Administration and expenditure of the Chancellor's departments, 2008-09 - Treasury Contents

Examination of Witnesses (Questions 120 - 139)



  Q120  Jim Cousins: In fact I think you achieved that in the year before last. How many redundancies have you declared?

  Mr Stafford: Within the last twelve months we have had no redundancies.

  Q121  Jim Cousins: And in the twelve months prior to that?

  Mr Stafford: In the twelve months prior, I think I am right in saying there were 200.

  Q122  Jim Cousins: 200?

  Mr Stafford: Sorry, it's the year before that, so for the last two years there have been no redundancies. Forgive me, it was back in 2005-06.

  Q123  Jim Cousins: And your present employment is—

  Mr Stafford: 765 permanent employees and about approximately 100 temporary employees, which flexes that according to seasonality, but there are 765 permanent employees.

  Q124  Jim Cousins: The number of your permanent employees is not going up. Is the number of your casual employees going up?

  Mr Stafford: As I say, we have to cope with seasonal peaks but basically we have a very stable workforce and we envisage over the next 12—24 months that we will increase our overall workforce by approximately 100 as we grow the business in commemorative coin for the London 2012 Olympics and we have announced that we expect an increase in our workforce of approximately 100.

  Q125  Jim Cousins: Mr Stafford, would you confirm to the Committee that the Treasury guidance is that companies which move from a trading fund status to a Government-owned company status are generally on a path to privatisation?

  Mr Stafford: I could not comment on whether or not that is the case because—

  Q126  Jim Cousins: You cannot comment on the case that that is in the Treasury guidance?

  Mr Stafford: I can't comment on that because the statement around the Royal Mint is that we are moving to a Government-owned company if we go through the vesting process. There is no intended statement of policy to move to privatisation and there has never been any public record of that fact.

  Q127  Jim Cousins: The Treasury's guidance, general guidance on these matters is that organisations which move from trading fund status to a Government company status are on a path to privatisation?

  Mr Stafford: That is your statement. I can neither confirm nor deny that statement because it is not for me to state what the Treasury's policy is on that matter.

  Q128  Jim Cousins: You have never checked back to see that that statement is in the Treasury's general guidance?

  Mr Stafford: Whether or not it is in the general guidance, it is not specific to the Royal Mint.

  Chairman: We will have to speed up, I am afraid, because these are important issues. Mark Todd, fast, snappy questions, and snappy answers if we can!

  Q129  Mr Todd: I will try. You currently outsource a significant portion of your work to third parties in other countries, I think in the USA, Australia—there are actually some blanks in your report, am I right? Your Finance Director is nodding and you are looking blank!

  Mr Stafford: No, I am not, I am trying to understand what you said. When you say "outsource", we buy in precious metal blanks for our commemorative coins, so the gold and silver blanks for our commemorative issue.

  Q130  Mr Todd: Okay, got it. You presumably faced a significant price increase in the last twelve months. Have you had any quality concerns?

  Mr Stafford: We have had some quality concerns because when you start moving to new suppliers sometimes you have to be very diligent and ensure they understand the specifications that we demand, which may be higher than those which they have previously been used to, and we have had to work very closely with the suppliers to improve the quality of that.

  Q131  Mr Todd: Has there been a transfer of blank production to these overseas locations from the UK or has that been something you have historically tended to source from those?

  Mr Stafford: Three years ago there was a decision made to cease production of gold blanks in the Royal Mint because the volumes required were so small relative to the—

  Q132  Mr Todd: I think I have heard silver as well, is that right?

  Mr Stafford: Yes. So the answer is that a decision was made to cease production of them because the volumes were not sufficient to warrant retaining that production.

  Q133  Mr Todd: Okay, now you have seen the outcome in terms of quality and price are you thinking that was the correct judgment to make?

  Mr Stafford: We still are very sure that that was the correct decision because we have managed to negotiate better terms and improve the quality substantially over the last twelve months.

  Q134  Mr Todd: Have you conducted a valuation of the business as it stands?

  Mr Stafford: A valuation of the business? Well, part of the process for the vesting will be to determine what capital structure is appropriate for the new vested organisation.

  Q135  Mr Todd: So does that include an exercise of valuing the business?

  Mr Stafford: No.

  Q136  Mr Todd: For example, for a trade sale?

  Mr Stafford: No.

  Q137  Sir Peter Viggers: You routinely screen for counterfeit coins and your estimate on that screening is that in October 2008 it was 2.58% of pound coins that were counterfeit?

  Mr Stafford: Yes.

  Q138  Sir Peter Viggers: How do you respond to the coverage by a representative of Williams, a firm which make counterfeiting equipment, that in fact the true number of counterfeit coins in circulation is about twice your estimate?

  Mr Stafford: We undertake these surveys every six months and we have got data going back several years, and we are very comfortable that our analysis is correct. We take a representative sample and we have statistically proven that there is a consistency in our methodology and therefore the right level is 2.58%.

  Q139  Sir Peter Viggers: In 2007, I understand that 97,000 fake coins were removed from circulation, 97,000 for the whole year, whereas in the last quarter of 2008, I understand that 270,000 fake coins were removed. Are those figures right and what do they say?

  Mr Stafford: What it says is that we are becoming much more vigilant in the way that coins are removed from circulation, so one of the tasks has been for the banks to improve the method by which their machines in cash centres removed the counterfeit coins from circulation. So the challenge is not to say how many coins there are currently in circulation but to actually remove them from circulation. We have worked very closely with the Serious Organised Crime Agency (SOCA) and with the banks to make sure that our processes for identifying and removing from circulation those counterfeits is much more thorough, and I am very pleased to say that the banks are doing a very good job.

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