Select Committee on Procedure Minutes of Evidence

Examination of Witnesses (Questions 60 - 80)



  60. You made the point, did you not, in your first reply that this Section 82 procedure was neither discussed on the floor of the House nor was it discussed in Committee?
  (Mr Davis) That is right. We talked about that very briefly in the Committee of Public Accounts some time ago now. The viewpoint is reflected in the correspondence with which I imagine you have been provided between Jeff Rooker and ourselves which reflects almost exactly the view at the time.
  (Mr Kirkwood) There were two elements which I think left a good deal to be desired from our point of view. Firstly, you rightly point out the fact that the discussion that took place on the floor of the House when the Bill continued (it was Clause 57 in the original Bill, which became Section 82 of the Act) got no discussion at all. I myself, because I had been discussing it with David Davis and some other colleagues, tabled an amendment on the report to try and delete the clause simply to provide a vehicle for having a short discussion to try and get assurances from Ministers. I do not blame Ministers for this because the "usual channels" are responsible for the timetabling of legislation, but the guillotine meant that there was no discussion of any kind. It took a bit of creative ingenuity on the part of Mr Davis in order to get anything out of Mr Timms who, to be fair to him, responded to a point of order as helpfully as he could under very severe time constraints, and the chair glowering at him rather heavily. We tried to pick up some of the issues in the other place but, of course, the other place is severely constrained in terms of what it can do in terms of financial powers. We were all left dissatisfied that the House of Commons had not been properly apprised of what the full consequence and extent of this new power was, and that was a serious matter as far as we were concerned. The second area of disappointment came when the Government gave us notice that they wanted to implement a Section 82 procedure. It came in a letter from the Secretary of State dated 3rd December 1999. The import of the letter was quite explicit. It wanted the Committee to sign off this proposal under Section 82 before the Christmas recess. That caused us some consternation because, acting responsibly, we knew as a Committee that Parliament did need help to get the computer system up for the Child Support Agency and it was no part of our brief to slow that down in any way whatsoever. It was in no-one's interests so to do because the Government Minister had already given the Committee an undertaking that the new system would not come on-stream until the computers were up and running. We were then left with a situation where we were under a lot of pressure to get it signed off before the recess which we, with some trepidation, refused to do. We decided to have a hearing in January. We summoned officials on the 12th January and we had a full hearing and the whole edifice of the proposal that they had originally sent to us before Christmas crumbled in their hands. They started asking for sums of money in the region of £60 million to be spent before Royal Assent. This was a Bill that was going through Parliament at the time. Eventually, after a lot of toing and froing and a lot of very heated and concerned discussion and cross-examination by my colleagues in the Select Committee (unfortunately I was not present myself that day) the Department admitted that they had done their sums wrong and they only needed £6 million. I repeat again; in fact they did not even need the £6 million because they did not sign a contract until after Royal Assent was given later that summer. So it was disappointing in that the House was not given any real chance to understand anything at all about the consequences and the precedents that this new procedure was introducing into our parliamentary rules and ways of doing things. The Department did not seem to know what it was doing and was trying to frogmarch the Select Committee on Social Security, which Mr Rooker and Stephen Timms had agreed would take the lead in terms of the content of any of these orders brought forward by the Department, in a quite unconscionable time. We could quite easily have said, "Okay, this is so important we will give the Department what they want." If we had given them what they wanted, they would have had £60 million of expenditure. They only needed £6 million and at the end of the day they did not need any of it at all in the fullness of time. So you begin to wonder to what extent these orders are a sensible thing to be promoting in the first place.

  Chairman: On the same point, before I pass the questioning to Mr Stunell, Clive Efford?

Mr Efford

  61. You are quite forceful in your criticism but the recommendation of conclusion J in the your first report accepts the principle that a realistic, properly costed, suitably safeguarded amount in order to bring forward the Child Support arrangements should be implemented without delay. If what you are saying to us is accurate, I would have expected a tougher report. Would you care to comment on that.
  (Mr Kirkwood) That is a fair question, Mr Chairman, but we were facing two ways. We were desperate to get this Child Support Agency computer working as soon as we could. If we had given the Department everything they wanted when they brought forward the first draft, they would have gone home with the authority to spend £60 million, and we did not feel in our heart of hearts that we had the evidence to be able to do that safely and recommend to the House that this was a proper use of money. So, it is a bit ambivalent to that extent. I think that the work that the Committee did was effective because it brought forward a second and better report, one that was better prepared later in the year with which we were then quite happy. Although it did not meet all of our concerns, particularly about risk and the final amounts involved in the contract, we were much happier about the second report that was brought forward. We were prepared to accept that, and that involved a total delay of maybe three months maximum whereas, I say again, the Department really did not need to use this power at all because it signed the contract after the Bill got Royal Assent.

  Mr Stunell: I have to say, in contrast to what you have been saying, the Minister last week was very enthusiastic about this report and went to some pains to explain to us what a useful process it was. She said she was more accountable than she would have been if it had been done by any other process, paving Bill or whatever. I wonder whether in retrospect you can say how, if we are going to have this process at all, it might be improved and made more watertight. That might be a question for Mr Davis and perhaps, secondly, Mr Kirkwood in more specific terms.

Sir Paul Beresford

  62. Can I add some bits so that you can pick them up. The Minister said that the Section 82 procedure, as it was carried through, was open and transparent. She said there was no diminution of parliamentary scrutiny. She also disagreed with your comment, David Davis, that the items of preparatory expenditure approved under Section 82 should be identified separately in the Supply Estimates. She said that could not be done, even though as I read the procedure the Government was talking of using, that was exactly what they were proposing to do.
  (Mr Davis) If I can deal with a technical issue first, Chairman. There is a distinction between "preliminary" and "preparatory". This procedure applies to preparatory. I give examples of the distinction in the Treasury Minute on this which says, for example, that hiring extra staff or buying a computer or renting a building would be preparatory, ie getting ready to go, whereas preliminary would be piloting, scoping, that sort of work. For example, I would assume that use of consultants, as the Government use consultants so much, would be preliminary rather than preparatory in this context, so there is a distinction there between those two. It is a very difficult distinction but an important one in the context of this discussion. Can I come back to Mr Stunell's point where I think, if I may Chairman, I will refer to the Department's note to you, Section 5(i) and Section 3(ii), where they make a great deal of "Parliament has to agree both the amount of expenditure, which cannot be exceeded under the purpose of the expenditure ..." which to me would imply that the limit is one which is meaningful. Bearing in mind what Mr Kirkwood has said, that in effect they were asked for £65 million in the beginning and it ended up as probably less than £3 million, if that, then that limit was not meaningful in the first sense. Secondly, that adds a certain amount of scepticism to the sentence used in 3(ii) which says: "Her Majesty's Treasury would expect any such proposal to be cleared by them, and they would not agree unless there was compelling justification." The reason I raised those two points is that in the conversations, and I have to say very helpful conversations that Mr Kirkwood and I had, with Mr Timms after the end of the debate, this notion that there was a tight control was implicit, and that simply is not what we have observed here. The first thing I would say to you is just in managerial terms I would expect the Treasury to do a rather better job than clear an Estimate which is 2,000 per cent over the top and, similarly, as a result of that I would expect to have limits which are real and not nugatory or otiose. The second thing I would say is we are told it is more accountable, more transparent, but I cannot see how this is more transparent and accountable because, apart from anything else, due to the practicalities of the matter we agreed to a procedure which in effect means that it goes through the Committee of Public Accounts (we do not have expertise in any of the individual areas) and it is effectively passed straight on to Mr Kirkwood's Committee. That means that no-one else in the House of Commons has a sight of it and that in itself is very important. The reason we agreed that procedure was because we were told that it would have to be fast. You can see some sense of that in one of the letters that Mr Timms or Mr Rooker wrote, I cannot remember which, where they talked about the "emergency procedure", whereby the draft Order would be passed to the two Committees but they would go ahead without clearance. So you can see that there was an impression around the whole discussion which implied that it should be very fast. The result of the speed on this has been, in my view, actually to get a rather sloppy procedure. I cannot find any other word to describe £65 million for £3 million real expenditure. I would be very, very cautious. Implicit in this note to you is the idea that it might be extended to other departments. I would be incredibly cautious about doing that before seeing this work for several years.

Mr Stunell

  63. Before Mr Kirkwood adds anything, the evidence we were given last week was that the authorization was for £6 million of spending within the Department and £39 million potential liability with an IT supplier. In your first introductory answer you referred to the possibility of having a £2 million ceiling that you might agree to. Do you think that the imposition of an absolute limit for any Section 82 in the future is a way ahead in forcing this into an envelope that you could deal with?
  (Mr Davis) No, the reasoning for that was going straight back to the original cause of the problem, which is that departments do not, as a rule, do a very good job of the first stage of creation of information technology projects. If you will forgive me, I will give a parable example: NIRS2, the most scandalous of the projects at the moment. In that project you had a bunch of civil servants who understood the complex National Insurance regulations on one side of the divide, and you had a company with lots of very skilful programmers and systems engineers who understood all the complexities and difficulties of computer language on the other, and before they got the project up and working they did not make sure that a massive knowledge transfer occurred. It has to be a massive knowledge transfer. NIRS2 was described to the Committee of Public Accounts as "the most complicated piece of software in Europe". That was why I said, if I had been asked what I thought about the preliminary stage, I would have been quite willing to see for IT projects quite a high number. I cited £2 million for that. Frankly, that was just by reference to the £900,000 currently applied, to give us an order of magnitude.


  64. Can you define and spell out what NIRS2 is?
  (Mr Davis) National Insurance Recording System 2. That is it. Does that answer your question, Mr Stunell?

Mr Stunell

  65. It goes some way because it is a point that I hope we can explore elsewhere about what sort of constraints there should be on this. Granted you do not feel that Section 82 is necessary, the fact is that we have got it in legislation, so a concern of ours has to be about what constraints ought to be there which are not there now.
  (Mr Davis) If I wanted to cripple it I would say put an absolute limit on it. That is not the point of what we are after here. We are trying to get the best outcome in terms of both scrutiny and effectiveness in terms of government. If you are going to have any oversight you have got to have some flexibility in the oversight. My concern is that the oversight is not wide enough or transparent enough for the whole House on the one hand, and there is a perfectly good procedure in the form of a paving Bill procedure, on the other, and it does not, as far as I can see, add much.


  66. You are being very moderate in your language. Are you trying to tell us in any coded way that you think this particular event was an abuse of the system?
  (Mr Davis) No, Chairman, I am not trying to do that. What I think in truth it demonstrates is that the Department themselves did not know what they were trying to do with Section 82. They did not know what ought to be in or out of this procedure. That is where the £65 million came from. Then it dropped to 39 plus six. That is how those numbers came about. They did not really know what they were trying to do. They just knew that every time they had an IT project they felt under time pressure and this was a way of relieving it, with not a great deal of attention to Parliament's rights, but a great deal of attention to their own expediences.

  Mr Forth: I am always interested in thin ends of wedges, and it does strike me that we have to be very clear here as to whether we are talking about something specific or something which potentially has a much more general application. I would feel more comfortable if I thought it was specific, but I am afraid my comfort level is endangered by the fact that I suspect that this is potentially a very large wedge. That is especially so since we are talking about a complex relationship here between the roles of statute as the framework of Estimates, as a vehicle, a mechanism for what I thought was the control of supply by the House of Commons over the government, the role of Commons Committees vis-a"-vis government departments, all contained within a time line where we thought we understood the way things worked in that something was requested, authorization was granted and expenditure took place. That was the way I have been brought up in this place. Now, suddenly, the world seems to be changing. For reasons which obviously the Department thinks are important, we are being asked to go down this route. The key question for me is can we be satisfied, or are you satisfied that there would be sufficient control and accountability with which we could all feel comfortable if we were to proceed down the route that is now being suggested? Are control and accountability going to be enhanced, are they going to the lessened, are they going to remain the same? I am assuming that we think that the historical relationship between government and expenditure and the House of Commons is a satisfactory one. Let us not go into that too much at this stage. But even assuming that, what I would be very interested in is your judgment as to whether or not this is going to make things better or worse and therefore should I feel comfortable about it?


  67. Briefly, because we are going slightly broader than the questions that we are on now.
  (Mr Davis) Very quickly in a nutshell, I have already said, possibly before Mr Forth arrived, that I was uncomfortable with going away from the paving procedure in terms of the fact that it reduces transparency, it reduces the access of the ordinary Member of Parliament, and this is a matter for all Members of Parliament, not just members of the Committee of Public Accounts and the Social Security Committee. I think the practical procedure, which we have heard about already, indicates so far that as a mechanism of control it is not very good.

Mr Efford

  68. I wanted clarification on one or two things. You have outlined preliminary and preparatory expenditure, but this is neither of those from the description you gave because this was the Department asking for the ability to sign a contract ahead of Royal Assent, which is not preparatory or preliminary expenditure. I would like you to comment on that. The second point is that there were two sums of money involved, if I have understood what the Minister said to us last week. There was £6 million for internal expenditure within the Social Security Department and the figure that was given to us last week was £39 million for the IT contract. That was asked for on the basis they did not know when Royal Assent was going to be granted. As it turned out, it came through four months ahead of their worst case scenario. That is why they needed the Section 82 permission, in order to be able to sign the contract if necessary ahead of Royal Assent. Perhaps on those two points you would like to comment.
  (Mr Davis) Some of it would have fallen within all of those categories. Certainly the £6 million which was within Department involved taking on extra staff, that is an allocation if you like, and that would fall within both preliminary and maybe preparatory expenditure. I do not know what the details of it are, but certainly some are preliminary and some preparatory. The second point you have to understand is that, even as it stands now, we have procedures for the use of the contingency fund which require two things really. One is urgency. After all, that is the whole premise of this procedure. The other one is near certainty of passing into law, in other words near certainty of parliamentary procedure, which normally means that that procedure can be precipitated after second reading. I suspect the Treasury might balk a bit if the second reading won by one vote but I do not think that applied in this case. There is another procedure as well. In terms of the actual numbers we are talking about, one of the concerns I have is, sure, we ended up with 39 plus six (although we did not use the 39 as it turned out) but the other side of the coin is that it started out as something over 60, and where that number came from to this day I am not sure. Maybe Mr Kirkwood knows. It only came down to 39 plus six as an effect, as I understand it, of Mr Kirkwood's Committee which threw it back and said come back again.


  69. Mr Kirkwood, if you would deal with Mr Stunell's questions and any other observations resulting from the subsequent questions.
  (Mr Kirkwood) The honest truth is that I believe that the Department, if you pushed Section 82 procedures to their limits, could apply for Section 82 consideration every year because the Department is locked into a commercial relationship with Affinity and they are working on projects all the time. After Child Support the same platform will be rolled out to accommodate Income Support, Jobseeker's Allowance and the rest. It is sensible to do that. You asked a very important question which I have asked myself often through this procedure, whether this was a set-up, and the Department was doing it deliberately. I do not think there was any mens rea involved in any of this. I think that they were looking for extra flexibility and if they are going to do this regularly I would get very concerned about Mr Forth's question about whether this really did give us increased control because I think there is danger that it would not. I think my view would be that if we are going to use this procedure on a regular basis, based on my own Committee's experience, there would be some minimal requirements that we would have as parliamentarians to insist upon before you could have any confidence that the control is even being maintained, never mind enhanced. There would be issues, for example, like producing a more realistic timetable than my Committee was originally faced with. Getting a letter on the 3rd December saying we want this signed off by Christmas is impossible and completely unrealistic. I think the Department should have taken far more care about preparing their draft report for my Committee to consider because it did not last for two minutes when we started cross-examining them when the officials appeared to try and defend it. They have to take a lot more care about what expenditure power they already have under the Appropriation Votes and the like before they start drafting these reports in the future. I would insist that if any such Section 82 reports were taken to a Delegated Legislation Committee, that members of the Social Security Select Committee who studied the report and cross-examined the officials should be members of that Committee. As a matter of record, none of my Committee were put onto the Delegated Legislation Committee that considered the reports. I do not think that proves anything conspiratorial or untoward about that, but I do think it was impossible for us to tag our reports because of the way the Delegated Legislation Committee was structured. Contrary wise, if it was required that discussions were taken not in Delegated Legislation Committee but on the floor of the House in an hour and a half's debate, Select Committee reports could then be tagged and members who went to that debate on the floor of the House or in Westminster Hall or anywhere else, would be able to be signposted and pointed to the work that the Select Committee members had already done in the cross-examination of officials. Otherwise, I do not see there is any other way they can know or be expected to know. There might be a report in the Order paper but I would not be confident that that would be safe to rely on as a method of informing people on the Delegated Legislation Standing Committee that previous work had been done and some concerns had been raised by members of my Committee. I would be much happier, if we are going to proceed under Section 82 methods in future, if we insist, if we do not have the limits that were suggested by David Davis, on an hour and a half debate on the floor of the House with tags being placed on the Order Paper drawing attention to the Social Security Committee's consideration of the reports. I think a one and a half hour debate would give me some confidence that I was able to answer Mr Forth's question in the affirmative. Finally, I think that each and every Section 82 procedure should be followed ultimately by a wrap-up report as to what extent it was used in reality and what the implications were for the Department so that in the fullness of time user committees and we as the Social Security Committee can work out whether they were effectual at all, whether they were worth the candle, and we can build up our body of knowledge about to what extent these procedures can be used. I am very nervous that the Government will start finding Section 82 so convenient and also flexible, that other government departments will use them (a point Mr Forth makes and makes with some force). The DTI, for example, might decide they wanted to make preparations with computers for going into the single European currency. That is £10 billion going on £36 billion, if you believe the DTI report last week. This is a game that we can all play. If other departments latch on, very quickly I believe that expenditure will spiral out of the control of the legislature.

  70. I can assure Mr Kirkwood that a matter relating to IT and entry into the Euro was raised, albeit briefly, last week with the Minister. I asked the question myself whether or not any of the money that might be sought under Section 82 procedures might be used to, as it were, prepare the computer to take the software. Unfortunately, we did not get a substantial answer. I will go no further than that.
  (Mr Davis) May I add one point to Mr Kirkwood's suggestion. I have not thought through his suggestion of a tagged report in the House and a vote in the House. If we went down that route, one of the weaknesses in Section 82 procedure is because it uses the certain legislation route, it is not amendable. I think that is actually important for two reasons. One is in terms of power. The other one, frankly, I take the view that civil servants in particular in preparing these things take a much more serious view if they feel it is something where they can be given £6 million rather than £30 million, whatever the numbers might be, so if you are going to look at that, I suggest that you look at the question of amendment too.

  71. Not just the vote, but whether or not it is after ten o'clock?
  (Mr Davis) That is not a matter for me.

Mr Stunell

  72. You have given us some very good ideas and information which no doubt we shall process. Let us suppose for the moment that another Section 82 comes along in the next Queen's Speech and you are dealing with it sometime in the New Year. What lessons have you learned about the way your two Committees would operate or how you would process it, if we assume we have essentially the same system now?
  (Mr Davis) As I said before, Chairman, the Committee of Public Accounts's role in this, in a sense, is a post box at the moment. It would only be if it was something enormous that the Committee of Public Accounts would spend a great deal of time pursuing the matter or if it looked in some sense extraordinary. It is true to say that the last one did not look extraordinary except for the sheer speed. What that led us to do was to pass it on very quickly to Mr Kirkwood.
  (Mr Kirkwood) We have learned a lot from this experience. I would be expressing my Committee's view, I am sure, when I say that we would defer to the Committee of Public Accounts in terms of the financial strategy involved in all of this, but of course the Committee of Public Accounts cannot possibly be expected to have a detailed knowledge of the internal working of the Department. So I think that the working relationship we have established is that the Committee of Public Accounts will make sure that we get a maximum amount of notice of the intention to move in this direction. We will do the detailed policy study, looking at the content of the proposal, but at the end of the day your report and your consideration in the inquiry you are doing is very important. I think it needs to look at the strategic financial control of the House of Commons and that has to be a matter for the Committee of Public Accounts more than the Social Security Committee.

Mr Darvill

  73. We have already started to deal with this, but I would like to turn to the question of the possible extension of powers to other government departments. The Government has reserved their right to seek powers for other government departments analogous to those in Section 82. The Treasury has set out conditions which would need to be satisfied before it granted leave to the departments to seek such powers. Do you think that such an extension of Section 82 powers would be wrong in principle or should any such request be treated on a case-by-case basis?
  (Mr Davis) Firstly, it should be clear to the Committee that I am uncomfortable with the procedure as it now stands so I have a view that this would not be a route that improved either transparency or accountability. But if the Government insisted on going down that route, and there is some indication in their note to the Committee that that is the route they are considering, I would look very hard at the extent to which this Department, the Department for Social Security, has taken on board the lessons in the Information Technology White Paper which the Cabinet Office published this year, which was based largely on the Committee of Public Accounts' report that preceded it. I started out by saying how the weaknesses were engendered in Government IT projects. The first use of this procedure has not recognised that and I would not dream of arguing that we should look to other departments until we can see serious benefits coming from what the Government claims its procedure will deliver, and we have not seen it yet.
  (Mr Kirkwood) It is a very important question. I cannot believe that the Government will not expand the use of Section 82 procedures and I think the Committee in its deliberation of what I consider, as I said before, a very important inquiry, should bear that in mind. I think that any precedents you establish and any conditions and requirements that you set down to be implemented in future use of these procedures, should be done in a way that bears in mind the fact that other departments will start resorting to these kinds of powers in future. Therefore, I do not think you can be too careful about getting the precedents of this case absolutely right and capable of use in strengthening the scrutiny of the legislature in future in other departmental situations.


  74. In the light of the experience which you have had, briefly, particularly I think Mr Kirkwood first because have you had this experience through your own select committee, what lessons can Parliament learn about future Section 82 applications? I feel alarmed that you have indicated that you feel that other departments are likely to resort to this procedure.
  (Mr Kirkwood) I only fear that, if fear is the right verb—I think it can be anticipated that more and more government business will be done using information technology across the range of public services. Government departments and Next Steps agencies and the like will have to get engaged in the procurement of these huge systems, and therefore I think it is inevitable that other departments will be able to make use of this procedure. If you really stretched the Section 82 procedure to its limits, any Department could use it every year, in my opinion, and that is my real base fear. If there are some guidelines established about timetables, the kind of things I adverted to earlier about getting the timing right and getting the draft report that goes in front of the relevant select committee clear, if it then has got a second phase here in Delegated Legislation Committee, about which I am slightly more sceptical as I explained to you, but more importantly on the floor of the House for an hour and a half with tagged reports, I think I can see a set of procedures that would give confidence that departments would be properly held to account in terms of this preliminary expenditure. The outcome report is an essential part of that because if departments year-in-year-out come along and say, "We really, really need this. It is an emergency. It is urgent. It is a one-off special occasion", and then we start finding that six or seven out of every ten are not used at the end of the day, then I think Parliament can start saying, "Well, what is the point of bringing these things forward?" and government departments will start getting a much harder time in terms of justifying their use at all.
  (Mr Davis) One of the arguments put, certainly to us, was that the reason for the Department for Social Security justifying this procedure was the fact that they were the direct government interface to some 77% of the population, and that both the quality of that interface and the speed with which it could change to reflect government policy were critical matters. I would worry if you started to apply that argument to the Health Service, to the DTI, to whoever, because it seems to me they pick the nice soft target here and once they have the soft target in hand they can extend it beyond that. I would be more comfortable, the more I think about it, if we had a procedure which was a halfway house between this procedure and the paving procedure which, in a way, is what Mr Kirkwood was describing. Then it is on the floor of the House, it is amendable, it has got a tagged report to it, and everybody can know the issue. If it is not controversial, it will go through like that, but if it is controversial, if it were about, as Mr Kirkwood raises, European Monetary Union expenditure, the House would want to know about that. I would be more confident under those circumstances, but I would still, frankly, want to see what at the moment is just a pilot study run to the point at which the prototype's wheels do not fall off. I have to say in this last episode the prototype's wheels did fall off and were glued back on again and I do not think that is a very good precedent for any legislation.

Mr Efford

  75. I would agree, that if Geoff Hoon were to pop along to the Defence Select Committee and say, "Give us a Section 82 because I want to buy myself a new nuclear weapon," I would be concerned about that.
  (Mr Davis) You would do that under the contingency fund under the Polaris precedent!

  76. As you said yourself, the timescales and sheer scale of changes in IT do suggest that there is some justification. I was wondering if there are any areas where you think Parliament could seek further restrictions on Section 82 and the application of it and also, because there is no upper limit in terms of expenditure that can be asked for under Section 82, whether there should be?
  (Mr Davis) I have already said once that if you want to cripple the procedure, that is the way to do it. It seems to me there are appropriate areas where you have strict limits. Those are ones where, broadly, they do not come to Parliament, the preliminary expenditure type. We have them all over the place in the Treasury in different things you can do, everything from gifts you can give without parliamentary approval through to this sort of thing. I think when you come to asking Parliament's approval, it is a little odd to put a limit on what that approval can be, so long as the procedure works. A limit amounts to an admission that the procedure is no good. That is what it is, in truth. So if you accept that the procedure is no good, you might not want to limit it, you might want to just change it. My view is that limits are not the appropriate mechanisms.
  (Mr Kirkwood) I would add to that that I think there is a powerful case for limiting Section 82 to computer development simply because it is a unique process. If are you buying a nuclear weapon, I guess people know what the nuclear weapon is and what it does. If you are trying to, as David Davis said earlier, work out what the National Insurance Recording System is doing at the moment, the professionals in the DSS are very skilled at that, and then you hire in a lot of rootin', tootin', shootin', young, very bright computer boffins, they talk past one another for the first three months and there is nothing that is quite like that in any other public procurement. In my view, there could be a powerful case. I do not think that the Department for Social Security would ever contemplate bringing forward Section 82 procedure for anything other than computer procurement because the experience is that if you do not plan it properly you get very bad value-for-money or you get delays or you get both. I do not know about limits. That is more a matter for the Committee of Public Accounts in financial terms but I think there may be a very powerful case for saying a government department can only use Section 82 procedures for computer procurement.


  77. Thank you. Mr Kirkwood, a little earlier you talked about the "outcome report". What information should routinely be supplied as part of a Section 82 report? What information should be contained in the outcome report which the Minister has promised at the end of the process after Royal Assent?
  (Mr Kirkwood) The draft that they showed to our Committee and, by definition, any draft that would come in the situation where they were looking for advance approval for expenditure, would have to involve estimates. I was critical—and I think with some justification—about the levels of magnitude of money they were asking for and the money they eventually needed, but there have to be ball-park scoping estimates which give them some flexibility in terms of estimates for preparatory work. I think that one of the essential elements of the outcome report would be to confirm how much money, if any, they had used and for what purposes. There is a series of other things that I would like to see. The Department itself felt that some of the things that my Committee was asking for were a bit unrealistic, and maybe they were, and we compromised on that. That is why, although we accepted the draft report that they eventually produced, we did so on the basis of a compromise and there were some issues in the Department's proposals that we still would have liked to have gone further on. There are clear categories of things, including the timing and the amounts of money that it actually had to use, that would inform the process and make Section 82 procedures more efficient and more realistic in the future if we were able to study outcome reports from each individual case.

  78. Which really leads to me to the last question I want to put specifically to the Chairman of the Committee of Public Accounts, Mr David Davis. It really dovetails in, Mr Kirkwood, with some of what you have just said. You have suggested, Mr Davis, that items of preparatory expenditure approved under Section 82 should be identified separately in the Supply Estimates, and that to an extent dovetails in with what Mr Kirkwood has just said and some of the remarks he has just made. The Minister, who was before us last week, argued that it would not be easy to do this. Do you accept that the timing of the Estimates process may mean it is not always possible to do as you have actually suggested?
  (Mr Davis) No, sir. The reason is straightforward. Let us divide the issue into two components. That piece of IT expenditure was related directly to a new piece of legislation. A new piece of legislation does not spring fully forward to the parliamentary stage. A considerable amount of work takes place even before Parliamentary Counsel sees it. One of the problems in Whitehall is that Whitehall does not think early enough about the management of the new policy (management with a small m), about getting the software worked up, about what changes in the rules of National Insurance or whatever benefit it is, disability benefit or whatever. We see the wreckage of this down the ages from the DLA disasters under the Conservative Government through to NIRS2 today. It seems to me that we have to say to Whitehall, "You have to start thinking a little earlier about this." The policy stage should be matched with a management planning stage. That is all it needs. It means starting thinking a little earlier, not when you have a slot in the Queen's Speech programme, which is how it works at the moment, then you start thinking about whether or not you are going to put out a new contract and all of the rest of it, which is the problem today. It is really the fight for legislative time that dictates the process. I think that goes back to Whitehall's method of managing IT projects in conjunction with legislative change.

  79. Mr Kirkwood, would you like to respond to that?
  (Mr Kirkwood) I concur with what Mr Davis says.

  80. Does any member of the Committee wish to put any further questions to our witnesses. We have covered a great deal of ground. I hope they think we have covered most of the valid points on this Section 82 procedure. What about our witnesses? Were there any other matters you would like to draw to the attention of the Committee?
  (Mr Kirkwood) I just wanted to say that we were deeply grateful after our experience that you took on this inquiry because we can now have some confidence that other more objective people are looking at this. We were left with some misgivings and we are very reassured. I think your inquiry is a very, very important piece of work.
  (Mr Davis) Can I add my concurrence with that. The assumption around Parliament tends sometimes to be that the Committee of Public Accounts is omnipotent. The simple truth of the matter is that we have a vast throughput of work. We have five minutes to think about things like this from time to time and when we have discussed these matters they were in very short deliberatatives at the end of discussions back in October of last year. Although from time to time we mount a major procedure where the National Audit Office has got involved, we tend not to take the length of time over issues that you are taking over this. I also say to the Committee thank you for taking it on. It is something which is a well worthwhile exercise. You know my own view that the Estimates and Supply procedures of this House are a disgrace at the moment. This is an added weakness of that disgrace as it now stands.

  Chairman: I am sure I speak on behalf of all members of the Procedure Committee when I say to Mr David Davis, Chairman of the Committee of Public Accounts, and Archy Kirkwood, Chairman of the Social Security Committee, thank you very much for coming before us today, spending time with us, and answering so fully and directly the questions that were put to you. Thank you very much indeed.

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