Select Committee on Public Accounts Minutes of Evidence


Examination of Witnesses (Questions 380-399)

SIR RICHARD MOTTRAM KCB AND MR DUNCAN HALL

MONDAY 4 MARCH 2002

  380. This is a Board that met in secret, did the other UDCs meet in secret as well?[13]

  (Sir Richard Mottram) I do not know the answer to that. Can I find that out for you?

  381. A point was made by Mr Hall earlier on that the Department were fully aware of what was going on. I want to, if I can, turn to paragraph 5.3 about the Director of Regeneration and Allocation, "The Regional Director of the Government Office liaise directly with the Corporation Chief Executive and Chairman on an informal basis as and when required". To me this does raise questions about the competence of these civil servants, are they still in post?
  (Sir Richard Mottram) I do not know, I have to find out. Probably not. I will find out.

  382. I must confess I tend to hope not. It is presumably one of their main tasks, or ought to have been at that time, to supervise the work that was going on in the industry. This was a government flagship project, for them to adopt a hands-off position would have been negligent, would it not?
  (Sir Richard Mottram) What they were supposed to be doing was monitoring the performance of this body within the framework of governments operating within it. By definition as a non-departmental public body it operated at some arms' length from government. That was the purpose of having it in that status.

  383. I do understand it is a difficult one. I used to chair the Government Initiative on a much smaller scale, it is the same concept of public money going into regenerate an area in a way that normal mechanisms could not. There was always a tension between bureaucratic rules and getting things done. They do seem to have missed a lot, the regional directors, and all of the rest of it, particularly since Mr Hall has said that the Department was fully aware of everything.
  (Sir Richard Mottram) As the Report shows the Department was not fully aware of everything. We can go through that, I am not proposing we should do that.

  384. Can I clarify the question of the Department backing down in the face of the threat of the resignation of the Chairman. It seems an incredibly huffy attitude from the Chairman, if you investigate this in any way I will take my ball and go home.
  (Sir Richard Mottram) It was the particular context, as I understand it, of an external investigation, so to speak. We did go on investigating the cashflow of the Corporation.

  385. An external investigation, which presumably would have brought in qualified, uncompromised professionals was going to be the subject of resignation. Another internal examination by the Department, would it be fair to draw the inference that they could wrap you round their finger? Does that seem fair?
  (Sir Richard Mottram) No, I do not think it is fair. The Department itself was relying often on external professional advice.

  386. I have drawn the same conclusions as some of my colleagues, that is this whole exercise was so politically compromised the Department was not able to apply normal rules. It was assumed that the Chairman in particular and the Chief Executive had such close links with the Prime Minister they were effectively untouchable. Is there anything in here that would lead me to believe that that is an incorrect assumption.
  (Sir Richard Mottram) I have a slight difficulty in that I was not focussing on this in the years in question. I have a slight suspicion that the then Prime Minister did have more things on her mind than the Teesside Development Corporation and by 1996 I have a feeling she was not the Prime Minister, if that is the person we are alluding to I do not think it stacks up.

  387. Do you think they were reasonably well connected at all?
  (Sir Richard Mottram) I have no idea.

  388. Would I be right in thinking that all of this would not have come out in the way that it has were it not for the consistent, dare I say, heroic action of three MPs continuing to plough this furrow year after year, after year. If they had not kept going on about this we would not be here today?
  (Sir Richard Mottram) That is possible. As I said earlier, we, ourselves, produced internal audit reports that related to these matters that were available to the National Audit Office. Whether it would have been pursued in this form is something that I cannot answer.

  389. I have one of the internal audit reports here and having read it—I only got it out of library today, so I have not gone over it in detail—it does seem to me to be an absolute white wash. If I can refer you to one section to do with the shredding of documents. "We have no doubt last year's shredding of documents did take place. In the run-down of such an organisation it is inevitable and quite proper that papers and files with no long-term use should be whittled down. It is now impossible to prove what was destroyed. We do not have any eye-witness account of the actual destruction of any important document, therefore, it is impossible to prove this took place". The National Audit Office discovered, "we were unable to find key information, such as marketing and disposal files and contract files with developers and contractors amongst the files left by the Corporation". There does seem to be a contrast here. I put it to you that that was not investigated with the vigour that perhaps it might have been?
  (Sir Richard Mottram) I put it slightly differently, I think the amount of effort which is put into each individual internal audit report from my Department is probably less than the amount of effort that the NAO put into this report.

  390. That is probably the most generous way of putting it. What it means to us though is that internal audit reports from the Department itself in a sense are not worth a candle for our survey, are they? You had one here. For reasons which I understand and which you have explained, it did not get very much at all and had it not been for something else we would not have got all this, and therefore we should never again be reassured by an internal report of a department.
  (Sir Richard Mottram) This is an internal audit report into Dr Ashok Kumar's allegations. It is not the only internal audit report we did on this Corporation.

  391. So the other ones were better?
  (Sir Richard Mottram) I am not saying that one was poor. It is not the only internal audit report we did on this Corporation.

  392. So did the other ones discover all the other things the National Audit Office discovered?
  (Sir Richard Mottram) They certainly identified issues about the wind-down of the Corporation.

  393. Would they have come to light with us had it not been for the National Audit Office and the three MPs complaining?
  (Sir Richard Mottram) I do not know because that would be a matter we would share with the NAO. Probably not, in the sense we had taken action in relation to the wind-down.

  394. So you had sorted it out?
  (Sir Richard Mottram) No, we tried to sort out the mess we had found.

  395. I understand that. In terms of meeting local MPs, Mr Hall, I understand you refused to meet Ms Taylor on a number of occasions.
  (Mr Hall) I simply do not recall that.

  396. You do not recall refusing to meet MPs. That is interesting. I wonder if I could turn to the question of your bonus. Given what has happened now and all this that has come out, do you not feel a certain moral obligation to repay some of it?
  (Mr Hall) I think the matter of my performance review payment was resolved in 1998.

  397. I think most people reading this Report would think your performance has been an absolute and utter disgrace and would want to have the money back. Is there any mechanism by which we can do it, do you know?
  (Mr Hall) I have no idea.

  398. There is one question I want to clarify, it is whether or not in a sense you are just a fall-guy for the Chairman or whether or not you were co-conspirators or whether or not the Chairman was a bit like this legal firm which we think is just a tame firm. Can you clarify your relationship with the Chairman for us?
  (Mr Hall) The thing which the Chairman and I shared in common was an utter commitment to see the regeneration of Teesside.

  399. Are you suggesting there was anybody on the Board who did not share that view?
  (Mr Hall) No, but you were asking me about—


13   Ev 34-35, Appendix 1. Back


 
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