Examination of Witnesses (Questions 380-399)|
MOTTRAM KCB AND
MONDAY 4 MARCH 2002
380. This is a Board that met in secret, did
the other UDCs meet in secret as well?
(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
(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
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 itI only got it out of library today,
so I have not gone over it in detailit 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
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
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