Written evidence from the Ministry of
Justice
ACCOUNTING OFFICER RESPONSE FOLLOWING 2nd
NOVEMBER 2010 HEARING ON FINANCIAL MANAGEMENT IN THE MINISTRY
OF JUSTICE
Following the hearing on 2
November 2010 please find enclosed an Annex responding to key
issues raised at the hearing where I promised a further note.
These items were:-
- The NOMS schedule of the directory of services
for Specifications, Benchmarking and Costing (SBC)
- A note on the accountability structures and arrangements
for Arms Length Bodies
- A note on fines collection
- A note on Probate fees
- A note on LIBRA following questions in private
session
I also include a note on the unusual accounting challenge
which the MoJ faces relating to Probation Trusts, where the MoJ
has to consolidate local authority Probation Trusts balances into
its accounts. Our research shows that other Government Departments,
while they clearly transact with local authority entities, do
not face this consolidation challenge which results in timing
difficulties for the closure of my Department's resource accounts.
For information I also enclose some slides which
give more information around the NOMS SBC programme.
Could I also take this opportunity to amplify the
point that I made at the beginning of the private session that
the evidence that I gave in that session should not be made public
in any way? I make this request in line with the Osmotherley rules
and the Cabinet Secretary's memorandum to the PAC of 21 July 2008.
11 November 2010
ANNEX OF SUPPORTING INFORMATION FOR THE CHAIR
OF THE COMMITTEE OF PUBLIC ACCOUNTS FOLLOWING THE PAC HEARING
OF 2ND NOVEMBER
2010 ON FINANCIAL MANAGEMENT IN THE MINISTRY OF JUSTICE
PROMISES OF
FURTHER WRITTEN
EVIDENCE:
1. A list of the 70 (cost-activity) items covered
by Specification Benchmark and Costing programme - SBC.
2. A note on the accountability structure between
the Permanent Secretary and the Department's ALBs.
3. How many of the fines, as a percentage of
those originally imposed in courts, are collected?
4. A briefing on Probate Fees
5. A briefing on NOMS accounts and MoJ consolidation
6. A note on the expenditure on LIBRA
LIST OF
70 SPECIFICATIONS FOR
BENCHMARK COSTING
Q32 Mr Bacon When you say lines of service, I
asked before about the 17 things you are going to cost. I don't
mind if you have to read them out. but what are these 17 items-
Ann Beasley: Seventy.
Q33 Mr Bacon: Seven-zero?
Ann Beasley: Yes.
Q34 Mr Bacon: So could you send us
a list of them then, rather than read them all out?
Ann Beasley: We can certainly send you
a list, yes.
NOTE:
The schedule of services is listed on
the next page. Highlighted in green are the 22 Services signed
off by the beginning of October 2010.
The amber highlighted services are due
to be completed by December.
Note of the accountability structures around Non
Departmental Public Bodies
Q82 Chair: Chris has just passed me a note
and I think it would be very helpful if we had a note from you
on the current accountability structures between yourselves and
all these agencies. Let me just make this point. In my time I
have dealt with NDPBs. In
your annual contract \-vith them, or your
triennial contract or whatever it is, you can lay down pretty
clearly what you expect in return for the money that you give
to them. So you may not be able to hire and fire, and you are
kept at a distance from that, but you can be absolutely specific
about what information you want and what monitoring you expect
to do.
Sir Suma Chakrabarti: You can and that
is where we have got to.
NOTE
¾ The
accountability structure between the Permanent Secretary and the
MoJ's key Executive Agencies and ALBs is documented in the relevant
framework document. Each of the framework documents is individually
drawn up and appropriate to the particular body. All framework
documents are in line with guidance issued by the Cabinet Office
and HM Treasury.
¾ The
Permanent Secretary meets periodically (proportionate to the size
and risk of the body) with the Chair or Chief Executive of each
of the large Executive Agencies (NOMS, HMCS and Tribunals Service)
as well as the LSC. Directors General are tasked to provide line
and performance management to a number of ALBs, including the
smallest of our Executive
¾ Agencies
(the Office of the Public Guardian).
¾ The
Permanent Secretary issues annual letters of delegation to Accounting
Officers in the key ALBs - these accord with the guidance in Managing
Public Money
¾ ALBs
are required to undertake active risk management. There is a system
to the Departmental Board. A similar system is in place for the
provision of key performance and financial information.
¾ Financial
scrutiny of the NDPBs is embedded in the financial monitoring
by the corporate finance directorate and included in the monthly
management accounts report to the Value for Money Improvement
Committee and then onto the Executive Management Board and the
Departmental Board.
Whilst we are confident that all of the appropriate
systems are in place to monitor and hold our key ALBs to account,
I would repeat concerns voiced at the hearing about the lack of
direct levers to intervene if an Executive NDPB is not performing
and fails to respond to the MoJ's concerns. Senior appointments
to Executive NDPBs are not made by the Permanent Secretary nor
any MoJ official and the ultimate lever of dismissal for poor
performance is not available to the Department.
NOTE ON THE FINES COLLECTION PERFORMANCE
Ql19 James Wharton: May
I make a request that you send some information to the Committee,
just to be clear? I do not want this issue of the fines to get
away. My concern is this: I do something wrong and the magistrates
give me a £500 fine, but, six months down the line, neither
they nor anyone else has managed to collect it from me, so I go
back to the magistrates and they write it off and say, "We'll
cancel your fine, because you're never going to pay it.'·
It will not then appear in these figures. What I want to know
is not how many of the fines after the write-offs are collected,
but how many of the fines that are originally imposed are collected.
Will you send us that information?
Sir Suma Chtakrabarti: We could send a note.
NOTE
From April 2010 to the end of September 2010, £162,872,628
of financial penalties were imposed. In the same period £146,015,700
of financial penalties were collected and £23,536,925 were
administratively cancelled. This gives a payment rate (before
cancellations) of 78.3%
The payment rate (after administrative cancellations)
was 89.7% over the same period.
NOTE ON
PROBATE FEES
Q125 Austin Mitchell:
I have another question arising from that. We have had a number
of problems in Grimsby with fishermen's compensation in Icelandic
waters where the fisherman is dead. Dependants want to get probate
on the will, because they have been told there "will be no
payment without probate. The fees seem exorbitant. These are poor
fishermen trying to get probate on a will to establish the right
to compensation for fishing in Icelandic waters 25 years ago and
they are being screwed. You are screwing the probates, because
they are easy to collect.
Sir Suma Cltakrabarti:
Obviously, I haven't come prepared to discuss the probate relating
to fishermen.
Q126 Austin Mitchell:
But that's where you're making the money. You are not making
the money on the fines.
Sir Suma Cltakrabarti:
I will be happy to write to you once I have established the facts.
NOTE
Under the non-contentious probate fees order 2004,
there are 11 fees that can be charged. These range from £5
for a photocopy/search to £90 for a personal application.
On average the total fee payable by an individual would be £102.
Probate fees were last increased in 1999.
Probate fees may be remitted in accordance with the
remissions policy so that those who have insufficient means are
still able to access the probate service
NOTE ON
CONSOLIDATION OF
PROBATION TRUSTS
Q55 Chair: I have to
say that 1 think this is a nonsense argument. 1 look to the NAO.
Teachers also work on local authority pension schemes, I assume,
and yet J do not get the DFE-as it is currently called - complaining
about that. I assume that most of DCLG's money is local authority
pension schemes, and we do not get it from them. Amyas, can you
comment on that particular point and then come in on whatever
it was you wanted to say?
Amyas Morse: It
is clear that there are other Departments that are dependent on
local authority information. You would not argue with that, J
take it.
Ann Beasley: I
think it depends on how they are consolidated into the accounts.
Amyas Morse: That's
a fair comment.
NOTE
The Ministry of Justice is not in the same position
as other Departments due to the fact that we consolidate the probation
trusts into our resource accounts and their staff have pensions
which are administered by the Local Government Pension Scheme
(LGPS).
To our knowledge the position of Probation Trusts,
which are NDPBs, being consolidated into an agency's and then
a Department's accounts is unique across government.
The Probation Trusts work to the local authority
accounting timetable which requires their accounts to be certified
by 30 September.
We have reviewed the accounting treatment of the
Teachers' Pension Scheme (England & Wales) and the National
Health Service Pension Scheme and found that they have their own
Estimates and they are not consolidated into the departmental
resource accounts of the Departments for Education or Health.
Separate resource accounts for these pension schemes are produced
and audited by the NAO.
A NOTE ON
THE COST
OF LIBRA—THIS
EXTRACT FROM
THE CLOSED
SESSION
Q159 Mr Bacon: I meant
to ask in the public session-it is probably one for Ann Beasley-about
the Libra project that we looked at seven years ago now. At the
time it was £390 million. When I asked Alex Allan, Sir Suma's
predecessor, about it in 2006, it had gone up by nearly another
£100 million to £487 million. I was told the other day
that it is now £560 million, but I don't know if that's true.
Do you know what the total cost to public funding of the Libra
project is?
Ann Beasley: I
don't know that figure.
Q160 Mr Bacon: Can
you write to us?
Ann Beasley: Certainly.
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