Gerry Steinberg MPIn the House...

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Managing risks to improve public services (HC 1245-i)

Public Accounts Committee 12 Nov 2004

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Evidence given by Sir David Omand GCB, Permanent Secretary and Security & Intelligence Co-ordinator, Cabinet Office, Mr Graham Hooker CBE, Head of Detection and Regional Head of Customs Law Enforcement, South Region, HM Customs & Excise, Ms Ann Taylor, Director, Coal Liabilities Unit, Department of Trade and Industry (DTI), Mr Alan Davey, Director of Arts and Culture, Department for Culture, Media and Sport (DCMS) and Mr Hugh Pullinger, Head of Risk Support Team, HM Treasury.

Q45 Mr. Gerry Steinberg (City of Durham): Mr Pullinger, what risk assessment has been made on the number of jobs that are being transferred to India from National Savings by Siemens business?

Mr Pullinger: I am afraid we do not have the case study people here today and I am not sure whether it was covered in the NAO report.

Q46 Mr. Gerry Steinberg (City of Durham): It is not.

Mr Pullinger: I am afraid I do not have a direct answer to that.

Q47 Mr. Gerry Steinberg (City of Durham): I am not surprised.

Mr Pullinger: I know it is an issue that they have been addressing and that it was a difficult decision for them to take.

Q48 Mr. Gerry Steinberg (City of Durham): Stop waffling. You do not know.

Mr Pullinger: That is what I know.

Q49 Mr. Gerry Steinberg (City of Durham): So I can go back and say to some of my constituents that the Head of the Risk Support Team does not know what risks are being taken regarding loss of jobs in my constituency. I would have thought that was a very important issue, but never mind.

Mr Pullinger: If I might just comment on that, the Risk Support Team's job is to improve the capability of government overall to handle this. We do not try to be au fait with all the risks that are being handled all around government. That is for those departments and the experts in those departments to know about.

Q50 Mr. Gerry Steinberg (City of Durham): A follow-up question to Mr Sheridan's on a subject which is not in the report. When is the CSA going to combine their past payments to the present payments system, because at the moment it is totally unfair? People are paying different amounts in the same circumstances, and frankly, the department has had long enough now to solve the so-called problems. I really think it is about time that we are told, once and for all, when the two systems are going to be joined together.

Sir David Omand: Those who run the CSA will have noted what you say, but we do not.

Q51 Mr. Gerry Steinberg (City of Durham): Can I take it that you will write to us on this?

Sir David Omand: I will ensure you receive a reply.

Q52 Mr. Gerry Steinberg (City of Durham): I want to turn also to the points Mr Trickett was making about the coal compensation payments. I, like him, have a constituency with a lot of ex miners and one of the main issues I get in my postbag is compensation payments. I have to say that when I do contact the department they are very helpful and very good. What frightened me to death when I read this report was that page 11, paragraph 4 tells us "The Coal Liabilities Unit retains overall management responsibility for the liabilities, but the schemes are operated by a network of contractors, including Capita". Is that the Capita?

Ms Taylor: It is.

Q53 Mr. Gerry Steinberg (City of Durham): Is that not a risk in itself?

Ms Taylor: Capita took over our claims handler in January this year. I have 1,200 to 1,500 people in Sheffield handling the claims. The Department does not handle the claims, a contractor handles the claims. They are called IRISC and they were previously owned by the AEON group. Capita took them over in January. We did due diligence.

Q54 Mr. Gerry Steinberg (City of Durham): Can I tell you that my only dealing with Capita was to try to talk to somebody in charge, somebody with a bit of authority in Capita and I was told they could not give me a name, they were not allowed to. Then I asked if they could give me a name to write to and they said they were not allowed to give out any addresses. Are miners going to get exactly the same treatment as I got when I was trying to deal with Capita who worked for Westminster Council?

Ms Taylor: I hope nobody in my bit of Capita gave you that advice.

Q55 Mr. Gerry Steinberg (City of Durham): No, it was at Capita who work for Westminster.

Ms Taylor: There are rules about replying to correspondence. They have a unit there replying to MPs correspondence, which most MPs find very helpful. Certainly they have taken on the company with enthusiasm and they are helping us with the world class efficiency project which we have got going.

Q56 Mr. Gerry Steinberg (City of Durham): I suggest you keep a very close eye on them, to be honest. It is a good job Mr Field is not here, otherwise he would probably go to town. I have to say that I was a little worried when I saw that they were involved. How do you know, for example, that they actually manage the risks properly?

Ms Taylor: Through the process I was talking about earlier. We share our risks, we have targets and we look to see how they are performing against their targets.

Q57 Mr. Gerry Steinberg (City of Durham): You have no difficulty in talking to them. Will they give you a name to talk to?

Ms Taylor: Absolutely; yes.

Q58 Mr. Gerry Steinberg (City of Durham): Perhaps you could pass the name on to me.

Ms Taylor: The IRISC people who are our claims handlers have a unit for MPs, handling MPs' correspondence. If you have any concerns, please get in touch with that unit. I can give you the name and give you the contact.

Q59 Mr. Gerry Steinberg (City of Durham): That is good; excellent. There are still many hundreds of claimants in my constituency - it could be thousands - who are still waiting for a settlement. How long do you think it is going to take before everybody is dealt with?

Ms Taylor: We are discussing with the judge at the moment - because the judge is still in charge of the scheme - quite radical proposals to change how the compensation is paid out, so that we shorten the process. We had a huge surge of claims in the last six months; the scheme more or less doubled in the last six months, so a lot of people who still have outstanding claims have not had them in for very long. If we go ahead with the proposals we are putting to the judge, we are probably looking at another four to five years for finishing all cases.

Q60 Mr. Gerry Steinberg (City of Durham): Can you turn to page 40 and Figure 32? "Coal Liabilities Unit staff are responsible for updating a number of 'Storybooks' that detail where improvements have been made to claims handlings, including an Audit and Risk Management Storybook, an Efficiency Storybook, a Stakeholder Communications Storybook, a Learning Storybook, and a Fraud Storybook" and an Efficiency Storybook. The only storybook not here is the Noddy. Storybook. What is a "storybook" as a matter of interest?

Ms Taylor: We are trying to capture lessons we have learned, so that when the NAO come to look at the schemes and how we have dealt with them, the main facts will be set out. They are not bedtime reading. They are not novels. They are quite short, sharp things which capture the main points. The schemes will have gone on over a long time. I will have moved on when the thing is completed. Other people will have moved on. It is hard to revive corporate memory and yet it is a very important scheme.

Q61 Mr. Gerry Steinberg (City of Durham): So they are there for the record.

Ms Taylor: They are there for the record and quite skeletal things.

Sir David Omand: It is one of those terms which I am afraid has crept into the public service from the private sector.

Q62 Mr. Gerry Steinberg (City of Durham): So I shall not be able to read it to my grandson.

Ms Taylor: It is not a tale; it is all true.

Q63 Mr. Gerry Steinberg (City of Durham): I thought you were being serious for a moment. Can we have a look at another issue? Have you changed the goalposts in terms of compensation claims for deceased miners where there are no medical records?

Ms Taylor: No. We are putting proposals to the judge about how we change the whole of the deceased claims to use the outturns from recent cases to make risk offers to miners.

Q64 Mr. Gerry Steinberg (City of Durham): So you are not going to take away the rights of deceased miners who have no medical records and the opportunity for their family to claim.

Ms Taylor: They have claimed. The claims are in already.

Q65 Mr. Gerry Steinberg (City of Durham): Yes, but you are not going to refuse those claims on the basis that there is no medical evidence.

Ms Taylor: No, what we are looking at is using the recent outturns from deceased cases and making up front a risk offer to claimants where in most cases there will be no records; claimants where the miner died perhaps 20 years ago. When we have looked for records for those people, because of disruption policies ---

Q66 Mr. Gerry Steinberg (City of Durham): Is it fair to say that you wanted to change the system?

Ms Taylor: No.

Q67 Mr. Gerry Steinberg (City of Durham): You were never going to change the system.

Ms Taylor: We were looking at how to deal with cases which were unassessable.

Q68 Mr. Gerry Steinberg (City of Durham): So anybody who has died, who has a claim and there are no medical records, will still be compensated. Yes or no.

Ms Taylor: It depends what is on the claims questionnaire. If the claims questionnaire gives us a reasonable basis to make the compensation, then we will make it.

Q69 Mr. Gerry Steinberg (City of Durham): Can we move on to tobacco smuggling? It is one of the biggest problems we have in terms of risk assessment, is it not?

Mr Hooker: It is a very serious problem.

Q70 Mr. Gerry Steinberg (City of Durham): Have you been successful?

Mr Hooker: We have been significantly successful in reducing the illicit share of cigarettes on the market, an assessed 21% in 2000 and rising to a projected level in many areas of 30% to 40% and the most recent published figures, which are discussed with the tobacco manufacturers, suggest that the savings have accrued at around 18%.

Q71 Mr. Gerry Steinberg (City of Durham): I shall not go into how I do not think that is very successful, even though it has come down a lot, because there are still shopkeepers - I had one in particular last Friday night - in the North-East of England, which is supposedly the area with the biggest problem, who are virtually going out of business because of it. What annoys me more than anything else - and this is the point I want to make - is where, after taking people to court, having not cocked it up, which clearly in the newspapers you seem to do a lot, on many occasions, then some doddery old judge lets them off. What can we do to ensure that those people who are smuggling and go to court because you have evidence are convicted? Do you see any changes in the law which are necessary?

Mr Hooker: No. I think the inherent problem which we have been tackling is the issue of professionalism in the preparation of the case: proper preparation of evidence; proper witness statements; proper disclosure.

Q72 Mr. Gerry Steinberg (City of Durham): You have not been doing that properly, have you?

Mr Hooker: It is something which we learned through experience, because it has cost us dear in terms of the cases which have been thrown out by the judges. You must also recognise, against that background of some high profile unsuccessful cases, the number of successes we have had. The 21% I mentioned to you is a snapshot in time and we have actually reduced that from a rising figure, we have brought it back, and then taken it down to 18%. It is a moving feast, but I suspect from the information I see at the moment that we are still gaining ground and getting ever more successful cases.

Q73 Mr. Gerry Steinberg (City of Durham): I read in the newspapers that the EU were going to take action against you because they believed that you were too harsh in interpreting the rules about what was being allowed in. What are you going to do about that interfering body which should mind its own business and ensure that people who are breaking our laws are punished?

Mr Hooker: As we have always made clear, there is a difference between a person's legitimate right to shop and bring back as much as they like for their own personal use and people who are bringing it back on a commercial basis and selling it. The Commission's interest is not in what we are doing about tackling commercial smuggling. The Commission's interest is in the people who bring back goods on what is described as a "not for profit basis". They bring them back and they sell them on, but they just recoup the costs they have laid out. What the Commission are saying is that our policy, in seizing the vehicle on the first occasion, is too harsh and the fact that we do not restore the goods. They feel that some more proportionate penalty would be appropriate. It is such a tiny percentage of the number of seizures that we make that we feel there should be a way through this problem. The Commission is not attacking our policy generally.

This is an uncorrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee. Neither witnesses nor Members have had the opportunity to correct the record. The transcript is not yet an approved formal record of these proceedings.

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