuals at a total cost of £11.1 million and gave the EHRC the flexibility in its staffing levels (with around 347 former Commission staff transferring) to recruit the additional skills and expertise it needed.

  In establishing a suitable infrastructure for the business (including accessible office accommodation and centralised office, IT and telephone systems) the combined portfolio of property and the former Commissions' IT and business support systems were reviewed against the EHRC business needs and current Government guidelines.

  EHRC was bringing together three different organisations into a new, single-culture organisation and this was to be achieved by 1 October 2007 without any handover period or gradual transfer of undertakings, as the former Commissions ceased operations on the 30 September 2007. Ultimately, the transition from three functioning organisations with helplines and regulatory functions to a single body with much a much wider remit had to take place over a single weekend.

  The three existing bodies had twenty separate office locations across GB ,many in the same cities (particularly London, Manchester, Edinburgh and Cardiff). It was necessary to consolidate these into single locations which resulted in some instances in EHRC establishing a new office and the need to dispose of the former Commissions' lease holding. A number of the offices were either not able to accommodate the combined number of staff transferring staff from the former Commissions or had poor accessibility or inadequate facilities (of particular concern for an equality body advocating good practice in employing a diverse workforce). As a consequence of the changes in the offices, a number of the existing fixtures and fittings, IT and office systems were also disposed of (details are given in Annex 3). Where possible, the better quality equipment and furniture from the former Commissions were relocated to the new EHRC offices. In the case of the Manchester offices, as these were in the same office block they were remodelled to give single reception, security access and a standardised fit out for the EHRC.

  The transition programme expenditure included the costs of accommodating the transition team through their inception in 2006 through to March 2008, the costs associated with the initial lease and running costs for new EHRC offices (as they were being prepared to accommodate the transferring staff on 1 October 2007), and the costs of winding down and ultimate disposal for the former Commission offices found to be surplus to requirement. The details of the £2.7 million costs arising from these activities are shown in Annex 2. The details of the legacy Commission properties and how they were integrated into the EHRC or disposed of are shown in Annex 4.

  Overall the rationalisation of the legacy commission portfolio and improved use of the floor space has meant that whereas the legacy commission portfolio consisted of 20 separate offices, with 122,534 square footage and accommodating 580 work stations, the current portfolio (shown in Annex 5) involves a 25% reduction in office locations (down to 15), a one-third reduced square footage (now 82,435 ) but with the potential to accommodate a higher number of work stations if needed. Further rationalisation is planned with the '151 BPR' site being disposed of in March 2010, and when the lease for 3 More London ends it is planned that the staffing requirement in London will be reduced and an alternative location found.

  The Commission is still seeking the disposal of legacy body properties—Fox Court, London; The Old Tun, Edinburgh and Ty-Nant Court, Cardiff. The on going liabilities for these properties have been accounted for in the 2008/09 financial statements.

  The final major undertaking was to develop a suitable infrastructure for EHRC to be operational on 1 October 2007, including the web site, the help desk and all business support systems (such as the intranet, finance systems, case and contact management, data storage and office systems). The former Commissions' IT and business support systems were reviewed against the EHRC business needs and current Government guidelines. In some cases a former Commission's base system was adopted by EHRC (for example the finance system, the telephone system), which had the advantage that some transferring staff would be familiar with the system and it helped in the transfer of skills and archive data. A consequence was that some former Commissions' own supporting infrastructure systems were therefore obsolete or incompatible with the EHRC infrastructure and so the associated IT software, IT and telephone hardware and linked office equipment was disposed of. The cost of this is included in Annex 3.


  The profile of the £38.8 million transition spend is shown by month in the attached Annex 1. In reviewing this schedule it should be noted that the £38.8 million transition programme costs were recorded in the DCLG and transition finance systems on the basis of when the invoices were received and payments made. At the year end the EHRC finance team reviewed all of the financial details, and in agreement with the NAO re-allocated, corrected and restated that transition team monthly expenditure which properly related to the EHRC operations and also that in relation to the fixed asset acquisitions. The work also included making year end accruals and some corrections to the categories some expenditure was being reported under in the draft financial statements. These adjustments are reflected in the 'Year End' column shown in the schedule. Accordingly the schedule provides the best estimate of when expenditure took place for the period 2006-2008.

  The details of the disposal of legacy Commission properties are shown in Annex 4. The accounting treatment for these transactions is complex, with some costs recorded in the liabilities of the closing Commissions and other costs being recorded in the EHRC costs of transition. For these reasons it is not possible to cross refer this schedule to the details of the £2.7 million expenditure (shown in Annex 2) reported within the £38.8 million transition costs. The accounting treatment for the disposal of the legacy properties has been reviewed and agreed with the NAO.

  Annex 2 sets out the expenditure details for the costs arising from the set up of the EHRC and disposal of unwanted properties inherited from the Legacy Commission £2.7 million. The detailed review of these costs by property has been limited as the transition programme records did not capture the property location for every transaction. The analysis therefore captures the regional location and where possible the exact property. The schedule gives an indication of the cost of rationalising the legacy Commissions' holdings in Cardiff, Edinburgh, Glasgow and London.

  Annex 3 sets out the Loss on disposal of unwanted assets inherited from the Legacy Commissions. The analysis is by the type of fixed asset and by the legacy Commission. This reflects both the disposal of assets, fixtures and fittings, IT infrastructure associated with Legacy Commission properties disposed of together with the disposal of IT equipment considered obsolete or surplus to needs.

13 January 2010

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