Examination of Witnesses (Questions 120
- 139)
WEDNESDAY 21 OCTOBER 2009
MR ANDREW
STAFFORD AND
MR ADAM
LAWRENCE
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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