5 The decision to close the FSS
208. The announcement made in December 2010 that
the Forensic Science Service (FSS) was to be wound down by March
2012 was a culmination of developments and decisions taken over
the past two decades. The common view appears to be that that
neither the current nor previous Governments handled the FSS's
situation particularly well. For example, the Centre for Forensic
Investigation, Teesside University, stated that "the move
into the commercial market in the early 90's found the FSS lacking
and it never really adapted or was allowed to adapt its business
adequately to survive".[287]
In addition, we have been mindful throughout this report that
the majority of the decisions that we have criticised relating
to the FSS's status and restructuring, the forensics market, police
in-sourcing and forensic procurement strategy were made under
the previous administration. We
must state our disappointment at the historical inadequacies in
government decision-making that brought the FSS to its current
dire financial situation. While we have been critical of the current
Government's actions, it must be put on record that we consider
much of the responsibility for the current problems facing the
FSS to lie with previous administrations. The changes made to
the FSS since it became an Executive Agency in 1991, coupled with
a subsequent lack of Government understanding of the nature of
the growing forensics market, meant that problems inevitably arose.
Consultation and evidence-gathering
209. The Forensic Science Society stated that:
It was generally felt that the proposed closure was
an ill thought out and regressive step which could compromise
the quality of forensic science, inhibit research and development
and could jeopardise its contribution to the criminal justice
system.[288]
210. Forensic science is part of a broad landscape
spanning the scientific, policing and criminal justice communities
and the FSS does not operate in isolation. Having considered the
key stakeholders with an interest in the future of the FSS, we
would have expected the Home Office to have considered the position
of the following people or organisations prior to reaching a final
decision:
i. the Association of Chief Police Officers (ACPO)
or behalf of the police customer;
ii. the Crown Prosecution Service (CPS), another
key customer;
iii. private forensic science providers (FSPs)
who might reasonably be expected to take on FSS's market share,
assets and staff;
iv. the Home Office's Chief Scientific Adviser
(CSA) on the potential impacts on science and research;
v. the Forensic Science Regulator (FSR) on potential
impacts to quality standards; and
vi. the Forensic Science Service itself.
211. We have already set out our disappointment
that the Government took advice from ACPO, but not private FSPs,
the CSA or the FSR. The CPS is also a key customer of the FSS,
albeit not the paying customer. Roger Coe-Salazar, Chief Crown
Prosecutor at the CPS, told us that the CPS was informed about
the proposed closure of the FSS "right at the very end of
November" and that:
The advice, and I use that word very loosely, that
was provided was via the Attorney-General's office, which was
a mechanism of highlighting the risks that would be presented
to the criminal justice system should that closure not be managed
in an appropriate and proper way. There was no further advice
outside that.[289]
212. The CCRC, being reliant on the FSS's archives
for some of its reviews,[290]
is another criminal justice customer of the FSS. However, the
CCRC stated:
In light of our extensive experience and expertise
and the pivotal role the Commission plays in the CJS, the Commission
is surprised not to have been consulted prior to the decision
being taken to wind down the FSS.[291]
213. When we asked James Brokenshire MP, Parliamentary
Under-Secretary of State for Crime Prevention, whether the CPS
had been consulted prior to the closure decision, he responded
that:
The Crown Prosecution Service was engaged. They were
consulted as part of this process. [...] The CPS was engaged,
via the Attorney-General, through the clearance processes in making
sure that there was satisfaction across Government in terms of
the decision that we took in relation to the wind-down.[292]
214. The Attorney General fulfils the role of
chief legal adviser to the Government and oversees the principal
prosecuting authorities within England and Wales: the CPS and
the Serious Fraud Office.[293]
215. It appears that the Attorney
General was first engaged only through the clearance processes,
that is, the process by which Government-wide confirmation was
obtained, after the initial decision had been made by the Home
Office to wind down the FSS. We are surprised that the Director
of Public Prosecutions, the head of the CPS, was not directly
consulted. The Criminal Cases Review Commission does not appear
to have been involved at all. This is unsatisfactory and unjustifiable
given the impact the closure of the FSS could have on the work
of the criminal justice system. It should not need to be stated
that forensic science is a service for criminal justice, not just
policing.
216. It was clear from the written submissions
as well as the public reaction that the announcement of the FSS's
closure came as a surprise to many. However, we would not have
expected it to come as a surprise to the FSS's senior management.
We took oral evidence from Bill Griffiths, Chairman of the FSS,
who explained the process leading up to the 14 December announcement:
The final notification to us was on 25 November 2010.
We had a meeting with the Minister and we were formally told what
the decision was. We had a board meeting the following day, which
was a Friday, and we met as a senior management team on the Saturday
to do some preparation. The actual announcement came out, of course,
on 14 December, and that was the time that the business in general
and the staff were told. We were under an embargo not to announce
the detail until the statement had been prepared.[294]
That sounds out of context in a way, because in the
period leading up to the decisionin fact for a number of
months, and there is a whole series of correspondence and meetings
[...]we had been discussing with the Home Office what to
do about a business that had a strategic plan submitted to the
Home Office in April, which had not yet been signed off and which
indicated some severe worries about the viability of the marketplace
in which we operated. It certainly raised issues about the viability
of the financing of the business and the impact of that marketplace
on us. There had been continuous conversations, particularly when
the new ministerial team took over, about the context in which
we were operating. We had severe worries [...] about the marketplace,
police procurement, developments and what turned out to be a very
sudden collapse in the available work to the forensic suppliers.[295]
217. Despite the "continuous conversations"
between the FSS management and Home Office, the FSS's written
submission stated that "the announced closure of FSS has
been a huge shock and disappointment to staff; and to the forensic
science community in the UK and overseas."[296]
Prospect represents over 1,000 scientists employed by the FSS[297]
and Steve Thomas, Officer for the FSS, indicated that there had
been a fruitless desire for better engagement with the Home Office:
We had written to the Minister in June last year,
welcoming him to his post and seeking a meeting, because, obviously,
we had been aware that there had been issues to do with the size
of the forensic market and the impact that that was having on
our members through restructuring and other initiatives for some
time. So we were looking for an early meeting with him. We had
a response, either in June or July, to say that the Minister looked
forward to meeting us to talk to us about what our concerns were
about the marketplace, among other things, and that he was looking
forward to working with us. The first time we met the Ministereither
myself or my predecessor, the previous negotiating officerwas
two weeks ago, which was not only not in advance of the announcement
but it was not even within months of the announcement. That was
the first consultation we had with the Minister. [298]
Mr Thomas told us that:
The first that the union was aware of the decision
was on the day of the decision, on 14 December. There had been
no consultation with us at all from the Minister. There had been
no consultation or discussions with FSS management on it, so it
came entirely as a shock both to us and to our members on the
14th.[299]
218. Prospect's written submission also expressed
concerns over "the manner in which the decision was presented
by the Minister".[300]
219. We are pleased that the
FSS appears to have had ongoing engagement with the new Government,
but concerned that these discussions were limited to senior management
and did not involve less senior staff and the trade unions. It
is disappointing that the staff of the FSS should have been so
disempowered and disengaged from the process.
220. When we asked the Minister whom the Home
Office had consulted and what scientific advice had been sought,
he responded that:
the issues and challenges that came up were, in many
ways, of a commercial nature. Our discussions were focused on,
obviously, the Association of Chief Police Officers, the NPIA
and the policing sector. Equally, we did go out to the criminal
justice sector to obtain their input in relation to the integrity
of the criminal justice system. Obviously, the Home Office scientist,
who has just given evidence to you, was notified in advance of
the decision that was announced on 18 December.[301]
221. However, Dr Simon Bramble, Head of Police
Science and Forensics at the NPIA told us that "the NPIA
were not consulted over the decision to close the FSS directly.
We did not have anything to do with the final decision."[302]
The Government
should clarify whether the NPIA was consulted on the decision
to close the FSS before the decision was made, and when.
222. We are disappointed that
the Home Office carried out minimal consultation before making
its decision on the future of the FSS. There is a tangible difference
between consulting before a decision has been
made and consulting on transition arrangements after the
decision has been made. It should not have been difficult for
the Government to seek the views of key parties other than ACPO.
With such limited consultation, and particularly the lack of scientific
input, it is difficult for us to have confidence that the Government
fully considered all available options for the future of the FSS
and the likely impacts of its closure.
223. We have serious concerns
about the role of the Chief Scientific Adviser (CSA) at the Home
Office and the limited information on which the decision to close
the FSS was based. We do not consider that the Government's decision
fully took into account the best evidence available and we are
concerned that the CSA was disengaged from the decision-making
process. We recommend that the Government Office for Science review
whether there is a systemic problem with the Home Office's use
of scientific evidence in policy-making.
Costs of closing the FSS
224. The Home Office explained in its written
submission that its "main priorities were to manage the risks
to the CJS and to minimise the cost to the taxpayer".[303]
225. Supply Estimates are the means by which
the Government seeks from Parliament funds and parliamentary authority
for departmental expenditure each year. Spring Supplementary Estimates
are the final opportunity for departments to seek changes in parliamentary
authority for spending before the end of the financial year. The
Home Office's Spring Supplementary Estimates 2010-11, published
in February 2011, show the changes to spend relating to the FSS.Table
5: Summary of figures in the Home Office Spring Supplementary
Estimates 2010-11 relating to the Forensic Science Service[304]
Reason for spend
| Figure |
Increase in programme (capital grants) to provide rescue aid to the FSS
| £13 million |
Drawdown of programme to write down loans made to the FSS
| £12 million |
Drawdown of programme to cover costs associated with the FSS transition
| £3 million |
Drawdown of programme (capital grants) to provide rescue aid to the FSS
| £27 million |
Total (excluding provisions for Crime and Policing Group)
| £55 million |
Increase in provisions for the Crime and Policing Group
| £70 million |
Total (including provisions for Crime and Policing Group)
| £125 million |
226. The Home Office had put in place Rescue Aid "to
meet the necessary operating losses during the wind-down so as
to support the provision of effective forensics during the transition
process and avoid an uncontrolled administration".[305]
The Minister elaborated that:
The rescue aid payments that have been made are, in essence, to
cover the costs of stabilising the FSS and to manage the operational
losses incurred during the period of the wind-downthey
are very focused on those elementsand also to cover the
costs of a round of voluntary exits associated with urgent structural
measures to stem loss-making activities. That is where the rescue
aid-type funding has been focused in relation to those payments.[306]
227. The Minister explained that the £70 million increase
in provisions for the Crime and Policing Group covered:
a range of issues and elements, including potential redundancy
costs, property costs, interest payments, project costs and pensions.
Clearly, that is a provision and we would certainly be working
very hard to reduce that number, given that a lot of this relates
to commercial negotiations with contracted parties. That is very
much a provision at this stage in relation to the estimated costs
during 2011-12.[307]
228. Stephen Webb, Director of Finance in the Crime and Policing
Group, Home Office, added that:
We took it as a prudent assessment of what we thought might be
required. [There] are a number of areas where negotiations are
going onfor example, with the trustees of the pension fund.
It is hard to break it down precisely at the moment. We would
certainly be looking to come in below that sum if at all possible.[308]
229. On 5 April, the Home Affairs Select Committee took oral
evidence from Home Office officials on managing cuts to the Home
Office's budget. The Committee highlighted that winding up the
FSS would cost £125 million in 2010-11, contrasted with the
approximately £24 million costs of keeping it running (based
on the quotes losses of £2 million a month). Helen Kilpatrick,
Director General, Financial and Commercial Group at the Home Office,
replied that:
Keeping it running though is not a viable option because the company
would be trading insolvently, and the Rescue Aid Regulations wouldn't
enable us to carry on forever propping up a company that was trading
insolvent, so something had to be done with it.[309]
230. The Government should clarify
how costs associated with the FSS's transition were originally
calculated, particularly given that the transition process was,
and remains, not fully known. If it emerges through the transition
process that additional public money is required for the wind-down
of the FSS, including from sources other than the Home Office,
this information should be published with an explanation.
231. The Government's explanations
of the £70 million increase in provisions for the Crime and
Policing Group lacked detail. We request a full financial breakdown
of the £70 million provisions as well as an update at the
end of the financial year on how much the wind-down has actually
cost the Government in total.
Alternatives to closure
232. When he appeared before us, the Minister
explained that the FSS was a GovCo and therefore "subject
to the Companies Act and various other legislative requirements".[310]
As a consequence there were three options that had been considered
by Government:
[The] first option was allowing it to go into administration,
which we immediately discounted because of the impact that would
have on the criminal justice system and our fundamental desire
to ensure there was integrity within the criminal justice system.
The second option was some form of restructuring.
In other words, to invest further to see whether there was a way
of retaining the FSS in some form to be able to break even moving
forward.
The third option was, obviously, a wind-down arrangement,
which was our ultimate preferred option in terms of dealing with
the situation and taking things forward.[311]
The Home Office's written submission expanded on
the first option:
The most drastic option would have been to withdraw
any further financial help, which may have led to the directors
placing the company into administration early this year. An uncontrolled
administration would have seriously damaged the forensic capacity
available, and we were not prepared to expose the CJS to that
level of risk.[312]
233. We agree with the Government
that allowing the FSS to go into administration would have been
undesirable, not only for the criminal justice system, but the
employees of the FSS too.
234. We have explored the reasons why restructuring
would not have been a viable option in the context of a declining
forensics market, in chapter 2. The Home Office's view, in summary,
was that:
Further restructuring the FSS for ultimate sale would
have been extremely expensive and there would be no certainty
of achieving a sustainable position or realising any value from
the company at the conclusion of this. We had to take into account
State Aid and competition law constraints and concluded that,
in a declining market, the cost of further restructuring would
be disproportionate.[313]
235. We were curious whether changing the status
of the FSS from GovCo to the originally intended public-private
partnership (PPP) would provide a solution. When we asked Bill
Griffiths, Chairman of the FSS, about this, he stated that:
at no stage since the move to GovCo, has the board
of the FSS proposed a move to a private status. We would only
have ever done that if that was on the basis of a stable, healthy
marketplace and business, and we never got anywhere near that.[314]
236. We then considered whether it would be feasible
to change the FSS's status to one that would remove the need for
commercial viability. Having been, since 1991, an Executive Agency,
Trading Fund and finally a Government-owned, Contractor-operated
(GovCo) organisation that was originally intended to become a
Public Private Partnership (PPP), we were aware that the FSS was
no stranger to changes in status. The Minister's response was
that:
It is worth underlining some of the other constraints
that exist, particularly around state aid and the state aid issues
that prevail in relation to this, given that a semi-market has
been established with around 40% in the pure private sector and
around 60% residing with the FSS. Therefore, the Government has
to act within that framework of state aid. It can't simply continue
to fund money on a pro tem-type basis. State aid requires us to
look at a restructuring either to get to a break-even position
or to some sort of liquidation position. Against that backdrop,
seeking, perhaps, to nationalise it all over again was not an
option that was attractive either from the commercial aspects
that I have already talked to or, equally, the restrictions that
exist around state aid.[315]
237. It was suggested by some that the functions
of the FSS could be split. This would essentially involve separation
of the profit-making and non profit-making functions. Forensic
Service Northern Ireland considered that:
A review of the FSS to assess which sections are
viable business areas and which are of central importance to UK
as a whole should be conducted. It is likely that any prospective
buyer will bid for the most attractive assets within the FSS.
This means that other non-profit making services will be redundant
but these may be the very ones that are essential for dealing
with major complex cases or with national security. These could
be retained within a core FSS facility, which also acts as the
national [forensic science] coordinator, rather than the NPIA,
for R&D. They could also take back in-house the custodianship
of the national DNA database, as the NPIA is dissolved.[316]
Similarly, Sir Alec Jeffreys, Professor of Genetics,
University of Leicester, recommended:
retaining the FSS but in a greatly altered and substantially
downsized state. I would maximise the transfer of profitable activity
to the private sector, and place the remaining FSS back under
the direct control of the Home Office, removing its pernicious
privatised status. The focus of activities would be (1) R&D,
(2) training, (3) retention of broad expertise and appropriate
facilities to allow complex casework to be undertaken, (4) an
oversight, quality-control and regulatory function with respect
to the private sector, and (5) an international role in establishing
standards and protocols. I would also like to see far better interfacing
between FSS and academia, perhaps through relocation away from
the Birmingham site.[317]
238. As an alternative to closure, Forest Forensic
Services recommended:
Maintain[ing] a smaller core cadre of senior scientist[s]
to work with the Police, funded through central government allowing
the FSS to coordinate R&D and contribute, coordinate and manage
the more serious crimes alongside senior Police investigators.[318]
Final conclusions
239. There are many factors
to take into consideration when determining what has caused the
dire financial position of the FSS. We consider the most significant
factor to be the shrinking forensics market, driven by increasing
police in-sourcing of forensic science and a forensic procurement
framework that drove down prices and did not adequately recognise
the value of complex forensic services.
240. The stabilisation of the
external forensics market is now of crucial importance. For this
to be achieved, the Government must do two things. First, further
police in-sourcing of forensic science must be curbed. Second,
the National Forensic Framework Agreement, and any successor framework,
must be revised to reflect that some forensic science services
cannot be commoditised easily into products and ensure that the
true costs of forensic services are reimbursed to providers. Without
stability through regulation, a properly competitive market cannot
be realised. A shrinking market provides no incentive for further
investment or growth from any forensic science provider. The success
of forensic science providers and their willingness to invest
further in forensic science will be threatened if action is not
taken to stabilise the market.
241. The process whereby the
Government reached a decision on the future of the FSS was taken
on legal and commercial bases. If legal and commercial grounds
were the only relevant considerations, the Government's decision
to close the FSS would be reasonable. However, it is clear that
such a decision should not be taken on purely legal and commercial
grounds.
242. The Government did not
consider enough evidence in its decision-making. The impacts on
research and development, on the capacity of private providers
to absorb the FSS's market share, on the future of the archives
and on the wider impacts to the criminal justice system appear
to have been hastily overlooked in favour of the financial bottom
line. Examining the possible impacts of a decision after the decision
has been made contradicts the concept of evidence informing policy.
243. Proper consideration should
now be given to what resources might be irretrievably lost to
the UK with the closure of the FSS, including the FSS's archives
and the intellectual wealth residing within its scientists. We
have seen no detailed plan outlining the transition and the future
of the FSS's staff, archives, work and assets.
244. While there would be merits
in retaining the FSS as a completely public agency of the Home
Office that focuses on R&D, training of forensic scientists,
establishing quality standards and maintaining archives, we are
not convinced that the separation of forensic science research
and provision would necessarily be the ideal solution, because
research efforts should feed into and improve service provision.
In response to this report we ask for the views of the Government
and Transition Board on this matter.
245. The transition deadline
of March 2012 is extremely challenging and we are not confident
that an orderly transition can be achieved by this date. The Government
should extend this deadline by at least six months. Extending
the transition deadline would enable the Government to consult
on, and determine, what its wider strategy for forensic science
should be. The FSS should be supported during this period. The
FSS transition should be carefully monitored to ensure that it
does not further contribute to market instability or lead to a
diminution of service to the criminal justice system. Continuing
to support the FSS during this period may add additional costs
to the public purse, but we consider that it should be seen as
a price worth paying.
287 Ev w143, para 1.1 Back
288
Ev w163, para 5 Back
289
Q 138 Back
290
See paragraph 155. Back
291
Ev w156, para 13 [Criminal Cases Review Commission] Back
292
Q 304 Back
293
"The Criminal Justice System", Crown Prosecution Service
website, www.cps.gov.uk Back
294
Q 2 Back
295
Q 3 Back
296
Ev 77, para 1 Back
297
Ev 65, para 1 Back
298
Q 6 Back
299
As above. Back
300
Ev 65, para 1 Back
301
Q 303 Back
302
Q 138 Back
303
Ev 62, para 28 Back
304
HM Treasury, Spring Supplementary Estimates, 2010-11: Home
Office, Session 2010-12, HC 790, p 221 Back
305
Ev 62, para 25 Back
306
Q 307 Back
307
Q 305 Back
308
Q 306 Back
309
Uncorrected transcript of oral evidence taken before the Home
Affairs Committee on 5 April 2011, HC (2010-12) 928-i, Q 15 Back
310
Q 298 Back
311
As above. Back
312
Ev 62, para 29 Back
313
Ev 62, para 30 Back
314
Q 14 Back
315
Q 302 Back
316
Ev w77, para 3.5 Back
317
Ev 64, para 5(c) Back
318
Ev w50, para 5(c) Back
|