Select Committee on Public Accounts Minutes of Evidence

Examination of witnesses (Questions 80-99)



  80. So the first five months was because you were surprised and you were offering the papers. It took five months before you even went to the department?
  (Dr Perry) No. As I have said previously, the actual time to the giving of the permission was four months and the other two months was actually making physical arrangements. From the time that the NAO—

  81. Three months arguing about it and then a month later to the department and two months making physical arrangements?
  (Dr Perry) Something like that[3].

  82. Could I ask the C&AG, would you normally expect to take two months to make arrangements to go and visit somebody?
  (Sir John Bourn) No.

  83. Thank you. In future if a request of this sort came through again, how quickly would you expect to give permission? Would you, in particular, expect to have to go to the department again on each occasion?
  (Dr Perry) A lot depends on the circumstances. There is a presumption that in pursuit of sector-wide studies and efficiency studies and value for money studies that we clearly recognise the NAO's rights in this and that would happen by return of post. In other areas it depends on the circumstances. There is one particular case at the moment where we are working with the NAO where I think the permission took less than a week.

  84. If there was a fraud investigation, would you expect to be able to give permission in a week?
  (Dr Perry) I could not say in advance how long it would take, or indeed what the Corporation's attitude would be, because it depends on the circumstances of the case. What I cannot do is fetter the discretion of the Corporation because it is the Government's view that there should not be an automatic right, therefore I could not say in advance there would be an automatic right.

  85. Are you saying that the fact there is no automatic right means that you would always have to go back to the department to discuss it and that month would always occur?
  (Dr Perry) No, I do not think I would need to say that but I do have to say that the Corporation would have to consider the issues raised in the absence of this automatic right.

  86. You said in answer to something else Mr Griffiths was asking you that you would not expect to be able to send out lists of people you thought were incompetent, or who had been shown to be incompetent, unless there was a criminal case against them. Is there not a case to be made for saying that there are a lot of people who can be proved to be incompetent without necessarily being criminally incompetent and that you have some sort of duty to your housing associations to make sure that a list is available of those who have proved themselves incompetent?
  (Dr Perry) I might need to consider that. I would say that we could be on very dangerous ground because people's reputations who were damaged might seek to challenge that.

  87. Presumably you could give people the facts of the case that, as appears to have happened in this case, one particular valuer went on and on and on valuing houses at a price which was above what anyone else would have valued them at. At least you could give that information to people, you do not necessarily have to call them incompetent, you just say that this has happened and other people might like to pay attention to it.
  (Dr Perry) The problem with valuation is that it is probably one of the worst examples for us to choose because valuation is a notoriously inexact science. I think the report itself does make the point that whilst clearly there was something going on which was reprehensible, in practice it is very difficult to pin down what should be the true valuation of a property at any moment in time, although certainly you can spot a pattern if somebody is consistently trying to buck the market. On the question of circulating lists of names, I know in my previous job as a Local Authority Chief Executive that even with suspected child offenders you had to be very careful what you said about who and to which persons.

  88. Can I turn to Mr Clark for a few questions. When appointed, Mr Clark, you were apparently not informed about the previous allegations about Hartshorn, is that correct?
  (Mr Clark) That is correct, yes.

  89. Yet you were informed later on in that year, a month or two after you took up the appointment, by an officer of the Corporation that there was some query hanging over this particular person?
  (Mr Clark) That is correct.

  90. And on that occasion you talked to your Operations Director, the person who has since gone but went before this all came about?
  (Mr Clark) Yes.

  91. This person gave you his or her view that Hartshorn was quite okay?
  (Mr Clark) Yes. The allegations were very general about his dishonesty which made it very difficult to investigate myself. I raised the general issue with the Operations Director and he assured me that he believed John Hartshorn was honest but agreed that he would keep a closer eye on him.

  92. That was the only person you consulted about this?
  (Mr Clark) Yes.

  93. You did not ask the man's direct boss, the Development Director?
  (Mr Clark) No, I did not. The person I spoke to was the person who reported directly to me.

  94. What references had Hartshorn been given when he came to Focus?
  (Mr Clark) John Hartshorn came to Focus as one of the founding associations. He was already working for Hestia Housing Association before Focus was formed. I think he had been there for something like ten years.

  95. Presumably you would have had a personnel record on him which would have held his references?
  (Mr Clark) Yes. My recollection is that he came with a reference but I would have to go back and check that and provide a written answer.

  96. Did you check his references at the time?
  (Mr Clark) In June 1994?

  97. When you were warned that he might be dishonest?
  (Mr Clark) No, I did not.

  98. Given that he had apparently left his previous housing association under a cloud, might this not have shown up something?
  (Mr Clark) It might have done but, as I said, the briefing which I received from the officer of the Corporation was quite vague and at that time I did not think anything beyond talking to his superior was the right course of action.

  99. Is it not a fairly simple thing to do, to check somebody's references if there is some query over their honesty? The first thing you would do is go and see if anybody had queried this in the past in their personnel file.
  (Mr Clark) As I say, at the time the briefing I received was by way of general warning about this person.

3   Note: See also Appendix 1, page 17 (PAC 1999-2000/296). Back

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