Select Committee on Environment, Transport and Regional Affairs Minutes of Evidence


Examination of Witnesses (Questions 480 - 499)

WEDNESDAY 24 JANUARY 2001

MR T MATTHEWS AND MR R THORNDIKE

  480. There are so many tiers; this structure is far too cluttered with tiers.
  (Mr Matthews) If you are referring to the role of the regional planning body, vis-a"-vis the Highways Agency, the role of the regional planning bodies is to be the key point of advice.

  481. If you open up that definition of the regional planning bodies' duties and responsibilities you could overwrite what your duties and responsibilities are, either that or you change the structure. In some ways it is demonstrating that there are just too many. That is my opinion on the basis of what you have just said.
  (Mr Matthews) My view is that there are not too many, but that may be a debate about the structure of the regional planning bodies. The regional planning bodies do not infringe on the major areas of responsibility of the Highways Agency.

Chairman

  482. You are getting in deeper and deeper. What we want to know are the priorities, who fixes the priorities and how they link in with the local authorities. I am not at all clear.
  (Mr Matthews) As far as major schemes are concerned, the priorities are increasingly being set through the medium of the regional planning bodies and that is where Ministers will be looking for advice. Our responsibility in that regard is to ensure that the regional planning bodies and the officers which support them have appropriate—

Mr Donohoe

  483. Can we just look at the efficiency of your Agency then? Can you tell us how much it costs to introduce resource accounting and budgeting?
  (Mr Matthews) Different area. There are two separate aspects to this question. The initial work undertaken by the Agency between 1994 and 1998, was really to establish what had traditionally been old Civil Service/Government ways of counting cash onto a commercial accounting basis.

  Chairman: Yes, this Committee understands how resource accounting works.

  Mr Donohoe: Who was responsible for that element in that period of time and are they still in employment as far as the Agency is concerned? It looks as though there has been a tremendous waste of public resources as far as the introduction of this is concerned and indeed the PCS has mentioned that that was perhaps one of the worst examples of financial management. You told us earlier about all this structure with a multitude of layers within it and here we are at the centre of looking at your accounting and budgeting to find a situation which does not demonstrate an awful lot of worth as far as public spending is concerned, does it? It is a nonsense. Somebody in this system should have been disciplined for that. Were they?

Chairman

  484. Was it really £13 million?
  (Mr Matthews) The total spend to get resource accounts in place in the Agency was about £14 million.

Mr Donohoe

  485. So the first contractor was not paid £13 million.
  (Mr Matthews) No. If I may explain the stages in this, the original stage between 1994 when the Agency was set up and 1998 when a consultancy contract was let was expenditure of just over £7 million.

Chairman

  486. You are telling us that is by the Agency, that is before the contractor came in.
  (Mr Matthews) That was by the Agency but it involved employment of contractors as well as permanent staff. Contractors and consultants were employed as part of the Agency's team before the initial setup.

  487. So it was not before the contractors came in.
  (Mr Matthews) It was before the main contract.

  488. You managed to spend £7 million before you gave out a contract.
  (Mr Matthews) There were stages. Initial work was done for the first three and a half years which was managed in-house by the Agency, but that involved the employment of a number of different consultants and contractors.

  489. How much of the £7 million was for people from outside?
  (Mr Matthews) I do not have the breakdown of all of that expenditure. The majority was by in-house staff.

Mr Donohoe

  490. Do you think that was good value for money?
  (Mr Matthews) In retrospect, having reviewed this when I came in, the systems and developments which have taken place were probably value for money. What was disappointing and in retrospect not managed carefully was the time it took.

  491. How was that first contractor appointed?
  (Mr Matthews) The first consultant in 1994 was appointed by the then Finance Director to advise him.

  492. Was it after a good lunch?
  (Mr Matthews) I do not know the precise process by which that person was appointed.

Chairman

  493. You are being asked a serious question. Did it follow the normal rules of appointment?
  (Mr Matthews) Yes, as I read the files, there was an open competition and selection process for that initial appointment of one of the consultants who was involved.

Mr Donohoe

  494. Was there a tender process?
  (Mr Matthews) No, this was an appointment of a member of staff.

Chairman

  495. Was it a friend of the Finance Director?
  (Mr Matthews) He was somebody who had previously worked with the Finance Director, yes.

  496. So he was a friend of the Finance Director and it did not follow the normal procedures and it cost £7 million before you brought somebody else in.
  (Mr Matthews) No. The person was appointed after open competition.

  497. He was or he was not? You have just confused me. Did this follow the normal procedure? Was this someone who was known to the Finance Director? Was it a perfectly open tendering procedure?
  (Mr Matthews) It was a selection of an individual rather than a tendering procedure.

  498. So it was done on the basis that it was somebody the Finance Director knew.
  (Mr Matthews) But it was a selection process which I understand was advertised openly.

Mr Donohoe

  499. Would you have done it that way?
  (Mr Matthews) It is difficult to know what I would have done six years ago but my practice professionally for all senior management posts is to be very clear whether I am appointing a member of staff or appointing a contractor. If you appoint a member of staff you have a proper senior civil service selection.


 
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