|Twelfth Report, Home Officework of the Permanent Secretary (HC 928), published 18 July 2011
|Committee recommendation||Government response
|1. We have previously expressed concern about the way in which bonuses are paid to senior staff in the Home Office. We are surprised that, in a time of acute financial stringency, when major savings are being demanded from the police and elsewhere within the responsibilities of the Home Office, it is still proposed to pay bonuses to senior staff in the Department. We understand that bonuses are to be paid to the "top-performing" 25% of staff in the Senior Civil Service ranks (that is officials whose salaries are at least £60,000 a year). If paid at the same rate as bonuses in the year 2009-10 this would cost in the region of £300,000. We have seen nothing to demonstrate that this produces value for money, we have seen nothing to convince us that such additional payments are based on genuine performance measurements, and we do not believe that such bonuses should be paid at present.
||In line with the Cabinet Office guidelines set for all government departments, the Home Office has paid the top 25% of senior civil servant performers (assessed against agreed objectives in 2010/11) a non-consolidated bonus. The average amount paid to them was £5,250. The Department has spent no more than £300,000 on these payments compared with £779,000 last year. Use of non-consolidated payments helps by targeting the limited resources available to reward good performance, while ensuring that an individual is not rewarded throughout their career for single year's performance as it would be if it were a consolidated payment. And of course, such payments do not add to future pay bill costs, notably pensions.
|2. We note the work that the Home Office is doing to improve the efficiency of procurement and relations with suppliers. We expect to receive quarterly updates on the savings made by the Centre of Excellence. We were pleased to note that Dame Helen accepted clearly and explicitly that the responsibility for ICT strategy and management was firmly on her desk as Permanent Secretary. We shall keep a close watch on this area, especially in relation to the procurement and management of large-scale IT systems, which historically are among the most difficult contracts to control. We recommend that the Home Office expands the remit of the Centre of Excellence to cover all aspects of procurement.
||The Home Office Group Commercial Team, including its Procurement Centre of Excellence, has generated savings of £23m in quarter 1 of this financial year. This includes savings on previous years expenditure achieved through renegotiating price reductions on existing contracts, grouping our needs to benefit from volume discounts and stopping spend where appropriate to do so. The £23m also includes savings on new goods and services requirements generated through effective negotiations with suppliers. These savings are helping the Department achieve its CSR objectives. The Home Office will be able to provide the Committee with future updates within one month of each quarter end. The Procurement Centre of Excellence continues to expand the scope of its operation with the objective of procuring all common goods and services for the Home Office, including its Arms length Bodies through this function. The Government is supporting the police service to better work together when they deal with commercial suppliers, and therefore benefit from economies of scale. On 4 March, new Regulations came into force which, for the first time, require procurement of particular equipment to be made through specified national agreements. These regulations cover vehicles, body armour, commoditised IT hardware and commercial off-the-shelf software. From 1 October 2011, as part of phasing out the NPIA, most of the NPIA's former responsibilities for non IT procurement have transferred to the Home Office. Home Office Commercial Directorate will work closely with the police service to realise the savings that can be made from better procurement of non IT goods and services.