UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE
To be published as HC 1397-i

House of COMMONS

ORAL Evidence

Taken Before THE

Public Accounts Committee

FIRECONTROL

Wednesday 6 July 2011

Sir Bob Kerslake, Sir Ken Knight, Steve McGuirk and Roger Hargreaves

Evidence heard in Public Questions 1 - 206

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Oral Evidence

Taken before the Public Accounts Committee

on Wednesday 6 July 2011

Members present:

Rt Hon Margaret Hodge (Chair)

Mr Richard Bacon

Stephen Barclay

Stella Creasy

Jackie Doyle-Price

Matthew Hancock

Austin Mitchell

Ian Swales

________________

Amyas Morse, Comptroller and Auditor General, David Corner, Director, NAO, and Marius Gallaher, Alternate Treasury Officer of Accounts, gave evidence. Gabrielle Cohen, Assistant Auditor General, was in attendance.

REPORT BY THE COMPTROLLER AND AUDITOR GENERAL

The Failure of the FiReControl Project (HC 1272)

Examination of Witnesses

Witnesses: Sir Bob Kerslake, Permanent Secretary, Department for Communities and Local Government, Sir Ken Knight, Chief Fire and Rescue Adviser, Steve McGuirk, Chief Executive, Manchester Fire Service, Board Member, Chief Fire Officers Association, and Roger Hargreaves, National Project Director, FiReControl, gave evidence.

Q1 Chair : Can I just welcome you all? I am sorry you have not all got seats, those of you who have come in from outside. I am sure somebody is helping you. Just to get it clear, was anybody sitting in front of us around in 2004, with responsibility for this area?

Steve McGuirk: I was around in 2004.

Q2 Chair : But not with responsibility for this area?

Steve McGuirk: No, not quite.

Chair : Was anybody here in 2007 with responsibility for this area? Right.

Mr Bacon: Sorry, what was the answer to that question?

Chair : "No."

Mr Bacon: No? None of you?

Q3 Chair : The reason I took 2007 is that that was when costings were apparently properly done.

Sir Bob Kerslake : I should say, Chair, that I, as you know, was a nonexecutive on the board.

Q4 Chair : You will have to talk up.

Sir Bob Kerslake : I beg your pardon. I was a nonexecutive on the board, but not with responsibility for the project, of course.

Q5 Chair : Right. You are accountable, and it won’t be enough to just say, "Not me, Guv," if I can put it in that way. I want to start by trying to get you to help me to understand what went wrong. I want to start by asking what the purpose of the FiReControl project was. What problem was it trying to fix?

Sir Bob Kerslake : Shall I kick off on that question, Chair, if I can? The project’s aim was, as the NAO Report says, to essentially improve the resilience, efficiency and technology of the fire service-

Q6 Chair : I understand that. We have all read the NAO Report. What problem was it trying to fix?

Sir Bob Kerslake : The problem it was trying to fix was around the overall resilience of the system nationally. It was born out of issues that were raised under the experience of 9/11 and indeed some of the natural disasters around flooding. The issue it was trying to resolve was first of all how you could achieve the highest level of resilience and capability across the different fire and rescue services. If one service was taken out, would you be in a position where another service could completely take over mobilisation from that centre? The second thing was that clearly it also had an ambition to achieve efficiencies. There was a twofold agenda. One part was about strengthening resilience, having complete interoperability across the country between the different regional centres, and secondly it was to improve efficiency.

Q7 Chair : Had you guys sitting in front of us been there in 2004, would you have advised that this was a problem that needed to be addressed?

Sir Ken Knight: Chair, if I might help, I was of course in the Service at that time. I was not responsible for the project: I was London Fire Commissioner at that time. Sir Bob makes a very valid point. Up to that point, the 46 fire and rescue authorities all had varying different systems that could not technically talk to each other-

Q8 Chair : I understand that.

Sir Ken Knight: -different technologies that had moved at different paces. Some had very advanced equipment. Some had less good equipment. There was an inability to transfer calls in what we call spate conditions, large volumes from one to another, so it all just piled up in a pile waiting for those spate conditions to pall. Some of those definitions of resilience and interoperability were to ensure that you could shed calls and share calls, not cause delay by the 46 penny packets.

Q9 Chair : Was that a problem you would have tried to fix in 2004?

Sir Ken Knight: Yes, it was a problem, and it remained a problem. In fact, I did a report in 2008 on the flooding of 2007, which showed that just that problem occurred there. Calls came in that had to be shed, because that fire and rescue service could not do anything with them, and had to wait for the calls to subside. That was the inherent problem that occurred at that time.

Q10 Stella Creasy: What do you mean by "shed"?

Sir Ken Knight: Pass them to another. I will give you an example, if I may, Chair. In Gloucestershire the calls became overloaded in the fire control at that time. Clearly fire control couldn’t answer them. BT had the 999 calls and were holding them and moving them off to the fire and rescue service. They built up in faxes waiting for them to be passed back for the fire and rescue service to deal with them. There was an issue about capacity, and an issue about resilience.

Q11 Chair : Can I just pursue this line of questioning? If there was a genuine problem in 2004, about which you wrote a report in 2008, is it still a problem today?

Sir Bob Kerslake : The question was that, yes, there was a problem to be resolved, but was this the right solution, or indeed was a solution of this scale required? My personal view was that this was a very ambitious, complex and expensive way of resolving what were the problems at the time.

Q12 Chair : Is it still a problem today?

Sir Bob Kerslake : The answer is that there is still an issue to solve regarding the connectivity between the centres, but we believe that there is a lower cost and more bottomup approach to addressing that problem. That is now what we are proposing for the future FiReControl project.

Q13 Chair : I have noted and read the statement of your Minister to Parliament, and the attached papers on an £84 million investment to deal with the problem today that you were trying to deal with in 2004. On crude costings in July 2004 you said £120 million. By 2007 it had risen to £340 million, and as we sit here today, we already have losses of £469 million and are facing a potential further loss of £180 million. Why on earth, in 2004, did officials in your Department, which you lead today, not tell Ministers that they should be doing something that at today’s prices you are saying only costs £82 million to £84 million?

Sir Bob Kerslake : I think, as I said earlier, they were trying to achieve very big changes here. They were trying to achieve-

Q14 Chair : Why didn’t they tell them?

Sir Bob Kerslake : Why didn’t they tell them-

Q15 Chair : Why didn’t they tell them that they could fix this problem of interoperability and resilience, by doing whatever you are going to do today-I am no great technician-which your Minister has announced in Parliament earlier this week, surprise surprise, which will only cost £84 million at today’s prices?

Sir Bob Kerslake : There are two reasons why they gave different advice. The first was that they were trying to achieve a very high level of resilience, potentially higher than you need to achieve. It was hard to conceive of a situation where you would have needed the level of resilience that the fire control system required. However, there was a very ambitious agenda in terms of resilience. The second thing, as I touched on earlier, was that there was a desire not just to strengthen resilience, but move to a much smaller number of centres with a wholly different model of management, and an expectation that there would be efficiency savings achieved through that route as well.

Q16 Chair : But by 2007 they knew they didn’t have the efficiency savings.

Sir Bob Kerslake : By that point, of course, the project had developed to a very advanced stage. You asked the question: at the time, in 2004, I think what drove the thinking was a very ambitious scale of change, a very high level of resilience, and a desire to wholly reorganise the delivery of fire control centres in a way that also achieved efficiency savings.

Chair : Mr McGuirk, then I have one more question.

Steve McGuirk: I would agree with Sir Bob’s summary about the two reasons. There was a third, political dimension to this, however. At the time the fire and rescue service was coming out of a period of industrial unrest. We had new primary legislation coming, and there was a White Paper in June 2003. The fire service was on a direction of travel for regionalisation. Part of the drive was ministerial in the sense that that was where the fire and rescue service was seen to be moving. It was not just a wholly resilient, technological argument, although those were absolutely big driving parts of the project.

Q17 Chair : That leads me very sensibly to my final question. If it was ministerial, and it has turned out to be such a dreadful waste of taxpayers’ money, why did the Department-I accept it was not you-not seek a ministerial direction before embarking on a project where they had not done the costings properly, and where clearly there was a cheaper alternative? I have to say to you, Sir Bob, that I know you were not Perm Sec, but you were nonexec director at the time, so I assume there were discussions on the board. I cannot understand why there was no direction from Ministers.

Sir Bob Kerslake: Yes, there were discussions on the board, and the points that I raised earlier were ones that I made at the time about the scale of the investment compared to the problem, and the concern that I had at the time about whether or not fire and rescue services were willing to take on this technology. These were all points that were discussed, but the view of the officials on balance at that time was that the benefits of doing the scheme outweighed the risks.

Q18 Chair : Was there a discussion about a ministerial direction?

Sir Bob Kerslake : I don’t think it came to that, because as I say the view of officials was to recommend, with some issues identified as concerns, that the scheme went ahead. This was not a case where a direction would have applied, because the recommendation from officials, as I understand it, was to go ahead with the scheme.

Q19 Chair : The recommendation from officials was to go ahead with the scheme, despite the fact that they had no buyin from any of the fire authorities, very poor costings, questionable savings, and no idea about the IT. The recommendation from officials was to go ahead.

Sir Bob Kerslake: That is my understanding.

Q20 Mr Bacon: Why?

Sir Bob Kerslake: As I say, when they took account of all the issues involved in their judgment of the importance of tackling this issue of resilience and reducing costs, the judgment reached on balance was that the benefits of the scheme justified proceeding with the project.

Q21 Mr Bacon: What benefits?

Sir Bob Kerslake: As I say, the benefits of much stronger resilience and the opportunity to improve the efficiency.

Q22 Mr Bacon: The opportunity to improve efficiency is not a benefit. Improved efficiency is a benefit. The opportunity to do it is not a benefit. I ask again: what benefits?

Sir Bob Kerslake : Let me try again. First of all to improve resilience, secondly to achieve efficiencies, and thirdly, as Steve has said, that it potentially laid the foundations to move towards a regional fire service model.

Q23 Mr Bacon: It didn’t deliver extra resilience, did it?

Sir Bob Kerslake : Clearly not, because the project didn’t proceed, but that was the view. We are talking now about the views at the time.

Q24 Chair : It is 2004. There were several views. There was a view in 2004. Were you a nonexec director in 2007?

Sir Bob Kerslake : Yes I was.

Q25 Chair : Were there discussions on the board in 2007 as to whether to pull the plug?

Sir Bob Kerslake : There was no discussion at that point about whether or not the project proceeded. There were, as you will see from the NAO Report, a series of reviews that went on at each stage of the project.

Q26 Chair : And were this sort of project to arrive on your desk today, would you seek a ministerial direction?

Sir Bob Kerslake : I was not persuaded at the time, as I say, but I was a nonexecutive, only there in an advisory role. My personal view is that I would need some convincing about the ambition here and the potential risks against the benefits.

Chair : You would, wouldn’t you? You would. That’s the answer to that, is it?

Sir Bob Kerslake : It is hard for me to say that I definitely would. It is a hypothetical question. As I say to you now, however, I would have needed some very strong persuasion.

Q27 Mr Bacon: Was your scepticism as a nonexecutive director recorded at the time?

Sir Bob Kerslake : It was clearly referred to in the discussions in the meeting. I have not gone back and checked every note of the meetings, but it was clearly referred to in the meetings.

Q28 Stephen Barclay: The project was approved before a project plan or business case was finalised. Could you explain why that was the case?

Sir Bob Kerslake : The judgment was that there was a desire to move quickly on the project at pace. That is the first part. The second part is that the assessed risks for the project were seen primarily, and mistakenly, as we now know, around the development of the fire control centres. Therefore there was a need to move ahead on the physical centres. As a consequence of that, the project went ahead with, as you say, an incomplete cost-benefit analysis.

Q29 Stephen Barclay: Sure. They moved so quickly that they built the centres, and completed two of them, only three months after they managed to get the IT contract agreed.

Sir Bob Kerslake : Absolutely right. The judgment made, as I say, completely wrongly as it has now turned out, was that the IT would be the more straightforward part of this and the centres would be the difficult bit.

Q30 Stephen Barclay: If they were moving so quickly, why did it take them until 2007 to do a comprehensive assessment of costs? What was happening for three years?

Sir Bob Kerslake : I cannot answer the detail as to why there was not a comprehensive assessment of costs. What I can say is that the focus was very much on securing the delivery of the physical centres.

Q31 Stephen Barclay: The contract was flawed at the outset, never mind that it was mismanaged, which impacted on your ability to terminate. Given that it was flawed at the outset, and you had professional advisers to advise you on that contract, perhaps you may be able to help us with why you then continued to use those professional advisors on the termination.

Sir Bob Kerslake : When you say that the contract was flawed at the outset, we have to distinguish the elements of the project. There were clearly issues about how the project was started, as we talked about earlier, and the extent to which there was adequate buy-in from the fire and rescue services. So that is one issue.

Q32 Stephen Barcl ay: They were not legally bound by it. They were not even required to use it.

Sir Bob Kerslake : Absolutely. This was clearly a risk that was identified at the time in the discussion on the project. The expectation was that by working with the fire and rescue services, they would be persuaded that this was a project they should come on board with.

Q33 Stephen Barclay: Sorry, is your evidence that the contract was not flawed at the outset?

Sir Bob Kerslake : No, what I am saying is that there are two separate issues about the project.

Q34 Stephen Barclay: Was that yes or no, please? Was it flawed or not?

Sir Bob Kerslake : There are clearly issues about the way the project started without full buyin from the Service. I am absolutely clear about that. I go along with the view that the NAO expresses. The contract that we are talking about here, which went badly awry, was the IT contract with EADS, which was not signed until 2007.

Q35 Stephen Barclay: Could you tell us what your analysis is of the flaws in the contract at the outset?

Sir Bob Kerslake : I want to distinguish the project from the contract, I am sorry to go on about this. The flaws that are identified in the NAO Report in 2004 were flaws about the way in which the project itself started, and what they say, quite rightly, is that insufficient attention was paid to the buyin of the fire and rescue service, insufficient work was done to analyse the costs and get the full business case sorted, insufficient analysis was done about the risks, or there was insufficient understanding of the risks. To that extent it is quite clear that there were flaws in the start of the project in 2004. I am distinguishing that from the contract, which was in 2007 for the IT equipment.

Q36 Mr Bacon: Sir Bob, could I just ask you to repeat something? Sorry, just for the benefit of the Committee, I am not sure I heard. Did you say insufficient attention to securing the buyin of the fire and rescue services?

Sir Bob Kerslake : Yes, absolutely.

Q37 Mr Bacon: I just wanted to check that.

Steve McGuirk: Could I come in on the point about the contract itself, if it is helpful? The point of this exercise is to learn from this. The other thing I would add, not just about the fire and rescue service, is on local government lawyers. At the time that officials were negotiating the contracts, there were attempts from local government lawyers and fire and rescue service lawyers to come in and say: "Can we contribute, because we will have legacies and liabilities arising from this contract? Can we be part of the contract negotiations?" Expressions like "commercial confidence" and those kinds of expressions were liberally bandied around. Therefore the first time that local authority lawyers found out some of the liabilities they would be left with-not least the facilities, the rooms, why a 25year lease had been negotiated and so on, and that partnership working-was at quite a late stage in the project’s development. The standard terms that you would see in local government contracts were not in the central Government contract.

Q38 Stephen Barclay: But you had professional advisers advising. The cost on this was £68.6 million spent on consultants and £8.4 million on secondments. You had consultants advising you at the outset, and then you continued to use those.

Steve McGuirk: I did not.

Stephen Barclay: The Department did.

Sir Bob Kerslake : Could I just deal with that question? The reason that I wanted to distinguish the contract from the project was that there are two different sets of issues here. In terms of where the issues were on the contract, there was a full and detailed negotiation of the contract. The weaknesses in the contract were different. They were first of all that the milestones, and indeed the payments for the contract, came too late in the history of the project. What that meant was that when the project started to fail in its delivery, there were insufficient levers, if you like, in the negotiations with the private contractor.

Q39 Mr Bacon: But is that not the whole point about having a thorough project plan and a thorough business case and going through the processes of approval before you start? Then instead of its being done, as the Report says, at this extraordinarily fast pace, those milestones are in place before you start. This is basic, isn’t it?

Sir Bob Kerslake : Personally I think it is clear that there should have been both tighter milestones on the project, but also tighter milestones on the IT contract. Both were insufficient.

Q40 Chair : So the contract was flawed?

Sir Bob Kerslake : The contract, as it turned out, was flawed in the sense that it did not have early enough milestones where you could have held the EADS to account.

Q41 Mr Bacon: What is it about the creation of milestones that is so difficult, or so unusual, or so new? You said earlier that there was insufficient attention to getting the buyin of the fire and rescue service. Can you just say, in your experience, is failure to get the buyin a common problem in project failure?

Sir Bob Kerslake : I think it is quite often a problem.

Q42 Mr Bacon: It is an incredibly common problem.

Sir Bob Kerslake: Yes.

Q43 Mr Bacon: Is it not?

Sir Bob Kerslake : I would not disagree with you.

Q44 Mr Bacon: Given that it is so common, why does it continue to recur?

Sir Bob Kerslake : My personal view is that there is often an overcentralist approach to the delivery of projects. The historic experience of central Government is that it moves ahead on projects on the basis of its assessment of the issues, and does not sufficiently connect with the local players. There is not enough attention given to how you best deliver projects. The history is-and it goes back a very long time, bluntly-that central Government knows best.

Amyas Morse: Can I just supplement Mr Bacon’s point, and go back to what Steve McGuirk was saying? It is very important. A flavour might come of, "Well, perhaps the fire brigades did not want to join in because of whatever reason." However, what you are saying is that they were being given residual liabilities and they had not had an opportunity to represent themselves and negotiate. That is a rather more tangible reason for resisting. Is that right?

Steve McGuirk: That is absolutely right. Bear in mind that at the time, the whole resilience programme had three components, the FireLink, the radio scheme, the New Dimensions, all the kit for terrorism, and this was the third component. All of that had huge issues and liabilities and contractual negotiations going on simultaneously.

Q45 Chair : So the contract has been signed by the centre, but the liabilities are being picked up at the local.

Steve McGuirk: Absolutely. Certain liabilities were going to be picked up by local fire authorities, yes.

Q46 Chair : So who owns these white elephant buildings that we have around the place? Can I just get that clear? Who owns them?

Sir Bob Kerslake : The buildings are owned by the Department. They were leased buildings, in effect, so that we hold the leases on the contract. What Steve says is right-

Q47 Stella Creasy: Who is the freeholder, then?

Sir Bob Kerslake: Sorry?

Stella Creasy: Sorry. Who is the freeholder, then?

Q48 Chair : This is buy and lease back.

Sir Bob Kerslake : The freeholder is the companies that bought them, but they are on long leases.

Q49 Mr Bacon: How long?

Sir Bob Kerslake: 20 to 25 years.

Stella Creasy: So it is a PFI?

Mr Bacon: 25 years is not a very long lease.

Chair : It is a buy and lease back.

Q50 Mr Bacon: Do you mean that in 25 years’ time they will own the whole thing, lock, stock and barrel?

Sir Bob Kerslake : There will obviously be issues about whether the leases are extended on the contracts.

Q51 Mr Bacon: But if the leases were not extended, then in 25 years’ time these companies would own the entire asset. That is correct?

Sir Bob Kerslake: Yes.

Mr Bacon: They could then use it for something else, or knock it down, and they have the land.

Q52 Chair : Who are the companies?

Sir Bob Kerslake : It is a series of different companies who are involved.

Q53 Chair : Who?

Sir Bob Kerslake: I do not know. Roger, do you know?

Roger Hargreaves: They are investment companies. The original private developers tended to sell them on to investment companies.

Q54 Chair : Who?

Roger Hargreaves: I think Aviva is one. There is another big property company that has access to the-

Q55 Mr Bacon: Property investment management institutional investors. Could you send us a list of all of them?

Sir Bob Kerslake : I will just get them off the team now, if I can. Could I just come back to the liabilities? Steve is absolutely right to say that the fire and rescue services picked up some of the cost here, and one of the issues I had at the time was how willing they would be to do that. It is important to say that the majority of the cost, and the majority of the risk, lay with the Department. That is really important.

Q56 Matthew Hancock: Can I just step back to the big picture around this? Sir Bob, do you understand the anger that the waste on this has caused to people up and down the country?

Sir Bob Kerslake : I am very aware that when this scale of failure happens, and we cannot call it anything other than that, people will look at the scale of costs here and say, "This should not happen." It is our responsibility to ensure that we learn from projects like this and make sure it does not happen again.

Q57 Matthew Hancock: Let us take this to the local level. I represent West Suffolk. In Suffolk, they spend £22 million per year on fire and rescue services. The consequence of the budget crisis is that they are having to reduce that, and the services are being reduced, for instance from sevenday fulltime cover to fiveday fulltime cover with retained cover at the weekends. These are the sort of consequences that are happening around the country, and yet the fire service has wasted between £469 million and £649 million on this failed project.

Steve McGuirk: It is not the fire service that has wasted £469 million.

Mr Bacon: It is the Department.

Matthew Hancock: It is the Department, but the failure to buy in from fire services is a crucial part of it.

Q58 Chair : But the Department funds you.

Steve McGuirk: In part, but also the local taxpayers.

Q59 Mr Bacon: 75% comes through central Government, does it not? Or is it 70%?

Steve McGuirk: It is as low as 50/50 in some areas.

Q60 Matthew Hancock: On a fire branded issue, up to £649 million has been wasted, where in local areas changes that are causing great concern locally are happening for much, much smaller sums than that. Do you understand the consequence of that on the reputation of the fire service across the country?

Sir Bob Kerslake : I do not think this should bear on the reputation of the fire service, as Steve says, because this is clearly a failure of-

Q61 Mr Bacon: Lions led by donkeys, that is what it looks like, doesn’t it? Lions led by donkeys. We all meet our own fire people. They are great people. Mr Hancock’s point is that it is £649 million that could have been spent differently if it had been handed locally to people to be spent, with some sense of governance and control. We all know that the New Dimensions thing was going on at the same time. I have visited my own local fire service and been shown some of the antiterrorism stuff, and some of it is very impressive. What I find extraordinary is the sheer scale. This is twothirds of £1 billion, potentially. Paragraph 9 on page 6 sums it up: "Governance arrangements in the first five years of the project were complex and ineffective, which led to unclear lines of responsibility and slow decision-making. Additional layers of governance were created in response to emerging issues without clear lines of decision-making, accountability, responsibility, assurance, or internal challenge. In 2008, the Office of Government Commerce concluded that the project board was not operating as an effective decision-making forum. It was similarly concerned in 2009 about a cultural failing to share bad news early ‘across the breadth of the project’". This was an extraordinary failure of leadership that has cost nearly twothirds of £1 billion. Who is carrying the can for it?

Sir Bob Kerslake : I am sitting here, taking responsibility for the questions that you are raising.

Mr Bacon: You have a couple of hours that are slightly uncomfortable. It is not the same.

Matthew Hancock: Richard obviously shares my anger, so I will carry on with my line of questioning.

Mr Bacon: I am sorry.

Q62 Matthew Hancock: One of the failures in this, of which there were many, is that the deadline appears, according to Figure 5 on page 28 of the Report, to have been extended eight times. Why was the deadline continuously extended when it became more and more clear that the project was never going to work?

Sir Bob Kerslake : Yes, it is right to say there were extensions, but at each stage that there was an extension, there was a process of review, including external review. At each occasion the judgment taken by Ministers, by officials and indeed by the Select Committee was that the potential benefits at that point justified continuing with the project. It is worth remembering that as late as April 2010, the Select Committee still felt, on balance, that the project should proceed. As I said earlier, you have to see a combination of issues in the project. There were clearly failings in the way the project was conceived and managed along the way. What in the end led to the project being closed down, and this is very important to say, was the failure of the IT contract, which started in 2007. Had that been able to be delivered we might be in a different conversation today.

Q63 Matthew Hancock: Sir Ken, do you regret the negative impact that this had on the reputation of the fire service across the country?

Sir Ken Knight: I tend to agree with Sir Bob. I do not think the reputation of the fire service is at risk here. It has a high reputation. I certainly regret the effect that it has had on people such as control staff, who have felt they were moving and then were not moving, and now have had an uncertain future. They now have more certainty with the proposals. I certainly regret that the whole of the FiReControl project could not be completed, because, like CFOA, at the outset the concept and principles were welcomed. Of course the local engagement that Mr Bacon refers to is exactly right. It failed to recognise the sovereignty and independence of those 46 fire and rescue authorities, which themselves have the statutory responsibility to receive the calls. It washed over that rather too lightly in trying to provide a topdown approach to those fire authorities, which themselves are local authorities. I think the reputation of the fire and rescue service remains high, and will remain high as it continues to deliver a local solution.

Q64 Matthew Hancock: My final question is about project management. Clearly there has been shocking project management over this project. Mr Hargreaves, you are the National Project Director for FiReControl. How long have you been in that job?

Roger Hargreaves: I arrived in December 2008.

Q65 Matthew Hancock: How many National Project Directors were there before you?

Roger Hargreaves: There were three.

Q66 Matthew Hancock: So you are the fourth National Project Director. You picked up the project when it was already delayed and failing. At what point did you make an assessment that this project was wasting money and never going to be delivered?

Roger Hargreaves: During my time as Project Director I found myself having to provide advice to Ministers on those issues about once every three or four months, as we faced more challenges with the supplier.

Q67 Matthew Hancock: At what point did you think it was better to cancel the whole thing and work on the cheaper bottomup proposal that we have ended up with?

Roger Hargreaves: It was spring of last year.

Q68 Matthew Hancock: Spring of last year. Did you advise Ministers of that at the time?

Roger Hargreaves: Yes. It was around the point where there was a change of Government, and the advice that we prepared for incoming Ministers was the same in either case. We had significant concerns about the performance of the contractor and we had exhausted every opportunity to make things work, and we felt that they could not deliver to time, cost or quality, or at least give us evidence that would satisfy us that we should proceed on that basis. The advice would have been to that effect.

Q69 Matthew Hancock: How much would we have saved for the taxpayer had you made that assessment when you arrived at the job, rather than after two years in the job?

Roger Hargreaves: The monthly burn rate on the project was around £4 million, of which around £2 million was the buildings. That cost would have been there anyway, because of the nature of the contract. We were spending around £2 million per month on the National Project Team and all the work that was going on regionally and locally.

Q70 Matthew Hancock: Are you saying that, had we cancelled it two years earlier, we would only have saved about £50 million?

Roger Hargreaves: The decision to proceed with cancellation was a year or so after I started, and so on that basis you have one year’s worth rather than two years’ worth, and probably half the burn rate, so around £2 million. It is around £25 million.

Q71 Matthew Hancock: So because of your failure to make an early assessment that this project was not going to work, how much do you think was wasted?

Roger Hargreaves: It is fair to say that we did make regular assessments. I made an assessment when I arrived. I made assessments for Ministers in the summer of 2009, at the end of 2009 and early 2010. Those assessments-

Q72 Matthew Hancock: Were wrong.

Roger Hargreaves: -were on the basis of not only our own work but also the independent external advice that we received that the project could be made to work and that we should proceed. That is how we arrived at this.

Q73 Matthew Hancock: Those judgments were wrong, weren’t they, because ultimately the opposite judgment was made?

Roger Hargreaves: Ultimately we were not able to deliver the project, and the problems that we faced at the time proved not to be surmountable. That does not necessarily mean that, on the basis of the evidence available to us at the time, the judgments were wrong. In hindsight, if we had not ever started the project, then that would have been possibly the best course of action.

Q74 Chair : Could I ask something about the judgments? We keep hearing this. PA Consulting made nearly £70 million out of this. They were your external consultants. Those of us who have wandered occasionally into this world would know it is in their interest to keep that consultancy going. It is a huge amount of money to spend on one consultant, on one project. What confidence did you have in their advice? You look at it and think: "What on earth was going on to pay PA Consulting £70 million for a project that as early as 2007"- sorry?

Matthew Hancock: £42 million.

Sir Bob Kerslake : It is £42 million, which is still a large number.

Chair : I have £68.6 million.

Matthew Hancock: That is the total consultancy costs.

Sir Bob Kerslake : Could I just come back on that question, and in answering that question, come back to the point about the timing of ending the contract? We were saying, and I want to keep to this point, that the IT contract did not start until early 2007. The contract was not in trouble from 2004, but from 2007. The second point is that because of the issue of the milestones that I spoke about earlier, if you had terminated the contract in 2008, your potential exposure on the costs with EADS would have been very high indeed, and in my view would have had-

Mr Bacon: The what costs? Sorry, could you just repeat that? I did not hear it.

Sir Bob Kerslake : I am sorry. Let me give you the answer and then you can come back. The potential exposure to costs with EADS, had you cancelled the contract and the project in 2008, would have been very high.

Q75 Matthew Hancock: So the way that you wrote the contract, are you saying that it would have been more expensive to cancel the contract before it failed?

Sir Bob Kerslake : None of us can be certain because we did not do that, but-

Matthew Hancock: But have you learned lessons on how you-

Stephen Barclay: But because there were not milestones in the contract-

Chair : Listen, guys, one at a time.

Q76 Matthew Hancock: Hold on, hold on. Have you learned lessons, in terms of the design of contracts, from that startling piece of evidence you have just given us?

Sir Bob Kerslake : There is an issue about the tightness of milestones early in contracts. What I am saying is that the ability to terminate the contract without exposing large costs was a product of when they had failed and defaulted on milestones. The way the contract was constructed, in order to terminate the contract, you needed to have what was described as a material default on the contract. If you had done it in 2008 you would not have had sufficient grounds, in my view, to terminate that exposure.

Mr Bacon: So it was flawed at the outset.

Stephen Barclay: That was my point.

Chair : No, no, no. I will stop you all because Ian is coming in. Answer the PA Consulting thing and then I will bring Ian in.

Sir Bob Kerslake : This is the second point of your question. What I would say about the consultancy is that the consultants formed part of the team delivering the project. They were not, in that sense, standing back from the project, advising a team delivering. They were a key part of the actual delivery team. In my view, one of the lessons to learn from the project, and it is again highlighted in the NAO Report, is that there was, at least in the early stage of this project, an excessive reliance on external consultants and, in my view, insufficient inhouse capacity to manage the contractor, who in effect formed part of the team that were delivering the project.

Q77 Chair : But actually, Mr Hargreaves, you were running them.

Roger Hargreaves: Yes. When I arrived in the team, at the end of 2008, I felt that we were using too many consultants. Obviously consultants can come and do a very specialist role, where they bring expertise that we do not necessarily have inhouse, or they can perform more generalist roles. I felt we were using consultants in generalist roles where we could instead get people from the fire and rescue service, or from the Civil Service to do those jobs as well.

Q78 Chair : Did you get rid of them?

Roger Hargreaves: Yes.

Q79 Chair : When?

Roger Hargreaves: In a steady programme of removal of consultants from early 2009 onwards.

Q80 Chair : So how much did you spend in 2009 on consultants?

Roger Hargreaves: A 25% reduction in the first year, a 25% reduction in the second year, approaching nearly 50% of consultancy use.

Q81 Chair : Why didn’t you just stop them?

Roger Hargreaves: Because many of them were in key positions with huge amounts of retained knowledge. They had to be removed more gradually, else you would leave a gap in terms of the projects and understanding what was going on. Some of them did highly specialist roles and relied on expertise that is not readily available in Government. However, I achieved a 50% reduction of consultancy use in 18 months, saving £6 million.

Q82 Matthew Hancock: Do you think that it was a mistake to have so many consultants in the first place, before you arrived?

Roger Hargreaves: I think we overrelied on consultants.

Q83 Ian Swales: It is hard to know where to start, because I understand from the Chief Executive of the Association for Project Management that they use this case as a textbook example of how not to do a project. We could talk for days about it, I am sure. I would like to come right back to basics. How many people work in a typical fire control room?

Steve McGuirk: There is not really a typical fire control room. You go from one extreme, the London Fire Brigade, which is probably a complement of about 80 or 100 people-

Sir Ken Knight: More than that.

Steve McGuirk: Down to as small as 20something in a small county council, like Cumbria or Suffolk, for example.

Q84 Ian Swales: 20something?

Steve McGuirk: Yes. I think it is about 24.

Q85 Ian Swales: Across all the shifts? I am told that on a typical shift, my fire service has four people. On Teesside, there is quite a lot of danger around with petrochemical industry and so on. They reckon there are four people. Across the north-east, they reckon there are fewer than 20 at any one time.

Steve McGuirk: Sorry, yes. That would be to give you four.

Q86 Ian Swales: Yes.

Sir Ken Knight: But it is 1,400 in total.

Q87 Ian Swales: Across all the shifts?

Sir Ken Knight: In the north-east of England.

Q88 Ian Swales: So on any day you might find a couple of hundred working, or perhaps 250. In the north-east, I am told there are under 20 working at any point in time, but the control centre was designed for more than 50 people. Why was that? Because they were never asked. As one of the services says in a document that we have here, "The project was often managed in a way which ignored the advice from the fire and rescue services. This led to frustration, suspicion and anger from the fire and rescue services which was counterproductive to successful implementation of the project." Why would County Durham and Darlington fire service be able to make that comment? Why did we end up with a control room in the north-east twice the size that was required?

Sir Bob Kerslake : Do you want me to come in first? Clearly this is from analysing what happened in the project, but my understanding is that one of the things that occurred in that early period of the IT contract-I will emphasise that point-from 2007 onwards was major issues about the way in which EADS were delivering the contract. There were also major issues about the relationship between EADS and the Department. In that situation, the focus of the conversation went on between the Department and EADS-

Q89 Ian Swales: What-

Sir Ken Knight: I will just finish the answer to the question. The services felt excluded from the process and were unclear what was happening whilst that process was going on. That is my understanding.

Q90 Ian Swales: What about the basic question of the size of the building? Didn’t they talk to the fire services to decide how big these places needed to be?

Steve McGuirk: In truth, the short answer is, not a great deal. Somewhere in the project report it talks about things getting out of control, or out of sequence. The reality is that we were asked to be picking furnishings, wallpaper, floor coverings, etc., before we had actually decided any kind of governance arrangements for the control centres. In terms of the sequence of the bits of the project, clearly there were different bits of project teams at the centre who were working to different milestones and the different bits of the project. It was out of sequence. Effectively the Service, or services, were consulted on design and layout, broadly speaking, but the arguments for a common building spec from the centre to a contract that would get value for money was put to the Service rather than inclusive of the service.

Q91 Ian Swales: When we piece together what we have been hearing about what you said about lawyers, Mr McGuirk, what we have just heard about consultants, and what Mr Hargreaves said about property companies, what we have here is a project that was being driven by people who almost had a vested interest in making the project bigger and bigger, and last longer and longer, with the fire service almost excluded from the process. Is that a fair comment?

Steve McGuirk: I could not really comment on the consultants, but I absolutely take the point about vested interests. As to whether the design of this project had the best interests of the fire service at heart, I am sure all the Civil Servants felt they had at the time, but whether there was anybody listening to what the fire service was saying is an entirely different matter. We have very overengineered buildings. These buildings are absolutely magnificent buildings.

Q92 Chair : Why are you not moving in then?

Steve McGuirk: Some are, shortly, possibly.

Chair : Only one, we are told.

Ian Swales: If I can just finish on that point, then, to summarise what you have been saying, this was Civil Service driven, and driven by effectively the interests of many of these people who had heavy engagement in the project. The fire service, as I said earlier, were almost excluded from the process. Is that a fair comment?

Matthew Hancock: Can I just interrupt-

Q93 Ian Swales: It is very important. Can anybody else just comment on that, maybe Sir Ken? It is important to know how we get into this type of a mess.

Steve McGuirk: I would just add that that is certainly a fair comment in the early days of the project. It would be fair to say, as the project moved forward, 2007 was recognised as a trigger date. That was because of the Select Committee hearings in 200506 that then flowed through to further changes, and a much greater engagement of the Service from that point on.

Q94 Ian Swales: But it was too late. For instance, some of the buildings were complete by that point.

Steve McGuirk: Yes, they would be. In terms of the complexity in the engineering of the buildings and the specification, that was designed by the centre on the basis of security advice, from presumably either security consultants or officials and experts in security. The design of the buildings was built with that central concept of security in mind.

David Corner: I was just going to say that the Department has accepted that there was little engagement with the intended users of the regional control centres in agreeing paragraph 3.21 of our Report.

Q95 Chair : Say that again?

David Corner: The first sentence of paragraph 3.21.

Q96 Chair : What does it say?

David Corner: "There was little engagement with the intended users of the regional control centres."

Q97 Matthew Hancock: A very quick one: on this question of overengineering, Sir Ken, you have just stated that there are 1,400 controllers around the country. Is that right?

Sir Ken Knight: Staff.

Q98 Matthew Hancock: Staff. This means that the maximum waste on this project is equivalent to around, according to my calculations, £400,000 per controller. If you think about the morale of controllers, I wonder how they feel at the thought that the Government had wasted £400,000 for each one of them in trying to allow them to talk to each other more easily. Would it not have been better to buy them all mobile phones?

Sir Ken Knight: It was not, in truth, just to allow them to talk to each other; of course, it was to provide an enhanced service for the community, which is an important point that I have covered. It was also to overcome some of the shortcomings that I outlined earlier on. As Mr Swales has mentioned, in some fire controls there are very small numbers, particularly at night. In others there are-

Q99 Matthew Hancock: I would just like you to comment on this calculation, if I am correct in my sums, that it is around £400,000 per controller that has been wasted by this project.

Sir Ken Knight: I am sure if you have done the maths on that and it works out per fire controller then that is what the cost is. I am not sure that that is the equivalent to the cost to the fire and rescue service or the cost to the project itself, because there are a whole range of other parameters in there. I do not think fire controllers would see it like that, actually. They are very pleased, I suspect, if I might say, Chair, that they are now able to have a local solution.

Q100 Matthew Hancock: You mean they are pleased that the project has been canned? They probably just wish it had never been started in the first place.

Q101 Stephen Barclay: They are not using it.

Sir Ken Knight: No, I think generally-and I am not here for the Fire Brigades Union-that the Fire Brigades Union would say that.

Q102 Ian Swales: To look at that another way, we know that fire control rooms work in shifts. I think you said earlier that you did not dispute my figure that at any point there might be about 250 people actually working. We are talking about having failed, but heading towards providing essentially office or control room accommodation, with supporting systems, for 250 people at about £2 million per person. If you actually say this thing could have cost £500 million plus, we are talking about £2 million per person. This is just unbelievably outrageous. You cannot think of any other walk of life where you would be spending that kind of money to sit people down and enable them to do their job in what is effectively a very sophisticated call centre. That is what we are talking about here, isn’t it? It is just stunning.

Steve McGuirk: That is a fair comment. Your comment earlier, Chair, was why people were not using the facilities. They are starting to be used for other activities now. That is clearly one of the debates about the future of the project. CLG made some announcements yesterday, which I have not had time to look into in great detail. Some, I am sure, will be used, but one of the issues is that the lease costs of them will need to be very heavily subsidised in order to make it in the slightest bit attractive for any local fire authority to use them.

Q103 Chair : Sir Bob, just on CLG.

Sir Bob Kerslake : One of them is firmed up in the public domain, which is London. We have a further four where there is good progress, two of which are in the public domain, and one of which is, of course, the north-west, which is Steve’s area, and the other is Durham and Darlington. There are two others where we are still in negotiation. There are four where, at this stage, we are not in a discussion. The likelihood is, in the deal that we are looking at, that the Department will take twothirds of the cost and look for a third to be covered from the services. However, it will be an individual negotiation in each of the fire and rescue services.

Sir Ken Knight: Can I just say, Chair, that that totals 14 fire and rescue services that are currently either confirmed or in negotiation to use the fire control centres.

Q104 Chair : 14?

Sir Ken Knight: About onethird of the fire and rescue services.

Q105 Chair : 14 out of the 46?

Sir Ken Knight: Yes.

Q106 Chair : And we have nine regional centres.

Sir Ken Knight: Either confirmed or-

Q107 Chair : Yes, but just to get this clear, because it makes a difference to the figures of loss, those 14 are negotiating over how many of the nine regional centres?

Sir Ken Knight: One is confirmed.

Q108 Chair : Yes, that is the London one. Out of the eight? All eight? Do you have negotiations going on all of them?

Sir Bob Kerslake : What I was saying was that out of the remaining eight, there are a further four where there is active negotiation. Two of those are in the public domain, that is the north-west and Durham and Darlington taking the north-east.

Q109 Chair : And the remainder?

Sir Bob Kerslake : There are two where we are in negotiation but we have not concluded that and it is not in the public domain, and there are four where, at this stage, we are not in an active discussion.

Chair : Okay. Thank you for that.

Q110 Stephen Barclay: Could I just check, Mr Hargreaves, how many multisite, multimillion pound programmes you have run?

Roger Hargreaves: I came to DCLG from the Cabinet Office, and before that I was in the Treasury. I was involved in several largescale projects of different kinds, policy projects and also delivery projects. So, for example, I ran the Civil Contingencies Act implementation programme, which reformed the way in which local areas handle emergencies right across the country. I was involved in the simplification programme, which was a large programme-

Q111 Stephen Barclay: I have your bio here, and your bio says about working on labour market policy, on education spending, and on the simplification programme for regulation. My question was specific. A common issue with this Committee is people who are very bright but with policy backgrounds in the Civil Service taking on operational roles. What I was trying to clarify is this. We have a programme where north of half a billion pounds has been wasted, and has already gone through three programme directors before yourself, and five senior responsible owners. The Department has a programme that is clearly in trouble. You would have thought that they would hire a pretty hardened programme manager. What I just want to clarify with you is: as a programme director, how many similar programmes to this have you run?

Roger Hargreaves: I have a mixed policy and programme background. I have been involved in some very large value programmes like the simplification programme.

Q112 Stephen Barclay: As programme director? Have you been a programme director on anything before?

Roger Hargreaves: On the simplification programme.

Q113 Stephen Barclay: And that was a multisite-

Roger Hargreaves: It was not multisite. It was a crossGovernment co-ordination programme.

Q114 Stephen Barclay: Was it a policy programme, looking at the policy and getting the policy right?

Roger Hargreaves: No, it is holding Departments to account on delivery.

Q115 Stephen Barclay: Okay. Could I come on, Sir Bob, to your predecessor, Sir Peter Housden, because he was the accounting officer from 2005 until 2010, so for the key period in which this programme went off the rails, and he is now the top Civil Servant in Scotland. How as accounting officer has he been held accountable?

Sir Bob Kerslake: As I understand the convention and the way this works, when there is a change in accounting officer it is the current accounting officer who takes responsibility of appearing in front of this Committee. That is the convention that applies.

Q116 Stephen Barclay: So how does that work in practice? To put it in context, as Mr Hancock referred to earlier, I have got a village fire station in the Fens, a retained station. It cost £60,000 a year to run, and it is in the process of being up for closure because allegedly there isn’t the money to support it. The fire service locally can afford six press officers, but that is a separate issue. Half a billion pounds has been wasted. What I am trying to understand is how the role of the accounting officer has actually worked. Because it seems to me that you are here today, yes, but no one is actually losing their job over half a billion pounds of public money being wasted. Has anyone lost their job as a result of this programme?

Sir Bob Kerslake: No one, as far as I am aware, other than the people who had been working on the project who were no longer required. Clearly a number of people left at that point, but no one has left directly in terms of disciplinary action or failure on the project.

Q117 Stephen Barclay: So there were five senior responsible owners and I understand one has retired. None of those lost their job for poor performance; they all went elsewhere in the Civil Service, did they?

Sir Bob Kerslake: Not as far as I am aware.

Q118 Stephen Barclay: So they are still in the Civil Service?

Sir Bob Kerslake: I do not know whether the individuals are in the Civil Service. I dare say I can find that information out, but I do not personally know about the case.

Roger Hargreaves: I think two have retired and three are still in the Civil Service.

Q119 Stephen Barclay: I was told Shona Dunn is still in post; Peter Betts is now at the Department of Energy and Climate Change; Alun Evans is in the Cabinet Office on secondment to the Institute for Government, probably advising them on how to run programmes; Clive Norris has now retired; and Marie Winkler, I do not know, she was the first SRO.

Roger Hargreaves: She has retired.

Q120 Stephen Barclay: So two have retired. What I am trying to get at is how accountability for the loss of half a billion pounds of public money has been exercised. If it was the private sector, heads would have rolled. It seems no one has lost their job as a result of this programme. Is that correct?

Sir Bob Kerslake: I think it is correct to say that no one has directly lost their job as a result of this programme. How does accountability work? Clearly I have to take responsibility as the current accounting officer. That is the convention of how this works as a system.

I would make two points here though. There have clearly been significant issues and failures in the way this project was delivered. But as I said earlier, at each stage that the project progressed there were independent reviews, and on balance the view was taken as late as April 2010 that the project should proceed. So we cannot say this is a project where someone ploughed on against advice to proceed with it. At each stage it was examined and decisions made.

Matthew Hancock: I just want to make a comment. The concern that we have is that a defence of the project such as that gives the impression that you are not learning the lessons from what is obviously a catastrophic failure.

Chair: Well Stella was actually going on to ask about the future.

Sir Bob Kerslake: Do you want me to answer that or wait for the next question?

Chair: We are on wind-ups, and I know what is going to happen after that.

Stella Creasy: I was interested in your comment at the beginning, Sir Ken, about the faxes, and the fact that this report also says the bit that seemed really important about this project, which was actually the technology and integration so that you could actually not have calls stacking up, has not yet happened. In particular, how do you learn the lessons from this moving forward? You all talk about local solutions; that is great. But you are also talking about trying to get 46 different forces to talk to each other in a way that can be integrated. And what worries me here is how are you going to manage that? How are you actually learning the lessons? Having tried to impose a system that they all rejected, how will you avoid ending up with 46 different solutions where they still will not talk to each other so you can deal with that fax problem?

Sir Bob Kerslake: Shall I start then, and I am happy for Ken to come in on this, because the responsibility for delivering the successor project lies with me.

Q121 Stella Creasy: So you are still going to have a centrally delivered project for the IT component.

Sir Bob Kerslake: No, what we will do here is very different from the way in which FiReControl was progressed. We have essentially set aside £83 million, and we have sought proposals from each of the fire and rescue services about how they would wish to take increasing the efficiency and resilience of their service forward.

What we have done in the way in which we have encouraged those bids to come in, and the invitation to bid actually went-

Q122 Stella Creasy: Sorry, I have a cold, so I really cannot hear you very well.

Sir Bob Kerslake: I beg your pardon. Let me try again. What we have done is effectively invited bids against the £83 million from each of the fire and rescue services. We have allocated notionally £1.8 million per fire and rescue service. But we have also done two other things. Firstly, we have encouraged those bids to come forward through collaboration, so some of them will not come forward from individual fire and rescue services, they will come from a group that have decided to work together. Steve’s is a good example of that in the north-west. Secondly, we have set aside £1.8 million specifically to seek a joint bid on how we strengthen interoperability. So we have set this up as a bottom up-

Q123 Stella Creasy: Just so I am clear, you have got some forces collaborating to bid, presumably pooling the £1.8 million for each of the 46, so this is where you are incentivising the collaboration. And you have a separate piece of work about interoperability?

Sir Bob Kerslake: And that is specifically about how we get absolutely consistent and common standards in the way in which not just the IT works, because we tend to focus on the IT here, but how the actual control centres do their job as well. We have put some money in specifically to promote that as well.

Q124 Stella Creasy: How many bids are you talking about? How much collaboration is going on now?

Sir Ken Knight: Can I, if I might, Sir Bob? First of all it not all as gloomy as you might suggest, but people have been waiting. Fire authorities are very responsible local authorities. They have been upgrading and improving where it is necessary to do so. For example, earlier this year Norfolk and Hertfordshire have started being able to share calls together, and share their responsibilities together. Elsewhere we have seen the fallback arrangements improve.

Q125 Stella Creasy: Does that mean that Norfolk and Hertfordshire will not be getting £1.8 million?

Sir Ken Knight: No, they may well bid for it. The FiReControl Project was actually a third prong of three major projects. It was New Dimension, which someone has already mentioned earlier on, and the FireLink project, which was to bring all fire brigades onto the common radio system called Airwave, which of course is identical to the radio system that the ambulance and police use, so there is interoperability. So one of the major requirements of the consultation of all the fire authorities was to ensure they can put the platform of Airwave in their controls, whether it is in an integrated control or an existing one. I am absolutely convinced that most, if not all, will want to bid to be on the Airwave platform in their controls, and therefore even in the areas that I have just talked about they will want to do that.

Q126 Stella Creasy: So this announcement talks about the technology, about trying to deal with this IT problem that when you tried to impose a national IT strategy, they all said, "Actually this does not work for us, we do not want to work in that way." You are talking about Airwave. You are basically giving £1.8 million to each fire authority to try and improve their technology, but I am trying to understand, how does this deal with the fax problem? As a potential user of fire services, that seems to be the critical issue.

Sir Bob Kerslake: Shall I come back again, and then Ken will come back again if we have missed something. What we are seeking is bids to use the funding. Each of those bids will be evaluated to ensure value for money, and, as I said earlier, we will look to see how much there is collaboration and what we have called buddying between different fire and rescue services. So the money will not be simply handed out, there will be a bidding process, and we will test the proposals for value for money.

Q127 Stella Creasy: What if they do not want to collaborate? If one of the issues here has been that people do not want centralised services because they want to be able to run them, what are you going to do if they do not want to collaborate?

Sir Bob Kerslake: We are not saying they have to collaborate. We are saying it is for individual fire services to look to the opportunities to collaborate, and many are doing so. And if they do collaborate then their potential is to have more money for that control centre.

Q128 Chair: But if they do not, Sir Bob, you are responsible for resilience. So what are you going to do to make sure there is resilience, which is question one.

Sir Bob Kerslake: We will ensure that the outcome of the total funding will deliver us a resilient system across the piece.

Q129 Chair: If they do not co-operate?

Sir Bob Kerslake: They do not have to collaborate to deliver resilience. This is the point I am making. What we are saying is we would encourage collaboration because we think that will increase efficiencies, and it will achieve greater interoperability.

Q130 Stella Creasy: From a money perspective, it does make sense to us, particularly on IT and when you are talking about integration, that there would be benefits to collaboration. But you’re up against the same problem; I am just concerned because what the report is really strong about is that you did not have the ability to get buyin from the various fire services and that really hampered your ability to do this. I am just not clear what you are doing to deal with that issue so that we can be sure that the extra money that is going into the service is not still going to sit there because one fire authority says, "We want Airwave" and the other one says, "We do want to move into this big fancy building and that means we want a particular type of technology."

Sir Bob Kerslake: Let me just come back on it. What I would say is that the different fire and rescue services have ended up in different places during this period of FiReControl. Some have invested funding already to improve their services on fire control, but actually want to tackle a different problem in terms of the resilience of their system, which is how, as Sir Ken has said, FireLink works.

Q131 Stella Creasy: Sorry?

Sir Bob Kerslake: FireLink, the mobile system. Some of them want to invest in that. We have not said there is a standard solution that everybody must conform to. We have said come forward with where you need to make investment to deliver the improvement in your resilience and capability, depending on where you are, what you have invested in and what your plans are.

Q132 Stella Creasy: But that means you have different measures of what real improvement might be, don’t you? That means in some authorities it will be dealing with the pile of faxes, in others it will be who is on which Airwave system, and in a third one it might be, "We have this big new fancy building and we have to try and get it to work."

Steve McGuirk: I think it is important to be clear on some operational points here. There is a lot of confusion about four different things here. Airwave is radio technology, the kit on the fire engines, it is how you mobilise the fire engines, and every fire authority is already on that system now, here, today. It is the same system as the police and the ambulance, so in theory we can all talk to each other for the first time ever, which is very good news, and that would certainly be one of the benefits of this project. The £1.8 million is for upgrades of command and control systems for people that take the 999 calls and then mobilise those fire appliances, a separate thing to FireLink and the radio scheme.

Q133 Stella Creasy: If that local authority wants Airwave it cannot spend the £1.8 million on it.

Steve McGuirk: They are separate.

Sir Ken Knight: I mentioned Airwave because it is the fire control part where Airwave concludes. It puts the data transmission in between fire engines and fire control to create resilience.

Q134 Chair: This is going all round the houses. I will tell you what the conclusion will be from our Committee. The conclusion from the Committee will be that responsibility for resilience rests with the Department, but the Department at the moment is planning to encourage local authorities to invest to seek the resilience. If they don’t it is unclear with whom the responsibility lies. That will be our conclusion. If I have got it wrong tell me now.

Sir Bob Kerslake: I think it does not give the full answer here. I would make two points. Firstly, the responsibility for running the overall programme lies with the Department. We will have a senior responsible officer and we will have a programme team, and jointly with local government and the fire and rescue service we will create a programme board so we take this forward together. But the responsibility for ensuring that the fire and rescue service has a resilient system that is capable of carrying out the responsibility of the service lies with each individual fire and rescue service.

Q135 Chair: So there is no responsibility with the Department?

Sir Bob Kerslake: There is a responsibility for the Department ensuring that those services have the investment and the encouragement to do that.

Q136 Chair: One final question on this. You put out a statement yesterday and the day before, very appropriate timing. You have said you will announce the results of the bids by November. In the middle of all this we have August, so in effect you have given yourselves about six weeks or a couple of months to both get the bids in and assess them. Aren’t you simply going to repeat the mistakes and disasters of this time round-of rushing at something-with lesser money so we will be wasting it?

Sir Bob Kerslake: I do not think so. I would make two points. Firstly, what we announced yesterday was actually the consequence of a consultation we started when we terminated the project. We were very clear when we terminated we needed to immediately start a consultation on where next, and we got very strong and consistent, positive feedback from the fire and rescue services that the right way forward was to allow them to work together to develop solutions on resilience and capability.

Q137 Chair: You have not answered the question.

Sir Bob Kerslake: It is an important point to make. I am saying that services have not had just from yesterday to think about where they would use funding. What yesterday did was to confirm the results of the consultation.

Q138 Chair: But you are not dealing with my point, which is that an announcement in November with August in the middle means you are rushing it, and we are going to end up with a dreadful mess.

Sir Bob Kerslake: My second point is I do not think this is rushing it because services have had a number of months to think through how they would move forward. And secondly, I think the services will have right the way through to November to develop the bids. We will not make final decisions on those bids until early into the following year. There is plenty of opportunity to have further dialogue with those services.

Q139 Chair: So I have misread it in thinking you are announcing the results in November?

Roger Hargreaves: No, we are closing bids.

Sir Bob Kerslake: It is closure of the bids in November. The announcement will not be made until the following year.

Q140 Chair: And you, as accounting officer-as you have just arrived you might be likely to be there if all goes wrong-are confident that this time round you will get value for money and a resilience across most of the system.

Steve McGuirk: Chair-

Sir Bob Kerslake: Can I just deal with that question, Steve? The short answer to that is yes.

Steve McGuirk: I really need to make a very important point, otherwise I would be doing my colleagues a great disservice about this question of resilience, because it is bandied around as a liberal term that everybody understands. To clarify the point that you were saying was going to be the Committee’s conclusion, national resilience, as far as each fire and rescue service is concerned, is a matter for Government. There is nothing in the Fire and Rescue Services Act that requires me as chief fire officer, or my fire authority, to secure national resilience.

Q141 Chair: That is not what Sir Bob just told us.

Steve McGuirk: Which is why I think it is a really important point to make. I am facing a 12.5% cut in budget in the next two years, and at least the same again. I do not think I have got responsibility for national resilience unless I am financially incentivised to do so.

Q142 Chair: Sir Bob?

Sir Bob Kerslake: What I said was that the individual services have responsibility for ensuring that they have the capability to deal with incidents in their area.

Q143 Chair: If there is a disaster, another flood or a train crash or, God forbid-

Stella Creasy: Or a terrorism act.

Chair: -a terrorism act, who is accountable?

Sir Ken Knight: It is the fire authority who has both a statutory responsibility, and in some cases, the power.

Q144 Chair: So you do have responsibility, Mr McGuirk.

Sir Ken Knight: Chair, if I can help you, in the case of Buncefield, which was a very large fire in Hertfordshire, it was Hertfordshire county council that took that responsibility, and had resources come from other parts of the country in a resilient way.

Q145 Chair: And if there is a terrorist bomb, who is responsible?

Sir Ken Knight: I was the London Fire Commissioner in 2005, for the 7/7 bombings, where the London Fire and Emergency Planning Authority took its responsibility for fire fighting and rescue.

Q146 Chair: So you may hate it, Mr McGuirk, but you are responsible.

Steve McGuirk: I have been clear about this all along. If anything happens on my patch, I have responsibility, with some exceptions. Flooding isn’t one of those, by the way, that I have responsibility for, although it is commonly bandied around. But if something happens it is my responsibility to make arrangements to deal with the 999 calls within reasonable boundaries, and it is my responsibility to mobilise as many appliances as I think I need. Therefore part of my professional judgment is to advise my fire authority how they do that in my area. If it is a terrorist bomb or a cat up a tree, it is mine. It is not my responsibility to sort out my neighbouring authority; that is for the Chief-he is my twin brother as it happens, but it is his responsibility.

Q147 Stephen Barclay: The Department is spending half a billion pounds on something for which you had no obligation: to use the regional powers. It is pretty bonkers, isn’t it? Because exactly as you said, your authority has an obligation to your area, not to the neighbouring area.

Mr Steve McGuirk: I thought the Committee might ask why chief fire officers went along with it, but we did not actually go along with it. There is something about gift horse in the mouth, isn’t there?

Matthew Hancock: That is why we didn’t ask.

Steve McGuirk: If someone is offering to pay half a million pounds for a newer system you would be foolish to say, "Please don’t".

Q148 Jackie Doyle-Price: We are nicely getting into the operational impacts of all this now, so I have got some questions really for you, Mr McGuirk, just following on from that. Paragraph 4.8 of the Report details a survey that the NAO did with the regional fire services about the impact of this, and it says that 17 of the 27 who responded had said that it had had a significant negative operational impact on the service, and a further 23 said it had had a significant financial impact. My question to you is, would your service have been better off had this project never been started?

Steve McGuirk: It is very much a hypothetical question, isn’t it? I suppose the short answer is probably no, it wouldn’t, because it would be wrong to portray the project as a disaster. A financial disaster, sure, but actually as this thing has gone through various gateways, the operational benefits have been confirmed each time, and those benefits are, as Sir Ken identified, being able to deal with incidents on scales that we have not previously foreseen due to terrorism, climate change and so on. That technology is still there and it is developed to be used. If the rooms themselves are available to be used at the right cost they are super, state of the art facilities, and so on. All of that is there for fire authorities to take advantage of, so in the sense whether the project has been worth while doing, from that perspective it has. Has it been well run and well managed? I think the Report covers that in far more detail than I could.

Q149 Jackie Doyle-Price: Is there a financial impact on your Service?

Steve McGuirk: Yes, there is. I have not had a chance to read the Report in detail; I did touch on it briefly with Sir Bob, and I would give credit to the Department in the last couple of years because I think the Report does say things have been very good, and that is true. But the idea of just throwing things out there and hoping that people will collaborate and encourage because we will all see it is the right thing to do is optimistic. We are facing serious financial difficulties, as some members have identified, in every fire authority. I am not sure exactly how you incentivise people to do it.

We have also not factored in the costs of individual fire authorities. That £400 million odd does not include a penny of my time or my colleagues’ time or anybody else’s time. Certainly our travelling expenses, all those things, were paid for under the new burdens principle, but we certainly did not receive anything for my time when I used to trail down to London once a month for a two-day meeting and a project board and so on.

Q150 Stephen Barclay: Are your costs not borne centrally?

Steve McGuirk: No-

Q151 Stephen Barclay: Because when I had a dispute with my fire service, they used the Audit Commission definition for accounts, which is why Cambridgeshire claimed to be the most efficient per head in the country. And that excluded senior fire officer time, fire authority time and pensions liability, which was different to the CIPFA definition.

Steve McGuirk: Is that the FiReControl project or generally?

Q152 Stephen Barclay: Generally.

Steve McGuirk: I would go back and ask for a correction on that. It is certainly not the way my time is paid for.

Q153 Stephen Barclay: But the CIPFA is the whole cost, and the Chief Fire Officer of Cambridgeshire was excluding his costs because they are borne centrally. So you are saying that that is incorrect then?

Steve McGuirk: I would go and check that again if I was your good self.

Roger Hargreaves: It is certainly the case that over the course of the FiReControl project we paid around £88 million to fire authorities to cover the costs of staff and other implementation costs.

Q154 Stephen Barclay: So you paid centrally.

Steve McGuirk: That is absolutely true, but that did not go anywhere near the actual time that staff were committing to this project.

Q155 Mr Bacon: Mr McGuirk, when you said "I’m not quite sure how you would incentivise people to co-operate", surely the obvious answer to that is to offer something that has such manifest benefits that the case for co-operation and collaboration is very, very strong. Is that not the way to do it?

Steve McGuirk: In some cases, yes; in some cases, no. The financial settlement this year has thrown up some unusual outcomes. Six fire authorities will get an increase in grant this year, whereas Metropolitan fire authorities are facing a 12.5% cut in grant. If you are getting an increase in grant, do I or do I not collaborate? At the time of the first announcement of delay, 2008, I was the Chief Fire Officer of Cheshire Fire and Rescue Service, and I thought the project was doomed to failure. So I went to my fire authority and we replaced the command and control system because ours was falling over at that time. It cost around half a million pounds and we were live by the following October. It took less than a year to get it live, and that is now up and running perfectly satisfactorily, and I am sure Cheshire will form part of the north-west discussion as we go forward. So £1.8 million looks like a lot of money, but it depends how many hoops you have to jump through to get it.

The other point I would add is that the Department may well have a view, and it may be absolutely intent on incentivising it, but I am not so sure that all fire authorities will see it that way. If I were in a different position, I might argue, "Hold on, I have been without a system now, or my system has fallen over, for the last five or six years whilst I have been waiting for this project to come to fruition. That is what you would say, Sir Bob, but I think I have got a right to that £1.8 million because I have waited so long anyway," and I might take a different view in a tight financial climate.

Roger Hargreaves: In fairness, we have continued to fund fire authorities for the provision of their control room services; it is one of the component parts that drive the amount we give fire authorities.

Q156 Chair: This is a very odd session for me because we are getting slightly conflicting evidence from the Permanent Secretary and from Steve McGuirk on the ground. The reason one has concerns about that is that clearly resilience matters. Were there, God forbid, to be a bomb somewhere in the UK, we do not want to hear afterwards that it was because fire authority A-

Stella Creasy: It was sitting on a fax.

Chair: -decided not to take advantage of £1.8 million, or did not spend it on creating a system that allowed the sort of interoperability or co-operation that would mean that we, the UK, wherever you live, wherever it happens to be has the best possible response to it.

Sir Bob Kerslake: I do not think you are hearing different points. I think Steve is saying, quite rightly, and I am saying that the responsibility for being sure that you have the capability to deal with incidents in your area lies with the Chief Fire Officer. There is no argument or ambiguity about that. The responsibility for ensuring that we have a national approach to dealing with resilience that is coherent and effective lies with the Department. What we are trying to do here in the way we move forward is learn the lessons from FiReControl, which as everybody has said was excessively topdown or did not sufficiently engage the fire services, and now look at a model that encourages a bottom-up approach.

Q157 Chair: I think we understand that, Sir Bob. I am sorry to pursue it, but from the evidence we have had from Mr McGuirk, that will work with some authorities and they will respond positively, but it will not work with all. And in those instances where it does not work the bucks has got to stop.

Sir Bob Kerslake: No, there are two points I want to make. First of all, we are out for the bids now. I think we can form a judgment whether or not people have responded to the request for proposals when we have them in. My personal view and the evidence we have from our discussion with fire and rescue authorities is that they are up for change, and I do not think it is simply driven by the level of their financial saving. All fire and rescue authorities should be looking for opportunities for efficiency and collaboration. I think that has made that point.

The second point is that alongside the process of seeking bids for funding, we are also reviewing the fire framework, which is the fundamental document that governs the relationship with fire and rescue authorities. And as part of that I think we will pick up these issues and responsibilities.

Q158 Stella Creasy: So if they do not do what you consider to be resilience, and right now, you cannot force them to do that because they have local resilience, so you will change the rules to make them do it?

Sir Ken Knight: I do not think you should be afeard, Chair. I think that resilience goes on day to day. We saw it recently in the Berkshire fires: large gorse fires, where fire brigades attended from all over parts of the south-east. There is a requirement under the 2004 Act to do so. What Sir Bob is talking about is just setting out what the expectation is of fire and rescue services to reinforce each other at the time of a major incident.

Q159 Chair: But I have to say to you, if that resilience were there, why the hell did we start in 2004 on this whole ruddy project? And why actually did you bother to make yesterday’s announcement?

Sir Ken Knight: Because, if I might say, Chair, we have just confused the resilience on the ground with attendance and over the board support-we seem to have drifted into major incidents-and call handling, which is what the FiReControl project was about. The resilience of call handing and receiving of calls at the front end is vital for the service to respond after that.

Q160 Jackie Doyle-Price: Thank you for your frank response to my question, Mr McGuirk, I think that has opened up an interesting debate.

Steve McGuirk: I am simply injecting a note of caution. It is great and I support the ideas, but the practical arrangements, how this is going to work, really need some rigour behind them.

Q161 Jackie Doyle-Price: I think you are illustrating beautifully the difference between operations and policy, which is why we are where we are. This is the final question for the Department. Given the amount of money that we have got here, and we have still got a question mark over the ultimate cost of the failure of this project, can you give an assurance to this Committee today that the ongoing costs will not impact the operational effectiveness of services on the ground?

Sir Bob Kerslake: I do not believe it will do so I think it is just worth reinforcing that we have reasonable confidence that this will be enough to do what is required across the fire and rescue services. We need to see the proposals coming in from them, and it is absolutely right: until we get them in, we cannot be certain that they will have worked through these issues in detail, but I expect they will do so. We believe we have put enough money into this. The key point I would make is we are not imposing and saying, "We know what is right for your fire and rescue service", we are looking for them to take the lead in telling us what they think the right solutions are. And in a sense that is learning very positively the lesson about what went wrong last time.

Q162 Jackie Doyle-Price: Would you agree with that?

Steve McGuirk: I am losing 12.5% out of my budget, and it is rather a moot point which line has been sliced out of that. Certainly, I entirely recognise Sir Bob’s commitment to not seeing this as an added burden. But this is but one small element of a much bigger issue that fire and rescue services are facing at the moment.

Amyas Morse: I just want to ask, from your wider experience of Government, are the factors that led to the failure of this project particularly unique in your judgment, or are they just an extreme example?

Sir Bob Kerslake: I have not worked on a lot of projects across Whitehall because obviously I am relatively new to it, so I cannot say for certain. I think they are common to the very large-scale projects, and I think this is an important point to make here. This was a very large, very complex project that was being delivered over a long period of time. I think there is evidence that the Government have struggled to deliver that kind of project. You will see common patterns that we have seen here: over-ambition at the beginning, under-assessment of risks, change in personnel and over-reliance on contractors. I think you can see many of those common patterns here in terms of projects going forward in the past.

My personal view is-and I think there is some evidence that this is part of the thinking of the new IT strategy from the Cabinet Office-that we should look very carefully at any project that involves that scale of investment cost. You are much more likely to get it right with smaller, organised and bottom-up type networks and IT projects in my personal view. So there are some commonalities, and I think they are about big, long range, complicated projects. That is what I think the issues are.

Austin Mitchell: I want to move back from this uncertain future to history. As I read it, this was the time when the Government were moving towards regional government, pushed by John Prescott. Tony Blair didn’t want to hand sufficient powers to regions to make them worth voting for or having, so the whole regional government movement floundered. But it was because there was a belief that we would have regional governments that the Department at that time felt that it a) could impose this, and it would be given the powers to impose collaboration, and b) should move to regional centres without consulting the fire service itself. Is that an accurate scenario? The interesting thing is why it did not consult and involve the local authorities.

Sir Bob Kerslake: I would make two points about this. First of all, there was some consultation, but we would have to put our hands up and say it was inadequate. In terms of why the project was conceived, I think it is important to say that the project was conceived out of concerns at the time, bearing in mind what was going on at that time-9/11 and so on-that led people to feel we needed a higher level of resilience. That was what drove the desire to invest money into this area.

Q163 Austin Mitchell: But that was part of the regional government movement.

Sir Bob Kerslake: The second point I was going to make was the solution that was identified to deliver it absolutely aligned with the view about regional models and regional government. So whether there was a need to do a project came from the issue of resilience and potential capability to deal with major incidents. How it was going to be dealt with through regional centres that would in effect take the staff out of the existing centres did have a linkage to ambitions around regional models.

Q164 Austin Mitchell: But in November 2003 the Fire Service Inspectorate report told the Department there was an unwillingness among fire brigades to collaborate. Up in civilisation in Manchester, Mr McGuirk, were you consulted? What did you say about these proposals?

Steve McGuirk: I think both points are right. Sir Bob’s point is absolutely true, resilience was a central part of the rationale.

Q165 Austin Mitchell: But the restructuring?

Steve McGuirk: You are also right, it was in the Regional Government White Paper; it was absolutely clear the first statutory function of the new regional assemblies was going to be fire. And the actual White Paper made it very explicit. It is not covert or underlying, it is absolutely explicit-that is what it was. So I think both those points are true.

In terms of the fire services collaboration, I think that was a fair criticism. Regarding fire service sovereignty, like many other organisations, local authorities, police services, historically we have not been good at collaborating. We have been buying the same things 20 times over. I have to say that world has changed dramatically. In the north-west now we buy everything together, we have single contracts for equipment, appliances and so on. So I think it was a fair comment at the time that fire and rescue services, like many other organisations, were not good at collaboration, and the central view of it was there needs to be a greater level of push rather than pull.

Q166 Austin Mitchell: We had a stoppage in Grimsby three years ago. I was immersed in the fire service at that time, and the lads were dreading this kind of structure. So what were you saying about it to central Government?

Steve McGuirk: Interestingly, at the time Sir Bob and I worked together. Bob was the Chief Executive of Sheffield and I was doing an assignment in Sheffield at the time as the Chief Fire Officer. I do remember having a conversation where we both expressed some trepidation about the idea. But as a Chief Fire Officer, we were writing to Government. The formal machinery that was taken up: there are about 1,000 minutes of meetings that I can certainly get copies of. I think we would bury the room in paper if we wanted to do that. There is no shortage of evidence. I gave evidence to the Select Committee in 2006.

Which professional would not support the idea of the best part of a billion and a half pounds being invested in their Service, when all that you have to do is work with the Government and take forward a new and progressive policy? So of course we would work with the Government to do that, despite having all those reservations, and they are well documented in various bits of oral and written evidence. I think Sir Bob’s earlier point is right. Had the technology actually worked as late as April 2010, the view at the time was it was still worth proceeding. So an awful lot of scrutiny and analysis was behind both support in principle, but with real reservations.

Sir Bob Kerslake: Can I just add one point to that before you go on? One of the reasons why I have confidence about going forward is the point that Steve makes. I think the world is very different in the fire and rescue service in the way in which they work together and the willingness to collaborate. If the project had any positive benefit, in those terms, it did actually encourage some level of collaboration. Notwithstanding that there will have to be efficiency savings in the fire service, like every other public service, there is capability to do this and do it well.

Chair: An expensive way of encouraging collaboration.

Q167 Stephen Barclay: I just note that the original reports from the consultants in April 2000 recommended 21 sub-regional centres, so we seem to have gone through this bizarre thing of the original board recommending that, John Prescott politically driving through that it should be regional, and now we will probably end up with collaboration there.

Just on your other point in terms of procurement, we did have an NAO Report that highlighted that Firebuy, which was the procurement set-up centrally, cost more to set up than it actually saved. So the incompetence of this is not unique to regional control centres.

Could I just turn to Sir Ken? Firstly, can I just clarify in terms of your salary, Sir Ken, what you are actually paid?

Sir Ken Knight: Am I able to disclose that?

Sir Bob Kerslake: It is your choice, Ken.

Sir Ken Knight: Yes, I can.

Q168 Stephen Barclay: It is in the public domain.

Sir Ken Knight: It is in the region of £100,000.

Q169 Stephen Barclay: And is that full time or are you part time there?

Sir Ken Knight: No, I work flexible hours. Sometimes it does not feel as though I am on flexible hours because I am there five days a week, but my contract allows me to work three days a week, should I wish to.

Q170 Stephen Barclay: So contractually that is £100,000 for three days a week.

Sir Ken Knight: Yes.

Q171 Stephen Barclay: That is an interesting distinction. In terms of your responsibility for this project, because you have been in place since October 2007, advising Ministers and senior officials on policy matters such as this, what do you see as your accountability for this project?

Sir Ken Knight: It is important to say that the senior user was from the Service, of course: a principal officer nominated by the Chief Fire Officers Association from the Service itself. So the senior user is a principal officer.

My role continues to be to provide challenge and advice at various stages, including this. I am pleased to say I was able to. My role was not at all, and should not have been, the contractual arrangements or the negotiation of contracts. For example, at a key stage I made recommendations of what FiReControl should achieve in operational outcomes after the widespread flooding that I have mentioned, about interoperability, shedding calls and buddying arrangements. And later on in the project I chaired a group to ensure that the existing instant command protocols were not compromised by the FiReControl project. I chaired that with Chief Fire Officers and inputted that into the FiReControl project.

Q172 Stephen Barclay: I have got the old governance structure in place here, and as you can see it is a pretty complex arrangement with programme board, project board, exec management board, delivery management group, RCCDs, financial working group, project exec, etc. It is a pretty complex governance, so at what point did you point out your concerns with the governance structure?

Sir Ken Knight: In the governance of the project?

Q173 Stephen Barclay: This project, yes. You were advising on policy. The Report makes clear that there were serious failures in the governance structure. You were advising the Government since 2007. At what point did you say you had serious concerns with the governance?

Sir Ken Knight: I was appointed in November 2007, and my role continues to be advising on the policy relating to fire: fire safety matters, operational fire matters and widespread emergencies. It does not relate to advice on running the Department or policy in the Department. I do not deny my responsibility of providing challenge and advice at all levels, and I continue to do that. I have done that during this project, but it is on the operational outcomes and expectations, and I am on record as saying-and I think Steve McGuirk and Chief Fire Officer colleagues I used to work with have said the same thing-had this worked we would have welcomed the outcome of the performance of FiReControl in this way.

Q174 Stephen Barclay: What I am trying to get at, Sir Ken, is the date when the flag was raised on this. As late as 2009 the go-ahead is given for the IT system to continue even though there are numerous concerns. There have been various issues. Matt referred earlier to the eight extensions, the eight times when we could have said stop and we did not. We have a governance structure that is flawed, forces with different operational needs, and as someone who has been in the fire service for a long time I would have thought that was the essence of what your role is, pointing out these practical things.

Sir Ken Knight: Absolutely.

Q175 Stephen Barclay: I just do not have a handle on the date when you were expressing these concerns to Ministers.

Sir Ken Knight: One of my concerns was that those fire and rescue services that were by now looking as though they may have obsolete fire control systems and waiting for FiReControl to come on board would find themselves disadvantaged in operational terms. Certainly I was involved at that stage, particularly in ensuring assessment of those Services that came forward and said "We can’t wait any longer, and we need to bid for additional resources or put FiReControl systems in place." So my interest particularly was ensuring that the Service delivered today, and continued through the project, was not reduced by virtue of project delay, and I am confident that it has not been.

Q176 Stephen Barclay: Confident there has not been a project delay?

Sir Ken Knight: Confident it has not been reduced, because there have been several upgrades in fire and rescue services, and actually some have needed to replace their systems, for example, West Midlands. So I am confident that we maintained that service even though there were long delays in the project that caused some of those fire and rescue services some difficulty during the process. So that continuing advice on operational preparedness and the day-to-day operations continues to be at the core of the advice I give.

Q177 Ian Swales: I find the eyewatering lengths of time on the projects that we hear about round this table just amazing. This one was given birth in December 2003, to be completed by October 2009, which is almost exactly the length of the Second World War. It is mind-boggling that we would even go into that. I just wonder if it is to do with expertise.

We visited the aircraft carrier building facilities in Scotland last Thursday, and we saw a logistics and warehousing company-experts-doing the logistics and warehousing. I just wonder in this whole project what sort of expertise have you been calling upon, because we need to learn for the future. For instance, has there been call centre expertise brought in? Has there been expertise from other people who do emergency services? Surely this project could have been done in a fraction of the time that was allowed.

Sir Bob Kerslake: If I can ask Roger to deal with the technical expertise, I will come back on the programme and project management, if I can.

Roger Hargreaves: We used a mixture of experienced civil servants and contractors and consultants, plus experts in the fire and rescue service, to provide that understanding of what FRSs did in their current systems and what was done in the private sector, for example, in relation to call handling in contact centres or looking at construction projects, changes to the business process and so on.

Q178 Ian Swales: Specifically on the call handling and call centres, can you say more about what expertise you actually brought in and how it was used?

Roger Hargreaves: We used consultants who had experience of helping private companies develop their call handling arrangements, the kind of models they used, the kind of rota and staffing arrangements they used, how efficiencies could be driven out and the standard calculations used by the private sector for achieving that.

Q179 Ian Swales: I recognise the sophistication of what you were trying to do, but people set up call centres in months. They do not take six years to do it.

Roger Hargreaves: In fairness, the interaction between a fire service control room operator and a member of the public and a call centre operator and a member of the public is a higher degree of complexity.

Q180 Chair: Why?

Ian Swales: What is different?

Chair: You ring in.

Roger Hargreaves: Yes, but they are immediately mobilising often quite complex resources and dealing with people in operational roles.

Chair: But what is the difference? So their response has to be different.

Q181 Ian Swales: There are two things to do: interact with the public, find out what the public want; and then there is call up some resource, whatever that is. These kind of things are going on all the time.

Roger Hargreaves: It is a very sophisticated resource and has to be done immediately. Steve or Ken might be better placed to explain exactly why.

Chair: You can ring the gas board about a leak, and that is urgent.

Ian Swales: My reason for asking these questions is because we all need to learn.

Q182 Mr Bacon: You can ring the parish council about the fact that a tree has fallen down and something is done pretty quickly. It is a specious argument. We don’t really believe your argument, to be honest. At least not one that says "and therefore it needs to take the length of the Second World War", which is essentially what you are saying.

Roger Hargreaves: I think you are pulling two things together. The complexity of an individual role of control room operator does not necessarily translate into the length of the project delivering your control room system. The control room system is not just about that control room operator’s individual transaction, it is about developing a national system.

Q183 Ian Swales: We are talking about public spending, and I think the whole issue is about gold plating. To what extent was this built upwards from the simplest approach you could possibly have in terms of buildings and systems, with the sophistication that was needed built on top? Or to what extent was it a top-down, very gold plated process, including the use of a Canadian defence contractor, I think, for the IT system? It seems to have been completely out of proportion with the actual requirement.

Sir Bob Kerslake: It is right to say that this was a high ambition, high spec project. I think the view was that actually you could deliver the IT through essentially buying a standardised product off the shelf. In reality it did not turn out like that at all, and that is a key point to recognise.

Q184 Ian Swales: Did the IT company have experience of delivering emergency service IT to another emergency service?

Roger Hargreaves: They had subcontractors who did. I don’t know if you’re familiar with EADS, the company who were the prime contractor, but they are a large defence, security aerospace contractor-the world’s second largest. So they have experience.

Q185 Ian Swales: A defence and aerospace contractor?

Roger Hargreaves: Yes, so they have experience of doing a whole range of different things. Something that did come to concern us, and I think this is an important learning point, is that they did not have experience of implementing a control room system in the UK with UK emergency services.

Q186 Mr Bacon: So it is a failure of purchasing. Because there were people who had done control systems in the UK, weren’t there?

Roger Hargreaves: Not on this scale.

Q187 Mr Bacon: That wasn’t my question. Were there people who had done control systems and installed them in the UK, yes or no?

Roger Hargreaves: Obviously yes.

Q188 Mr Bacon: So it was a failure of procurement that you ended up hiring somebody who had never done it.

Roger Hargreaves: But not on this scale.

Q189 Mr Bacon: Yes, but they had not done it on this scale. They had not done it at all. Your argument is that it was better to have somebody who had not done it at all than to have somebody who had not done it on this-

Roger Hargreaves: The subcontractors had done.

Q190 Mr Bacon: Why not talk directly to the subcontractors? Why not talk to the people who know what they are doing?

Q191 Stephen Barclay: The Report speaks to this, it actually says, "The Department failed to ensure that EADS followed the approach that it had been contracted to follow". So you did not even get the contractor to follow what you had agreed.

Sir Bob Kerslake: It is quite important to say they were the prime contractor. The key subcontractors did have experience of doing systems like this. I think the point that is being raised by Roger is, in learning the lessons from this, whether you would do a project in this way with a prime contractor.

I really do want to pick up Mr Swales’s point about the timescale here. For me, one of the really important lessons to learn from this was the separation of the physical buildings from the IT. If I was to do this, personally I would look at a turnkey project where you would hold one contractor-if you were going to for a prime contractor-for both, and there is no question about it, the length of time was a product of the buildings going ahead first and then the contract for the IT coming along later.

Steve McGuirk: Could I shed some light, Sir Bob? There is an essential point that is being missed. If all you are putting in is a call centre, and you are rolling out the same call centre 25 times because everybody is following the same script, it will go in like that. At the start of the project the contractors and everybody assumed it would not be complicated. They were a big defence contractor, and this was only a little old fire service: "How hard can it be?"

But when you have got 46 different fire services and they have all got very different ways of doing what might well be the same thing, you have to make them all do the same thing in the same way to systematise it, because if you keep saying to them, "You can carry on doing it 46 different ways", you cannot write computer logic, and computers are logical.

Q192 Ian Swales: That is a key area. What was the assumption when the project started? Which of those options was the plan? Was it that the 46 fire services would conform to the same way of operating, or was it that you would deliver a service that allowed 46 different ways of operating?

Sir Bob Kerslake: It was even more fundamental than that. Not only would it be the same system, but the staff operating the centres would be differently employed through the regional centres, so this was a complete change. One of the points that was made in the wider lessons point that Amyas raised is that we talk about these as IT projects. They are not, they are change projects, and that aspect was under-represented in the thinking as well.

Q193 Ian Swales: Absolutely. I was about to make that point. IBM have analysed that 90% of this type of project fail because of people issues. So we have got to the bottom of one of the key points here, which is that we have not dealt with the people aspects of this, which is why we are where we are today, as Miss Creasy said, still basically looking at the same position we were in seven or eight years ago in terms of the delivery of services, with no progress.

Roger Hargreaves: It is fair to say that we did recognise during the course of the project that insufficient attention was being paid to those kinds of people and convergence issues, helping people to understand new ways of working and new business processes.

Q194 Chair: I just want to ask our Treasury representative, why didn’t Treasury stop this?

Marius Gallaher: At the time I believe the Treasury scrutinised the business case, but perhaps, with hindsight, inadequately.

Q195 Mr Bacon: You would not get past Mr Pitchford in the Cabinet Office with this mess, would you?

Austin Mitchell: You had all sorts of gateways and checks, and it has wasted £469 million.

Marius Gallaher: As far as I am aware, it went through the gateway process.

Q196 Chair: No, it didn’t. It got a red on the gateway process.

Marius Gallaher: At the start.

Sir Bob Kerslake: This project did not fail for lack of reviews along the way.

Mr Bacon: This is paragraph 2.7, "Neither the project plan nor the business case were finalised before the project’s approval. A Gateway Review by the Office of Government Commerce in April 2004 after the project had been approved found that the ‘extraordinarily fast pace’ of the project was introducing new risks to the delivery…and escalating those already identified."

Sir Bob Kerslake: Absolutely right. This project started badly without the buyin, all the things you have just said, but if you look at the subsequent Gateway Reviews, they gave a different-

Q197 Chair: Did it get a green in 2010?

Sir Bob Kerslake: I think it got a green on one part of it. It got an amber on part of it.

Q198 Matthew Hancock: All of this gives the impression, especially early on, that the project was being driven by a desire to get it started and regionalised before there was anybody having a grip over the project. It gives the impression of something that was being driven forward despite the fact that the project actually was not put in place. And the fact that the goahead was given before there was a business plan implies that whoever was giving the go-ahead did not care what the business plan looked like, they just wanted the project to happen come hell or high water.

Sir Bob Kerslake: I think the judgment here is that this project did not get enough rigour at the first stage of going. We now have an investment sub-committee that basically will not say yes to any project unless those things are in place.

Q199 Matthew Hancock: Why did that happen?

Sir Bob Kerslake: Because of the ambition to get on with the project, the momentum that had built up behind it.

Q200 Mr Bacon: But that is what accounting officers are for.

Chair: We have been there.

Mr Bacon: I know we have, but essentially you had this out of control bull in a china shop going round telling you what to do, didn’t you? And instead of standing up to him and saying, "I am sorry, I cannot defend this on value for money grounds," everyone caved in. That is what happened.

Q201 Chair: I deliberately asked right at the beginning of this whether Sir Bob said he was accounting officer, and he said it was the officials that signed it off.

Sir Bob Kerslake: It would be a convenient copout to say this was just down to Ministers’ enthusiasm.

Chair: Yes, quite.

Sir Bob Kerslake: That would not be right, officials recommended it.

Chair: They did. Now very quickly, Stephen, and then you are coming in on your last one, but I want to draw it to a close, please.

Q202 Stephen Barclay: With the Chair’s indulgence, I just want to take the opportunity of Sir Ken being here. I was looking at the Chief Fire Officers Association Annual Accounts, and in its charitable activities for 2009-10 it seems to have over £1 million for what it defines as providing coherent leadership to provide professional advice in terms of implementing policy and communicating views and priorities to inform key decision makers, which by any other definition appears to be lobbying Government of various kinds. I wonder whether you can give us a note on whether the Chief Fire Officers Association does pay in essence for Government lobbying, and whether you have had any comment, given that most of its budget comes from providing training courses. So it seems to me what potentially is happening is county forces pay for training, a bit of profit is made on the training, and then that is used to lobby Government. I just wanted your comments about this.

Sir Ken Knight: You will understand, I am not a member of the Chief Fire Officers Association. But if you wish me to get that information, Chair, I will ask the Chief Fire Officers Association to give you a note.

Q203 Stephen Barclay: That would be great. Thank you.

Sir Ken Knight: As an ex-Chief Fire Officer, I was a member. But I think it is inappropriate for those to come from me.

Q204 Chair: I will not hold up the Report for that. We will get a note.

Q205 Mr Bacon: Sir Bob described this as a high-ambition, high-spec project. I take your point, Sir Bob, that it was a change project involving IT, but none the less it was a big IT project as well as a big change project.

Mr Hargreaves, in response to Mr Barclay earlier, you were asked whether you had run things and you said you did run the simplification programme. Indeed your biog says that. In expanding on it you said that the job there was holding Departments to account for delivery, which sounds to me rather like making sure they implemented what they were supposed to do rather than yourself being responsible for delivering something. But this is a big high-ambition, high-spec project, to use Sir Bob’s words, and you were its national project director. Had you been the national project director of any big IT project before this one?

Roger Hargreaves: No.

Q206 Mr Bacon: Your background was in the Treasury, where you worked on labour markets, education spending, single currency preparations, a whole load of things, all very worthy, but nothing to do with running or delivering a big IT project.

Roger Hargreaves: No. The single currency work was entirely to do with major IT projects. I was not the project director, but I was heavily involved in that work.

The other observation I make is when I joined this project there were significant problems in place. As the NAO Report recognises, very significant improvements were made. And regardless of whether or not I had direct experience of doing this kind of job before, I did it markedly better than-

Mr Bacon: The other three? I think we might even accept that. It was zooming towards earth without a parachute, and you got some of the parachute out before you finally crash landed.

Matthew Hancock: I think we should commend you for sticking up for yourself.

Mr Bacon: I think we would accept that, but it is extraordinary to me that we have had this scale of failure. I think it is one of the worst ones I have ever seen in my whole time on this Committee, and I have been on this Committee for 10 years. I suspect our conclusions may reflect that.

Chair: Thank you very much indeed.

Prepared 12th July 2011