Supplementary memorandum from the Department
for Environment, Food and Rural Affairs
QUESTION 14 (CHAIRMAN):
ACTION PLAN
ON WHAT
DEPARTMENTAL AO INTENDS
TO DO
IN RESPONSE
TO EACH
OF THE
REPORT'S
RECOMMENDATIONS (BY
THE END
OF JANUARY
2010)
As requested, an action plan will be sent to
Committee at the end of January detailing actions planned and
already taken in relation to the NAO's recommendations. Given
that the RPA review will not have been completed by that point,
the plan will inevitably be a working draft that will evolve over
the subsequent months. However, we are happy to commit to also
providing a final version of the plan when the review is complete
and to share our thinking with the NAO in the intervening stage.
QUESTION 21 (MR
CURRY): LENGTH
OF TENURE
OF PREVIOUS
CHIEF OPERATING
OFFICERS AND
REASONS FOR
DEPARTURE
The requested information is provided in the
table below:
Name
| Length of Tenure | Reasons for Departures
|
Simon Vry (Interim) | March 2006-1 July 2007
| Replaced by a permanent appointee-Mr Vry had previously been working in the RPA as Business Development Director
|
| Hugh Taylor | 11 June 07-30 April 08
| Not retained by the Agency beyond probationary period
|
William Burton
(Interim) | 19 May 08-31 October 08
| Appointed as a permanent Chief Executive in another organisation
|
| Steve Pearce (Interim) | from 16 October 08-to date
| N/A |
| |
|
QUESTION 35 (MR
CURRY): ACCENTURE
CONSULTANTS—DETAILS
ON NUMBERS
INVOLVED IN
SCHEME WORK,
ROLE THEY
PLAY, DAILY
FEES AND
COSTS OVER
THE LAST
SIX YEARS,
WITH REFERENCE
TO
NOTE PROVIDED
TO COMMITTEE
AFTER JANUARY
2008 HEARING
Supplementary Evidence
The RPA's contract with Accenture provides for three different
types of services.
— Support and Maintenance of the RITA System
There is a fixed annual fee paid to Accenture for the ongoing
support and maintenance of the system. This ensures that the system
is kept running and that any bugs are addressed and the system
operates as designed. This agreement was put in place in 2003
and the scope of services and cost basis has largely remained
the same since the start of the contract.
— Upgrades and Enhancements to the RITA System
In order to meet CAP regulatory changes, the RITA system may require
enhancements. Such changes are provided through different projects
and these are delivered on an outcome basis. RPA and Accenture
enter into an agreement to deliver an upgrade to the system and
this is done on a fixed price basis for each project. This agreement
is not entered into on an individual day rate basis but as an
overall price to deliver an outcome. RPA and Accenture have agreed
to a risk sharing contract, as previously reported by the PAC
and the NAO. In terms of this contract Accenture carries some
of the risk and are rewarded for successful achievement against
RPA objectives. This forms the majority of work performed by Accenture
at the RPA.
— Ad-hoc Consultancy Services
Accenture occasionally provide ad-hoc consultancy services to
RPA, mostly in project management services for the successful
delivery of projects within RPA. These services are procured on
a day rate basis as and when required through the RPA procurement
process. The cost of ad-hoc consultancy in FY 08/09 was £5m
(VAT inclusive), with daily rates ranging from £838-£2,095
per day (VAT inclusive). However, Accenture did undertake some
key business support activities during this period on a non-chargeable
basis. The average rate per person in this period was £931
(VAT inclusive).
The table 1 below shows the number of people working in each
of the Accenture teams at the RPA over the last three years.
TABLE 1
| FY06-07
| FY07-08 | FY08-09
|
| Team | FTE's |
FTE's | FTE's |
System Support and Maintenance |
21 | 22 | 21 |
| System Upgrades and Enhancements | 177
| 178 | 153 |
| Ad-hoc Consultancy | 17 |
25 | 22 |
NB—as per the description of how the contract works, the fees paid do not change based on the number of FTEs in each team and it is the responsibility of the supplier to staff the right number of people to complete the contracted work.
| | | |
Table 2 below provides the total payments made to Accenture
since the commencement of the Solution Supply Agreement (RITA
Contract) until the end of FY 08-09. The total of £177.91m
is gross of recoverable VAT; the net figure is circa £156m.
The figure of £122m provided to the Committee following
the last hearing was a snapshot at that point in time and, therefore,
included within the Table 2 figures.
TABLE 2
| Financial Period | Total Payments (£)
|
January 03-March 04 | 19,642,781
|
| April 04-March 05 | 7,752,406
|
| April 05-March 06 | 29,708,088
|
| April 06-March 07 | 39,406,689
|
| April 07-March 08 | 46,563,870
|
| April 08-March 09 | 34,832,812
|
Total | 177,906,646 (inclusive VAT)—circa
£156m* (net of recoverable VAT)
|
*In his response to Q.39 Mr Cooper referred to a figure of £148m which is the figure recorded on RPA's current finance system. The £156m additionally includes some payments from 2003 which were recorded on an earlier system.
| |
The spend to-date (31 October 2009) in FY 09/10 totals £36,201,562
(inclusive of recoverable & non-recoverable VAT). Future spend
will fall into one of two categories, namely: 1) fixed and known
contractual obligations and; 2) activity to support future policy
change. By their nature we have a high degree of confidence in
respect of future costs regarding the former, whereas the latter
is subject to a number of variable factors, so figures are based
on current working assumptions.
Future spend for the remainder of the Contract term (31 December
2011) is estimated as follows:
Remainder of FY 09-10 (i.e. 1/11/09—31/3/10)—£199,456
(fixed) + £2,000,000 (variable) = £2,199,456 (£2,584,361
inclusive of recoverable & non-recoverable VAT)
FY 2010-11—£3,647,346 (fixed) + £12,500,000
(variable) = £16,147,346 (£18,973,132 inclusive of recoverable
& non-recoverable VAT)
FY 2011-12—£2,649,258 (fixed) + £5,000,000
(variable) = £7,649,258 (£8,987,878 inclusive of recoverable
& non-recoverable VAT)
Therefore the total estimated outturn spend until Contract
term is calculated at £244,653,579. The equivalent figure
net of recoverable VAT would be circa £214 milion.
QUESTION 44 (MR
CURRY): COPY
OF INTERNAL
AUDIT REPORT
ON RURAL
LAND REGISTER
REFRESH
Attached with this memorandum are both the summary report
of the audit of the RLR programme and the second interim report
of the programme (the first interim report only covered the system
upgrade element.)
Please note that, as with all internal audits reports, these
are restricted documents and while we are happy to provide them
to the Committee we request that they should not be published.
QUESTION 127 (MR
BACON): QUOTES
FROM EFRA SELECT
COMMITTEE HEARING
ON WHO
SAID "NIGHTMARE"
AND WHO
SAID "MADNESS"
IN DESCRIBING
THE DYNAMIC
HYBRID POLICY
The quotes referred to at the Committee hearing were attributed
to Defra and RPA members of staff during evidence given by representatives
of the Tenant Farmers Association to the Efra Select Committee
in 2007. That evidence can be found at the following links:
Oral evidence (Q.2-Q.8)—
http://www.publications.parliament.uk/pa/cm200607/cmselect/cmenvfru/107/6042401.htm
Supplementary written evidence (points 17-18)—
http://www.publications.parliament.uk/pa/cm200607/cmselect/cmenvfru/107/6042408.htm
Given the passage of time and the fact that both of the members
of staff concerned have now retired, it is not possible to comment
further on those quotes. However, it should be noted that the
stakeholder meeting referred to in the evidence occurred at a
very early stage of the analysis work on SPS models.
QUESTION 133 (MR
WILLIAMS): EX
-GRATIA PAYMENTS
MADE TO FARMERS
The total numbers of ex-gratia and consolatory payments made
by the RPA are given in the table below. Ex-gratia payments are
made when, for example, an incorrect application was made as a
direct result of the Agency's actions. Consolatory payments are
made to reflect, for example, the distress and inconvenience arising
from mis-handling of applications but which did not affect the
value of scheme payment due. The average payment in such cases
is generally much lower (around £200) than for ex-gratia
payments.
The payments are listed in the table according to financial
year in which they were made rather than the scheme year to which
they relate, which will generally be earlier. First payments in
respect of SPS were made in financial year 2006-07.
Financial Year | Number
| Value (£) |
2006-07 | 6 |
8,428.74 |
| 2007-08 | 9 | 14,595.02
|
| 2008-09 | 19 | 31,522.55
|
| 2009-10 | 21 | 50,194.59
|
| Total | 55 | 104,740.90
|
| |
|
QUESTION 155 (MR
BACON): GARTNER
BENCHMARKING DATA
ON SPS IT SYSTEMS
The following independent review reports produced by Gartner
are attached to this Memorandum:[10]
— Independent Review of RPA Information Systems
Appropriateness (February 2007)
— Epsilon Release Value for Money Review of Accenture
Fixed Price Estimate (May 2008)
— Zeta Release Value for Money Review (January 2009)
— SPS Systems Appropriateness Review (July 2009)
In respect of the two RITA Releases, Gartner concluded that
Epsilon "does represent Value for Money", whereas Zeta
"falls outside the bounds of a fair market price". RPA
accepts that there were a number of contributing factors which
drove the Zeta outcome, primary amongst these were: 1) a conscious
decision to de-scope functionality within the release to protect
CAP Health Check policy changes and; 2) commencement of the project
was delayed owing to that decision making process. Notwithstanding
these issues, RPA subsequently negotiated a £100,000 discount
with Accenture with regard to the cost of Zeta. RPA believes that
this together with the above mentioned factors provided a reasonable
VFM outcome.
In response to one of the main Gartner recommendations, RPA
and Accenture have revised the approach for estimating development
activity costs. The new approach means that costs for any proposed
activity are calculated on a bottom-up basis, a top-down basis
and a functional basis to ensure a sound estimate is derived.
ADDITIONAL NOTES
In response to Q.29, Mr Cooper was considering Board
members and overlooked the customer director referred to by Mr
Curry who was not a member of the Board. The individual in question
was a long standing member of RPA staff who, following agreement
with the previous senior management in RPA, departed under the
exit arrangements in place during the Change Programme with a
package worth £337,000. RPA is currently in the process of
recruiting a Customer Compliance Director on to the Agency Management
Board.
In response to Q.132, Dame Helen Ghosh gave a figure
of "about £5 million" for interest payments made
to farmers a result of their SPS payments being made after the
end of the regulatory window. The actual figure is £3.7 million.
10
Not reproduced here. Back
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