To be published as HC 233-i




Home Affairs Committee

The work of the permanent secretary

Tuesday 18 June 2013

Mark Sedwill

Evidence heard in Public Questions 1 - 69



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Oral Evidence

Taken before the Home Affairs Committee

on Tuesday 18 June 2013

Members present:

Keith Vaz (Chair)

Nicola Blackwood

Mr James Clappison

Michael Ellis

Lorraine Fullbrook

Dr Julian Huppert

Steve McCabe

Mark Reckless

Chris Ruane

Mr David Winnick


Examination of Witness

Witness: Mark Sedwill, Permanent Secretary, Home Office, gave evidence.

Q1 Chair: Mr Sedwill, thank you very much. I am sorry we are running a bit late because we have had a Division. Thank you for coming. The last time you were before the Committee there was a great kerfuffle going on because the UK Border Agency was abolished on the day. You were appointed to oversee the new arrangements and you chair the oversight board. Could you tell the Committee how many times the oversight board has met?

Mark Sedwill: There are three variants of this board. There is one chaired by the Minister, Mark Harper, and that meets about once a month. I couldn’t tell you exactly how many times it has met since the decision was taken but it would certainly be two or three times. Then there are two boards that I chair. One is a version of our executive management board, which is essentially the Home Office board of the directors general, and that looks at the immigration system as a whole about once every four or five weeks, so that is not just the former UKBA, it is the Border Force and other components of the immigration system. Then I also chair a transition board, which essentially supports the Minister’s board. Since the dissolution, each of those has met two or three times in those modes, so four or five meetings that I have chaired altogether I would say.

Q2 Chair: The immediate organogram below you has four heads. One is Sarah Rapson, another is David Wood, and there are two others. We were totting up their salaries today and it came to a staggering £700,000 in total for four people. Are you satisfied that this is the right governance structure to put in place in order to see the organisation through to trying to sort out the problems that beset the UKBA? It is an awful lot of money, is it not?

Mark Sedwill: That is for three directors general and one director for the Passport Office and they are paid the standard rate, in fact in their case for interim directors general. We have not yet settled on the terms and conditions for the permanent positions. Both myself and the Home Secretary felt we needed people at that level, with strong management teams supporting them, running each of these businesses, and this is at the heart of the reform. As you heard from Sarah Rapson, the visas and immigration business needs to be an operation that is very much focused on bulk processing, customer service and improving service standards and getting on top of the backlogs that have preoccupied this Committee, rightly, for so long. Immigration enforcement is a law enforcement operation. So we do need good leaders and good management teams supporting them in those jobs, as we do across the Home Office.

Q3 Chair: Yes, but let us look at two of the things that Sarah Rapson said to us. In answer to my question, "Is it ever going to be fixed?" she said, "I don’t think so", which was a worry for this Committee. Why pay someone all this money, have this great drama, set up a new organisation when the new head of the organisation said she doesn’t think it is going to be fixed? Secondly, in your famous email you said, "Don’t worry, folks, most of us will be doing the same job in the same place with the same colleagues for the same boss". She was obviously a success at the passport service, there is no doubt about that and this Committee recognises that. In the six years that I have chaired this Committee she has not appeared once so things must have been going very well. All she is bringing is her private office staff. There seems to be only one major change that has been made. I know David Wood has got the job of enforcement but it is a kind of moving round of jobs. She is the new person in the organisation. Surely we need more than this. It can’t just be the case that you give people permission to do things they weren’t doing in the past. What is the change?

Mark Sedwill: To be fair, Mr Chairman, I can come to my email again. You had a fair go at me on the day itself on that but I am happy to have another-

Chris Ruane: Round 2.

Mark Sedwill: Exactly. The Home Secretary answered the question as well when she was before you a couple of weeks later. It is not just the change of Sarah Rapson at the top. In fact, her two key deputies are both quite recent appointments. Simon Hayes who is running the international operations is relatively recently appointed to that job. He is also an interim, but we are advertising that job permanently and he is a strong candidate for that. Paul Morrison is running the onshore migration business. So the management team was already refreshing, but Sarah, and indeed the permanent DG-that could be Sarah, it could of course be someone else-will have the opportunity to make changes in their top team, both the structure and the personalities, and of course changes further down. You will see those coming through over the next few months I would expect.

Q4 Chair: We can be promised it will not just be Sarah Rapson?

Mark Sedwill: No.

Q5 Chair: There will be more people, it will change?

Mark Sedwill: There will be changes but it is important, Mr Chairman-I think I know what you are driving at here-the key issue here was the structural issue. It was not about leadership or the people. The Committee has been to many operations, both around the world and at home, and I think have generally been quite impressed with the caseworkers you have seen on the frontline. The fundamental underlying problems here were structural, the systems, the IT, the support and so on, and not the personalities. It would be wrong to dwell upon just the personalities.

Q6 Chair: We will come on to immigration again but let us now move to procurement and e-borders. We appreciate, of course, that you did not sign the e-borders contract-you were probably in Afghanistan at the time-but you have inherited it as the Permanent Secretary. This Committee has been told for the last half decade that e-borders is going to be up and running in various different stages. What is the current position? The Home Secretary said the whole e-borders system has now been amalgamated into a wider and more comprehensive border systems programme, which sounds very much like Home Office speak; you have changed the name but we don’t quite know what is happening with it. When are we going to get the checks of people going out as well as getting checks of people coming in?

Mark Sedwill: The objective is to have exit checks through e-borders and other mechanisms by 2015, so essentially by the end of the Parliament. The e-borders programme is in operation. If you think back to the original programme, some very significant components of it are in operation. We already have data on around 65% of routes. That includes 100% of routes outside the EU and EEA. That is not 100% of every single person who moved backwards and forwards but it is 100% of routes and it will gradually move towards covering all of the movements backwards and forwards. It is about 143 million of the 200 million or so movements across the UK border every year. So, those important components of the system are in place and it is developing.

I think what the Home Secretary was talking to you about when she talked about the border systems programme is almost the answer to your earlier question. One of the problems with UKBA, although everything was amalgamated into it as an organisation, it was still quite fragmented and e-borders did not connect properly with other parts of the border system or indeed other parts of the immigration case-working system. The border systems programme builds on e-borders but it brings together, for example, the freight programme, Cyclamen, as well, and is designed to be a comprehensive approach so there are not any gaps. That is the point of that programme.

Q7 Chair: I am just keen on this contract that was signed that potentially cost £750 million. We paid Raytheon £277.6 million. We then sacked them, basically, and this was a few years ago. We were told last year that the contract would go out to tender last summer. We know that IBM and Serco have been working on this programme but we have heard nothing since. Has the arbitration with Raytheon been completed now?

Mark Sedwill: No. That is still subject to a confidential mediation and for commercial reasons there is nothing more I am entitled to say about it.

Q8 Chair: No, we don’t want to ask you. We just want to know whether it is over or not. We don’t want to drag it out of you if it is confidential. You have not seen the letter of 3 August 2011 from the company to this Committee when they were sacked.

Mark Sedwill: I haven’t.

Q9 Chair: I urge you to read it because in paragraph 3, when we said, "Why were you sacked?" they said that UKBA was never able to settle upon the scope of its requirements for the programme and that UKBA was in breach. Obviously you have not seen this letter and please have a look at it. Are you satisfied that when we procure, when we ask companies, especially IT companies-we are not very good at IT in Government; I am not just talking about this Government but successive Governments-that we tell them what we want and if they don’t do what we want we get rid of them? Isn’t that the essence of procurement?

Mark Sedwill: Yes, I wouldn’t disagree with a word of that, Mr Chairman. I think that is a very apposite way of putting it. Again being very careful because of this confidential mediation that is going on, I think it would be fair to record, as you just have, that that was the Raytheon position and of course that position is theirs not the UKBA position on the contract at the time.

But the more general point you make about IT and Government I think is a very fair one. I was in front of the Public Accounts Committee just last week and they have had the commercial people from central Government in front of them as well. This is why one of the big reforms that is being driven from the centre by Francis Maude and the team at the Cabinet Office is to disaggregate ICT programmes so they are essentially in more manageable chunks. Rather than going out with massive multi-hundreds of millions of pounds, sometimes multi-billion pound single procurements where we go to a single company and ask them to do all of it for us and then we end up completely dependent upon them and potentially in commercial dispute if anything goes wrong, the new guidance from the Cabinet Office is to try to break down these ICT programmes into no more than £100 million chunks. That is still pretty big but a lot smaller. In some cases it has to be breached. In the case of the border systems procurement, a component of it will have to be bigger than that but the idea is to disaggregate as far as possible so that that risk is essentially spread and we are not as dependent as we have been in the past on massive programmes being run for us by people who are essentially out of our own control.

Q10 Chair: Procurement is your core work as Permanent Secretary, but in the top 10 companies that have contracts with the Home Office there has been criticism of six of those 10 companies in respect of other contracts they have delivered. Reliance, Serco, Raytheon, De La Rue, ALS, the subsidiary of Capita Fujitsu, all these companies have failed in one way or the other. This Committee recommended that there ought to be a register of high risk companies, companies that have let the public sector down, so that people know not to give them more contracts. What progress has been made on that?

Mark Sedwill: You are right, procurement is part of my job. I am not sure I would agree, Mr Chairman, it is the core of it, but it is a big part of my job. This is something that is a cross-Government issue. There was a very interesting session at the Public Accounts Committee with Bill Crothers, the new commercial lead for Government, and Stephen Kelly, the chief operating officer, on exactly this point. The current structure means that procurements by Government Departments are essentially independent of each other and so we are breaching commercial confidentiality, we are in breach of contract if, for example, I were to go and ask the MoD how things were going in a contract with a company that I am seeking to sign a contract with. In my view, and in the view of the Cabinet Office, that does not make sense. They are seeking to move to a situation whereby essentially the Crown is the contractor with all of these companies and is able to both increase our own buying power and therefore drive more value for money into the system, but also address the very issue that you are highlighting. The difficulty at the moment is that unless a company is actively in breach of a contract with one Government Department to the extent that that becomes public, it is not possible to dig into the details of contracts because each of them is essentially commercially confidential. That is the reform that the Cabinet Office-and I certainly support it-is trying to push through so that the contracts are with the Crown not with different departments.

Q11 Michael Ellis: I want to talk to you about the UK visas and immigration section. How are we getting on with deporting people who commit crimes to their countries of origin? Can you say something about deporting foreign prisoners after they have served their sentence? Are we persuading other countries to accept their nationals back?

Mark Sedwill: You know this is a very long story, Mr Ellis. I think the story is essentially much the same as it was. We are still deporting a very significant number. I think the number is around 4,000 a year but if I am wrong I will write to you about that. That is just from my recollection.

Q12 Michael Ellis: The issue is whether some countries are still remaining obstructive about accepting their own people back. Presumably they are quite happy for them to stay here.

Mark Sedwill: There is a very mixed picture and I think you are right to point it out, Mr Ellis. There is a very mixed picture on this. We have worked really hard with the key countries. There are some countries that have a large number of foreign prisoners here and we have worked very hard with them on re-documentation. As you probably know, we have had very senior envoys working on that. We have appointed a new one in the last few months, Dame Anne Pringle, who was our former ambassador to Moscow. I think the Chairman will remember she is a very high impact, straight talking diplomat, non-mandarin-like diplomat. She has now taken that on. You are absolutely right, there is still a great deal of work to do if we are to achieve the step change that we are seeking.

There is one other point I might just make in response. There is another issue here that I think is worth recording for the Committee and this is the Nexus programme. I don’t know whether you are familiar with this, but this is a programme where we have brought together immigration enforcement and police in order to essentially bring those two systems together and deport people that the police come across who are foreign nationals. This was started in London. The systems are still essentially operating by putting people in the same room because we haven’t yet managed properly to join the casework systems and the IT, but that is already in the pilot phase and had the effect of deporting over 400 foreign nationals, of whom a couple of dozen were really quite serious offenders. Others were lower impact offenders who might otherwise have just been given a caution if they were British nationals but because they are in breach of their reasons for being here we have been able to give immigration powers to deport, and that is another angle on this.

Q13 Michael Ellis: The UKBA, as was, reported that they had delivered £218 million of cash savings in 2011-12, broken down as follows: £120 million in asylum support costs saved, £10 million in detention costs saved, £15 million in IT costs saved and £5 million in property costs saved. Can we save some more money as things now have progressed further in terms of rationalisation of services, therefore if we save more there it can be put to better use somewhere else?

Mark Sedwill: I think not only can we but we must. You will be aware of the spending review. We are still in the midst of a very tough settlement from 2010 and of course that settlement has been rolled forward and is even more challenging in 2015-16 and it is quite clear to me that there is no prospect of the pressure easing throughout the next Parliament. Whether or not we can, we have no choice but to continue to try to drive major savings into this area. I think that is quite a success story, however, and, as you say, Mr Ellis, indicates exactly the areas we must drive further efficiencies into.

Q14 Michael Ellis: Exactly. Finally from me, I am looking to you for what strategy you have in place for addressing the in-house changes that will be needed to transform the Home Office’s visa and immigration work. We have heard the Chairman refer to the backlog and the issues, which have been going on for a long time. What are the main weaknesses of the operation as it is now? If you can establish what your main weaknesses are in those operations you will be able to establish what strategy you need to transform the work of that unit.

Mark Sedwill: I will be brief because I know the Chairman will be impatient if I am not.

Michael Ellis: Not too brief.

Mark Sedwill: Let me try to boil it down to three points. I know you may wish to explore it further but it is a very big transformation question. I think it boils down to three things. The first is productivity. There are parts of the system, including parts of the overseas system, which are highly productive, they have good customer service and their decision quality is good as well. What is interesting is that people often think there is a tension between these things. I remember, Mr Chairman, once you put down an early day motion of gratitude to one of our senior visa managers overseas, in India if I remember correctly.

Chair: In 1986?

Mark Sedwill: It was definitely after that.

Chair: Have you been monitoring my EDMs?

Mark Sedwill: No, and it definitely was not 1986 because I was still at university and I wasn’t following them then, I can assure you. There are parts of the operation overseas in particular that have been very successful and where they have good decision quality and so on. There are lessons just without new infrastructure that we can learn from and roll into the onshore operations. By triaging cases, getting people to specialise, particularly less experienced case workers in more straightforward cases and so on, you get increases in both productivity and decision quality. Sarah Rapson and the leadership team are looking at that. That is exactly the kind of reform she brought into passports.

Second is the infrastructure itself. If you go around, it is still a very old-fashioned, paper-based system. They have made big reforms overseas and in the passport operation even with that but it still does not look anything like if you went to an Amazon factory or anything of that kind. We are still a long way behind where we need to be and if we are to achieve the savings we need to we have to deliver those ICT programmes in support of a genuinely digital process and a digital offer to the applicant. So there is a lot of ICT infrastructure but that is not the silver bullet, it is not the solution on its own. It has to be married to simplification of the processes, streamlining and higher productivity.

Q15 Michael Ellis: Streamlining and higher productivity is essential.

Mark Sedwill: Yes, absolutely. If you automate complexity you just have very expensive complexity. I have a highway code on my desk in my office so when people walk in and say, "Why have you got that?" I remind them that the highway code is a brilliant simplification of the mass of road traffic legislation. It is that analogy that I try to draw when I look at the immigration system and I have a project going on on exactly that point, because I think if we automate simplicity we have a much better chance of not falling into the trap the Chairman was talking about of IT programmes not delivering.

I am trying to be brief, Mr Chairman, but it is an interesting subject and I know the Committee will want some details.

Michael Ellis: I always like to ask questions on interesting subjects. Go ahead.

Mark Sedwill: The third thing is of course, while doing all of that, that essentially enables us to get on top of the flow of new casework. New applicants we want to encourage to the UK, new migration cases in the UK and new asylum applications but, critically important, we have to get on top of the old stock, the backlogs, the legacy work and so on. Until we do that, that becomes more and more complicated. The longer it goes on, people accumulate article 8 rights and so on. In a sort of a triage way, probably in a segmented way, we need to get on top of those backlogs as well because again, as the efficiencies come in and the overall savings come in over the spending review and the beginning of the next Parliament, we simply will not have the resources to continue to manage backlogs. As you know, the backlog itself takes management. It generates correspondence; cases become more complex; productivity drops, and so on. We have to try to get on top of that as well.

Q16 Lorraine Fullbrook: Mr Sedwill, a supplementary to Mr Ellis’ question. Of the estimated 4,000 or so criminals who are foreign nationals and were deported to their own countries, do you know how many come back in or is that a case of we have to wait for the ICT system being in place to estimate how many come back in?

Mark Sedwill: They would be denied re-entry if they sought a visa again. There are very strict rules about that, so they would be denied re-entry and they would be on the Home Office warnings index. There may be one or two cases where the crimes are time-expired and so on but the vast majority should be denied re-entry to the UK. I don’t have a figure on whether we know and, again, I am happy to look into that and write to you about it, but the warnings index system and the visa system, based on that, are designed to prevent that happening.

Q17 Lorraine Fullbrook: What about those who come back illegally? Would you know that?

Mark Sedwill: Not unless we encountered them. One of the powers that we are seeking to take, as you will know, through the Immigration Bill that will be before Parliament later in the year is to improve our radar screen into the health service and the benefits system and so on. If we encounter them in that way then we would expect them to flag up on the warnings index and then we would be able to take the appropriate action against them.

Q18 Lorraine Fullbrook: And deport them again?

Mark Sedwill: Exactly. Of course, this is different for EEA and non-EEA because EEA nationals should flag as they come through but inevitably there is much more freedom of movement for the EEA. The rules about being able to deport people with a criminal record from the EEA are less restrictive than we are able to impose on those from the outside.

Q19 Lorraine Fullbrook: Of the estimated 4,000, which are the top three countries that these people are sent back to?

Mark Sedwill: I think but I would have to check, certainly very large countries, Nigeria, Jamaica and I think China, India and Pakistan are the top few but I might not have that exactly right and, again, if I need to correct that I will write to you.

Q20 Dr Huppert: Mr Sedwill, as you know, when there are errors made and there are appeals against some of the decisions that can be quite a drawn-out process and there are a lot of costs that are incurred by the Ministry of Justice in doing that. Do you think it would be appropriate for the Home Office to contribute towards the cost of that so it would be more of an incentive for the Home Office to avoid appeals by making decisions earlier on? Obviously if this were to happen one would have to transfer money from the MoJ initially, but would you agree it might provide a helpful incentive for your staff?

Mark Sedwill: I hate to think you have been put up to this by the Justice Secretary or my colleague Ursula Brennan, Dr Huppert. I get the point you are driving at. I think there are quite powerful incentives within our own system already, although I am a believer in financial incentives and I was talking to the Public Accounts Committee about this with police efficiencies just recently. There are quite powerful incentives in our own system because it is very costly for us as well to work the cases through, be represented and so on. Of course that is part of the reason that Ministers have taken the decision to restrict appeal rights in certain areas where, for example, most cases that are allowed on appeal, 60% I think of family visitor cases for example, are allowed because there is new evidence brought. That is a huge cost on the system and is also in a sense a reflection on the original decision that may have been right but taken on a different basis. So I think there are quite powerful incentives in our own system to make this work but I am certainly happy to look at whether we can sharpen those.

Q21 Dr Huppert: It would also be a help, I think, if the information that was required was clearer. I know from colleagues as well that there are many times that we are trying to understand what the rules mean and it may be harder for those who don’t use the rules regularly.

Mark Sedwill: Absolutely a fair point.

Q22 Steve McCabe: I noticed last Wednesday in one of these committee rooms that in the information session that the Immigration Minister put on for MPs and others Sarah Rapson said that one of the changes in communication to MPs was that she was going to ensure that letters and responses to MPs had accurate information and credible timescales when they inquired about cases. What timescale would you put on when that will actually start happening?

Mark Sedwill: I would have to revert to you, Mr McCabe. To be candid, I don’t know whether Sarah Rapson has yet been able to work through it and come back to us. I haven’t seen from her yet a project plan that I could sign up to in this Committee and say that is the timescale to be able to do it, but it is one of the top priorities the Home Secretary has set for the new system. There were certain areas of work where there was in effect a policy decision not to reply to MPs’ letters. This was particularly in enforcement and removal type cases where MPs’ letters were just treated as another representation for the file. That was essentially our reaction too. I’ll leave Hansard to work out to record that. That clearly does not make sense. I understand this Committee’s frustration over the whole question of backlogs and when is a backlog not a backlog and that definitional issue, but there are really straightforward things I think we can do and replying appropriately to MPs’ correspondence is one of them. I don’t yet have a project plan that I could sign up to say that I can be confident of setting a deadline. It is one of our top priorities and I hope we will be able to do that certainly well within this parliamentary year.

Q23 Chair: Let’s just wrap up on immigration before I turn to Mr Winnick. You don’t agree with Sarah Rapson on the issue of it can be fixed? She said to this Committee very clearly, "I don’t think it can be fixed". You think it can be fixed?

Mark Sedwill: I think what she was trying to say-and I have talked to her about this since just to clarify the point she was trying to make. As anyone who has ever sat here knows, when you go back through your transcript or you see yourself on the web it is almost always the case-I can’t think of a single time I have appeared in front of a committee, or indeed in a TV studio, when I haven’t wished I had expressed something in a slightly different way.

Q24 Chair: Tell us about that. Do you think it can be fixed?

Mark Sedwill: I think the point she was trying to make was we need a culture of continuous improvement so we should never think to ourselves there is a moment at which we should be completely satisfied that the system is absolutely perfect. So we do need a culture of continuous improvement, but can we address those underlying structural problems that have beset the immigration system, beset different variations of it, caused huge public frustration, been the subject of endless inquiries by this Committee? Yes, I believe we can and that is the mission that we have set ourselves.

Q25 Chair: In respect of that EDM, it was not 1996, it was probably later as you correctly said. Are you making sure that the good practice of some of these posts at the moment-probably Mumbai is the best post in the world-is passed on to some of the other post that are not doing as well? That is crucial, isn’t it?

Mark Sedwill: I agree 100%, Mr Chairman. When I was running UK Visas we introduced a benchmarking system at that time to achieve just that. It was quite sophisticated at the time. We didn’t have decent IT for it so it was all done on spreadsheets but what we tried to do was compare like with like, so we compared big posts like Mumbai with other big posts, good small posts with other small posts and so on, and we drove very significant efficiencies but also crucially decision quality into the business. As you know, the two do actually go together; there is not a tension between the two. Importantly, we are trying to bring some of those lessons into the onshore business. That is why putting visas and immigration together in a single operation really does make sense.

Q26 Chair: Very important, as it was when you were running it, I think. The issue is this, the refusal notice, which is the first thing MPs see, if that is clear, with clear little blobs down the side explaining what is missing, the whole system improves enormously. We need to get them to write clear refusal notices. If we can do that then we are on the way to getting it fixed.

Mark Sedwill: Mr Chairman, for the benefit of Hansard, because I know nodding doesn’t work, I agree.

Q27 Mr Winnick: Anyone who thinks it will be all fixed in the near future must live in a different world from me. Changing the subject, salaries and bonuses, Mr Sedwill, which I know will be of interest to some of your colleagues if not to yourself, has a final decision been made on such bonuses to senior civil servants in the Home Office for the 2012-13 performance year?

Mark Sedwill: Not quite but almost. The top tier, the director general level, of recommendations goes before the civil service-wide Senior Leadership Committee and I don’t think that committee has met yet. I have made my recommendations but that has yet to be decided. Within the Home Office we have reached agreement on the two lower tiers, the director level and the deputy director level within the Home Office.

Q28 Mr Winnick: If I understand this correctly, there are bonuses to senior civil servants and also to Home Office board members?

Mark Sedwill: That is right. So the Home Office board members are the ones who, because they look at Whitehall as a whole, go to the Senior Leadership Committee and the permanent secretary’s is dealt with separately. But within the Home Office we have settled the directors and deputy directors.

Q29 Mr Winnick: Not all of us, and certainly not I, are familiar with the number of board members and what have you. What figures are we talking about combined? What is the total number for very senior civil servants and board members?

Mark Sedwill: I have 12 people on the Home Office board at that level. Some of them are interims. Those are director general level civil servants. Overall within the Home Office I think there are just over 200 senior civil servants. Therefore they account for less than 1% of the Home Office and about 2.5% of the payroll.

Q30 Mr Winnick: Would you be eligible for a bonus, Mr Sedwill?

Mark Sedwill: Well, I would be very surprised if I were since I was only Permanent Secretary for about seven weeks in the 2012-13 year. I think I made a reasonably good fist of those seven weeks but I don’t think I would claim I deserved a bonus and I don’t think I will be eligible, to be honest.

Q31 Mr Winnick: Would you take a bonus?

Mark Sedwill: As Permanent Secretary, no. Of course, I don’t know whether the Foreign Office want to give me one for Afghanistan. I would be very surprised if they would. No, I wouldn’t expect it, although there is a point here. It is not fair on my individual colleagues to say yea or nay in individual cases but, no, I wouldn’t expect one. I wouldn’t expect to be recommended for one on such a brief time in the job.

Q32 Mr Winnick: Do you understand the feeling, Mr Sedwill?

Mark Sedwill: I do.

Mr Winnick: I am sure it is not confined to the Home Office and it would be unfair to say this is purely a matter for the Home Office. People generally say very senior civil servants get substantial salaries. Your salary is a very high salary in the public service, and I am sure it is all justified. Why on earth should there be a bonus at the end of the year? Why?

Mark Sedwill: Actually, Mr Winnick, I wouldn’t disagree with you. This was something that was-

Q33 Mr Winnick: You would not disagree with me?

Mark Sedwill: No, but there is an important qualification to that. This was something that was negotiated several years ago where essentially a proportion of the salary pot was set aside to be in non-consolidated bonuses because the policy view at the time of the Treasury and the Government of the day was that that would incentivise good performance by civil servants. Of that salary pot, there were essentially two choices. It would either be consolidated into people’s pay and pensions and so on and therefore they would be rewarded appropriately but there would be no direct financial incentive for the job. There is a very strong argument. The unions would, for example, advance this argument that the public service ethic aligns best with that kind of reward approach. But the decision was taken to set aside up to 5% of the salary pot for bonuses. In the Home Office we only use about 2% of it, but that was the decision to set side. I do understand the Committee’s concern, I do understand the public concern about this, but I must point out that it is part of the salary structure and for as long as it is, if I am to attract the best people to the toughest jobs I must not disadvantage them compared to the rest of the civil service.

Q34 Mr Winnick: It is part of the culture. I see. Helen Kilpatrick in 2009-I don’t have later figures-got a bonus of between £10,000 and £15,000, Charles Farr-and we know what he does-£5,000 to £10,000, and someone else got £5,000 to £10,000 bonus. When we come to the most junior people, say for example who do the day-to-day work in the Croydon office on immigration matters and so on, perhaps on salaries of £20,000, £25,000, £30,000-I don’t know if anyone would be on less than £20,000-what sort of bonuses, if any, do they receive?

Mark Sedwill: They are eligible. The system permits 20% of staff in the delegated grades-so that is below the senior civil service-at all grades to receive a bonus, and those vary according to salary. I can’t remember the exact numbers. Again, it is a standard level.

Q35 Mr Winnick: They would get less than the figures I have just quoted.

Mark Sedwill: They would get less in absolute terms but they would get more in proportionate terms. The bonus system is not as spread out, if you like, as the overall salary structure and proportionately people lower down get a bigger bonus. I can’t remember the exact numbers but again I am happy to let the Committee know what those are.

Q36 Mr Winnick: Just one last question. In your own view-and perhaps you would hesitate to give that view-do you think there is a case, since you agreed with me at the beginning about how people view these bonuses, for elimination of bonuses for those who receive substantial salaries?

Mark Sedwill: I haven’t met a single top civil servant who is motivated by getting a bonus. People like to get them, of course. They like the reward. They like the money, of course. All of us do like a little bit extra. People like the recognition that comes with it, primarily. I think senior civil servants in particular are more motivated by that.

Q37 Mr Winnick: They see it as a form of recognition?

Mark Sedwill: It is the fact of the bonus rather than particularly the quantity I think that people appreciate, but what they don’t want, of course, is to find that they are disadvantaged by coming to the Home Office compared to elsewhere in the civil service. It is really important to me that I am able to attract people to do the toughest jobs, because actually most of our jobs on average are tougher than elsewhere in the civil service and I need good people for those.

Mr Winnick: I understand that.

Q38 Lorraine Fullbrook: Mr Sedwill, I would like to ask a further question on that. How do you quantify performance of senior civil servants and Home Office board members in relation to bonus awards?

Mark Sedwill: This is a relative system, so it is a civil service-wide system. We allocate people to different performance tranches. In the delegated grades it is 20% to the top, 70% to the middle and 10% to the bottom tranche.

Q39 Lorraine Fullbrook: Is this irrespective of performance? That is just a case of here is a bit of salary at the end of the year on a percentage basis.

Mark Sedwill: It is based on performance.

Q40 Lorraine Fullbrook: That is what I am asking. How do you quantify performance for senior civil servants and Home Office board members?

Mark Sedwill: It is done through the appraisal process, so the assessment of their performance against their objectives but also how they have performed. I look particularly when I am thinking about bonuses, for example, at not only have they achieved their objectives but how they operated as a member of the senior team, have they contributed to the corporate agenda, have they taken on responsibilities for things outside their area such as championing an element of diversity, for example. So particularly at that level I am looking for a broader set of leadership behaviour than just achieving their objectives, but it is a mixture of the two.

We have a moderation panel that essentially is always the level above the group of people being considered and we have some very tough conversations in that. I was looking at that across the three cohorts in the Home Office, the policy, the operations and the enablers, the corporate services, and was asking the kind of questions I think this Committee would ask. When I was being presented with certain numbers I would say, "That seems to be telling me that this is the best performing part of the Home Office at the leadership level and that isn’t my sense of it, particularly as a newcomer, so why is one group proposing more people than perhaps another group that I would consider to be a higher performing group?" That process of challenge got us to the outcomes that we decided. So it is quite a rigorous process but you can’t exactly quantify it, of course, because a lot of the work that people do is essentially qualitative.

Q41 Lorraine Fullbrook: Do you see this type of percentage of salary continuing or do you see it changing to individual performance based on objectives rather than a union negotiation at some stage in the past for X number of years?

Mark Sedwill: My own view on this is that performance bonuses have a place but not necessarily for everybody. For example, with contractors, I think the Committee looked last year at a particularly large bonus that was paid to a contractor. That might be appropriate, in my view, if that is a reward package that is negotiated with them at the beginning of a project and they get it for the successful completion of the project but not on the way through. You are incentivising them to stay and not go off to another job elsewhere and you are incentivising them to really deliver a successful project. For contractors, for example, I think it is probably an appropriate part of the reward package and may be quite a significant one. I accept that there would then be a headline that we have given someone £50,000 or £60,000 but I am certainly willing to justify that if I think that has attracted a highly skilled professional to the job.

Lorraine Fullbrook: And it has been delivered.

Mark Sedwill: As we have discussed, I am more sceptical about the motivational impact on civil servants who are in a 25-30 year career and whose motivations lie elsewhere. People like them, they certainly don’t want to be disadvantaged, but I think it is questionable how much of a positive motivational impact it has other than as a sign of recognition, which does have a very positive impact on people.

Q42 Steve McCabe: Can I just ask on bonuses, if the purpose of a bonus is to incentivise staff or to reward very good performance, how does that translate to members of the board? What are you trying to incentivise them to do or what kind of performance would a board member be responsible for that would need to be rewarded with a bonus?

Mark Sedwill: Let me give you an example of the Olympics last year. Quite a lot of the people who received bonuses at various levels in the senior civil service, and indeed throughout the system, had bonuses for the work they did on the Olympics and there was, as you know, some tremendous work done on the Olympics, not least spotting-

Q43 Steve McCabe: Were these Home Office board members? Is that who you are talking about?

Mark Sedwill: It was throughout the system but including the board, yes, including people at the board. But as I was just saying to Ms Fullbrook, what I am looking for, and this is the approach I take to it, I am not just looking for people at the board level to achieve a good performance in their day job. What I am looking at is their overall leadership contribution, are they contributing to the sense that the Home Office as a whole needs to perform? Are they taking responsibility across all of our agenda, so if they are responsible for terrorism do they also contribute on crime and immigration and so on? Do they take responsibility for corporate issues, so championing an underrepresented group for example, doing events with staff, leading a change programme? I am looking as much at the behaviour and their contribution as a leader at this level as I am at actually whether they are a good manager of the kind of work that they are doing. Just to turn it around, it is not of course the public manifestation of this and what your interest is, the bonuses. That is not the way we assess it. We assess people by performance and the people in the top tranche in the years when bonuses are paid get a bonus, but the decision is not do they get a bonus, the decision is are they in the top performing tranche.

Q44 Steve McCabe: Yes, but I am clear, I am talking about board members not staff. I think you said to Mr Winnick that the recommendations for Home Office board members for this year have gone forward but have not been determined yet.

Mark Sedwill: I have not been notified if they have. I don’t know when the Senior Leadership Committee meets.

Q45 Steve McCabe: Can you tell me are the recommendations to increase the bonus payments from last year or are they same or are they less, or are you not privy to that information?

Mark Sedwill: The recommendations I have made are essentially to keep the levels the same and the overall pot-

Q46 Steve McCabe: The levels for board members?

Mark Sedwill: Yes. Well, there may be individuals who, of course, as an individual get a bigger bonus.

Q47 Steve McCabe: What kind of arrangement are we talking about here for board members, just so that I understand?

Mark Sedwill: Last year I think the range was £7, 000 to £10,000, £7,000 to £12,000, something of that kind.

Q48 Steve McCabe: So there may be individuals who are being recommended for more than £12,000 this year?

Mark Sedwill: No, sorry, just to clarify, who may be getting recommended more. I am trying to maintain their personal confidentiality.

Q49 Steve McCabe: Yes, of course. I am not trying to pursue that but I am just trying to be clear. You are saying that last year some board members were recommended in a range between £7,000 to £12,000 and this year you are recommending that some board members get more than they got last year. Does that mean that some are getting up to £12,000 or more this year? That is what you are recommending?

Mark Sedwill: That is the point. So an individual who-

Q50 Steve McCabe: So there are no cuts in the bonus at the Home Office? That is really the bottom line, isn’t it?

Mark Sedwill: We are freezing it in cash terms. There may be individuals who are recommended for more because their performance justifies it but the overall pot is the same and the levels of bonus for the three tiers in the senior civil service are the same as they were before.

Q51 Steve McCabe: When you say you are trying to protect individuals, I understand that, but does that mean we won’t know what individual board members are getting as bonuses, we are going to be protected from that information for the future?

Mark Sedwill: I would have to check this but I think what we currently reveal is the salary ranges of all board members but not the precise salaries.

Q52 Chair: Mr Sedwill, I think if you could write to us when it has all been determined that is probably the best thing.

Mark Sedwill: I am very happy to do so.

Q53 Dr Huppert: Just a couple of brief things. Firstly, just on staff costs and numbers in that space. As I understand it, as we would expect the general trend for staff costs across the whole of the Home Office is going down and staff numbers are going down. The one exception appears to be the central Home Office where the costs went up by I think 5.5% although the number of staff went down by 6.4%. I am sure you understand why that seems a bit odd. Can you explain why it is that the central Home Office is actually costing us more?

Mark Sedwill: If I can just take a step back, the overall number is not quite right there, Dr Huppert. The overall numbers, partly because we are bringing more staff into the Border Force and so on, at least in the next year or so, have gone up very slightly but then will have to come down quite sharply because of the spending round settlement. Again, if there is a point I have missed here in response to your question I will write to you, but quite a lot of this is because of people moving from outside the central Home Office into the central Home Office and there is a mix of different grades and so on.

There are also people who were on contract who are now permanent employees and the other way round. For example, even before the decision was taken to dissolve the Border Agency, we had already decided to bring into the central Home Office a large number of the finance staff who were previously in the Border Agency as part of the overall shared service programme, partly because if we are going to have a shared service programme across Government it made sense to start with the Home Office itself. Of course, the Border Agency dissolution accelerated that but that would have happened anyway. There are quite a lot of apples and pears in these numbers. It is quite difficult to make a comparison.

Q54 Dr Huppert: Yes, and it may be that I am not good enough at reading the annual reports, the estimates papers and understanding what they all mean. I suggest I may not be the only person who can’t quite understand it. One last thing that does follow on from that, you are presumably agreed that the Home Office should be committed to transparency as a matter of principle?

Mark Sedwill: Yes.

Q55 Dr Huppert: The Home Office has a reputation with people I have spoken to, parliamentarians and also some of the officials, for not always being as transparent in responding to written questions as perhaps it could be, and I have raised a couple of these to do with the closure of the Border Agency and various other things. Will you endeavour to make sure that the Home Office gets rids of that reputation and is as helpful as it can be to parliamentarians who are seeking to apply scrutiny?

Mark Sedwill: I will certainly do my best. In the interests of transparency, perhaps I wish another email that I had written around the staff had been leaked to you as well, although maybe you have it, Dr Huppert, but I made exactly this point. I said the Home Office of the future, talking about the Home Office transformation programme, needs to be much more collaborative, much more transparent, much more open, not only in terms of being accountable but in terms of our openness to external input, external advice, policy advice, and so on. I am very much in favour of open policymaking where we can do it. For example, there are many brilliant criminologists out there in the academic sector. I don’t know that we necessarily get enough out of their expertise. There are other parts of Government do that rather better. We need to work more effectively. There are some very interesting initiatives around troubled families, for example. We need to work more effectively with other parts of Government. So, yes, absolutely.

On responses to MPs-I am not trying to dodge your question by dispersing it into the broader issue-I sat down with our parliamentary team and worked through with them some ideas we have to try to improve the response times and the quality of responses to PQs, to parliamentary correspondence and so. Although we are sort of in the middle of the pack for Whitehall, my desire for the Home Office is not to be in the middle of the pack. I don’t think that is where we should aspire to be. We should aspire to be setting the standard. So we are trying to think of some big changes we can make in the internal processes to improve the timeliness of correspondence. But interestingly, of course, one of the keys to this is to improve the quality because the reason often we are late is because things are bouncing backwards and forwards because Ministers say, "Well, that is rubbish, I am not saying that".

Dr Huppert: I daresay you can have a look at the specific cases I have referred to but I think if you could achieve a more open rather than the somewhat hostile, defensive Home Office of the past that would be very good. If you want to leak that letter to us we would be delighted to publish it. I have not seen it.

Q56 Chair: Finally just a couple of points. On the Home Office budget, are you happy with the settlement that was achieved last week?

Mark Sedwill: Yes, I am. It is a very tough settlement, Mr Chairman, but you would expect that. We have to make our contribution to the overall fiscal position of the Government and I think the Home Secretary-she deserves the credit but with the support of the department-made a very compelling case that was accepted and still ambitious.

Q57 Chair: Is it a reduction in your budget?

Mark Sedwill: Yes, it is.

Q58 Chair: Of how much?

Mark Sedwill: It is 7.7%.

Q59 Chair: How many staff will go?

Mark Sedwill: We are still working through that, because it is 7.7% on the resource budget and we are still wrestling with Treasury over the capital budget. The police budget has been relatively protected, so that is the cut in the police budget overall.

Q60 Chair: Counterterrorism?

Mark Sedwill: Counterterrorist policing has been protected altogether. Not all counterterrorism work but counterterrorist policing has been protected.

Q61 Chair: Immigration?

Mark Sedwill: Immigration will have to take part of the cut to the central Home Office budget, which is why it is really important, as I was saying in response to Mr Ellis’ question earlier, we drive through these reform programmes in the next 18 months to two years.

Q62 Chair: Has the amount you spend on consultancy services increased or decreased?

Mark Sedwill: Decreased, and I did a write a note to myself with the number. Consultancy is down 60% since 2009-10, so the first financial year.

Q63 Chair: What did you spend last year?

Mark Sedwill: This is also on contract staff, so I don’t have the figure separately for consultancy but I can let you have it. The total for consultancy and contract staff, and it is mostly contract staff, is £57 million.

Q64 Chair: £57 million?

Mark Sedwill: That is still down.

Q65 Chair: Down by 60%?

Mark Sedwill: Consultancy is down by 60%. Contract staff is actually up because we have taken on more contract staff in areas like the Border Force and other parts of the immigration system to close some of the gaps.

Q66 Chair: When you spoke to the PAC you said that at the moment only 2% of non-ICT items were in what we described as the Ghosh catalogue, which we will obviously rename after you, the Sedwill catalogue, the catalogue that the police could go to so that they could procure on a national basis. You said that you thought that by the end of the Parliament this could be as high as 80%. That is a huge increase. How are you going to do that?

Mark Sedwill: It is. Just to be clear, Mr Chairman, it is not the number of items in the catalogue. That is the proportion of police procurement going through the catalogue at the moment. So the catalogue is actually much broader than that. It has 20,000-something items in it, I think if I remember rightly. 26 of the 43 forces are signed up to it; 16 of them are using it actively, including the Met, but it is still only 2% of their transactions and that is largely because their own procurement processes need considerable reform.

Q67 Chair: How are you going to get it up to 80%?

Mark Sedwill: As I said to the PAC, one of your colleagues asked about the interim milestones, I am not yet confident that we have the project plan in place to achieve that so I have asked for that over that summer and I am going to have that, I hope, by the end of the summer. I undertook to write to them with the interim milestones and the methods and I am very happy to copy that to you.

Q68 Chair: Thank you. On the Compass contract, you recognise the concerns, you took the contract away from SMEs and you gave it to G4S. G4S are writing emails saying they don’t think they can handle all of it. Are you monitoring this? We don’t want a definitive answer today but there are concerns that have been raised with the Committee.

Mark Sedwill: I understand those concerns. Of course it is not just with G4S. There are several quite big suppliers, Serco, and G4S is not actually the biggest, I don’t think. Yes, we are monitoring the Compass contract. Overall, although it is a complex contract, we are reasonably satisfied with it. If you look at the costs of accommodation and transport under the Compass contract they are significantly less than-it is not an exact comparison-for example, the cost of a prison place for a UK citizen, a detention place for an asylum seeker. Some costs are higher, of course, because asylum seekers are not criminals, but other costs work the other way round. Asylum seekers often require language support, they are often very distrustful of authority and need more personal attention. Again there is an apples and pears point here, but it is roughly about £7,500 a year-of course we hope most of them are not there for that long-for about 24,000 people in the asylum detention estate. It is about £20,000 to £25,000 a year for an open prison. As I say, they are not directly comparable but I think those numbers tell a story about the overall contract delivering some confidence in value for money.

Q69 Chair: Mr Sedwill, thinking back over the last hour, I think there is nothing that you have said that we could use against you as a sound bite in the future, so you have done very well.

Mark Sedwill: Can I leave?

Chair: Thank you very much for coming in and we look forward to seeing you in the future.

Mark Sedwill: Thank you, Mr Chairman.

Prepared 25th June 2013