Examination of Witnesses (Questions 480
WEDNESDAY 24 JANUARY 2001
MR T MATTHEWS
480. There are so many tiers; this structure
is far too cluttered with tiers.
(Mr Matthews) If you are referring to the role of
the regional planning body, vis-a"-vis the Highways Agency,
the role of the regional planning bodies is to be the key point
481. If you open up that definition of the regional
planning bodies' duties and responsibilities you could overwrite
what your duties and responsibilities are, either that or you
change the structure. In some ways it is demonstrating that there
are just too many. That is my opinion on the basis of what you
have just said.
(Mr Matthews) My view is that there are not too many,
but that may be a debate about the structure of the regional planning
bodies. The regional planning bodies do not infringe on the major
areas of responsibility of the Highways Agency.
482. You are getting in deeper and deeper. What
we want to know are the priorities, who fixes the priorities and
how they link in with the local authorities. I am not at all clear.
(Mr Matthews) As far as major schemes are concerned,
the priorities are increasingly being set through the medium of
the regional planning bodies and that is where Ministers will
be looking for advice. Our responsibility in that regard is to
ensure that the regional planning bodies and the officers which
support them have appropriate
483. Can we just look at the efficiency of your
Agency then? Can you tell us how much it costs to introduce resource
accounting and budgeting?
(Mr Matthews) Different area. There are two separate
aspects to this question. The initial work undertaken by the Agency
between 1994 and 1998, was really to establish what had traditionally
been old Civil Service/Government ways of counting cash onto a
commercial accounting basis.
Chairman: Yes, this Committee understands how
resource accounting works.
Mr Donohoe: Who was responsible for that element
in that period of time and are they still in employment as far
as the Agency is concerned? It looks as though there has been
a tremendous waste of public resources as far as the introduction
of this is concerned and indeed the PCS has mentioned that that
was perhaps one of the worst examples of financial management.
You told us earlier about all this structure with a multitude
of layers within it and here we are at the centre of looking at
your accounting and budgeting to find a situation which does not
demonstrate an awful lot of worth as far as public spending is
concerned, does it? It is a nonsense. Somebody in this system
should have been disciplined for that. Were they?
484. Was it really £13 million?
(Mr Matthews) The total spend to get resource accounts
in place in the Agency was about £14 million.
485. So the first contractor was not paid £13
(Mr Matthews) No. If I may explain the stages in this,
the original stage between 1994 when the Agency was set up and
1998 when a consultancy contract was let was expenditure of just
over £7 million.
486. You are telling us that is by the Agency,
that is before the contractor came in.
(Mr Matthews) That was by the Agency but it involved
employment of contractors as well as permanent staff. Contractors
and consultants were employed as part of the Agency's team before
the initial setup.
487. So it was not before the contractors came
(Mr Matthews) It was before the main contract.
488. You managed to spend £7 million before
you gave out a contract.
(Mr Matthews) There were stages. Initial work was
done for the first three and a half years which was managed in-house
by the Agency, but that involved the employment of a number of
different consultants and contractors.
489. How much of the £7 million was for
people from outside?
(Mr Matthews) I do not have the breakdown of all of
that expenditure. The majority was by in-house staff.
490. Do you think that was good value for money?
(Mr Matthews) In retrospect, having reviewed this
when I came in, the systems and developments which have taken
place were probably value for money. What was disappointing and
in retrospect not managed carefully was the time it took.
491. How was that first contractor appointed?
(Mr Matthews) The first consultant in 1994 was appointed
by the then Finance Director to advise him.
492. Was it after a good lunch?
(Mr Matthews) I do not know the precise process by
which that person was appointed.
493. You are being asked a serious question.
Did it follow the normal rules of appointment?
(Mr Matthews) Yes, as I read the files, there was
an open competition and selection process for that initial appointment
of one of the consultants who was involved.
494. Was there a tender process?
(Mr Matthews) No, this was an appointment of a member
495. Was it a friend of the Finance Director?
(Mr Matthews) He was somebody who had previously worked
with the Finance Director, yes.
496. So he was a friend of the Finance Director
and it did not follow the normal procedures and it cost £7
million before you brought somebody else in.
(Mr Matthews) No. The person was appointed after open
497. He was or he was not? You have just confused
me. Did this follow the normal procedure? Was this someone who
was known to the Finance Director? Was it a perfectly open tendering
(Mr Matthews) It was a selection of an individual
rather than a tendering procedure.
498. So it was done on the basis that it was
somebody the Finance Director knew.
(Mr Matthews) But it was a selection process which
I understand was advertised openly.
499. Would you have done it that way?
(Mr Matthews) It is difficult to know what I would
have done six years ago but my practice professionally for all
senior management posts is to be very clear whether I am appointing
a member of staff or appointing a contractor. If you appoint a
member of staff you have a proper senior civil service selection.