Examination of Witnesses (Questions 80-99)|
WEDNESDAY 28 NOVEMBER 2001
80. Why not? I do not understand why you have
(Mr Stoker) I have looked into these powers. I must
confess I do not know why this power has never been used. As a
matter of fact, it is not the case that the cost of the audit
would fall on to the charity, rather it falls on to the trustees
themselves. I suspect that historically, going back to 1993 and
the periods following the Act, that may be part of the reason.
81. Okay, but the point I was making was the
cost of external auditors would not fall upon yourselves and the
budgetary implications are not for you. If the trustees are going
to be required to pay for the external auditors that would certainly
concentrate minds. I wonder how it is you are head of an organisation
which has not used a particular power? You have not said this
is a useless power?
(Mr Stoker) No.
82. And I made the point I think it is a very
wonderful one, maybe, and you have not contradicted that either.
I do not understand why you have not asked the question and I
do not understand why you have not issued an edict, if it is within
your power to issue such things, to ensure that power is utilised
in the future.
(Mr Stoker) Edicts are perhaps not quite the modern
style these days but certainly the very clear message that we
have sent out for all these powers is if there are cases where
they will help to close inquiries that people should use them.
For example, if you look at powers such as the power to appoint
a receiver and manager there is an increase in that in the last
year in the figures here and that increase is being sustained
into the current year. We are also running at high levels in the
year to date on orders to attend meetings and provide information.
It is those kinds of powers, the ones which are actually there
to break logjams and speed things up, which I agree with you we
ought to use where they are appropriate.
83. Perhaps you would go away and ask the question
that you have not asked so far, why you have not used that power.
(Mr Stoker) I have asked the question, I have not
been able to find out the answer.
84. Perhaps we ought to go back to old-fashioned
mechanisms like issuing edicts. You said it was old fashioned
or was not the current vogue but perhaps if you were to issue
edicts you might get answers to the question you have asked and
have not had the replies to. I guess my time is running out fairly
quickly but I want to go back to the ICR, the Independent Complaints
Review. I take it that managers use complaints to guide them in
terms of internal procedures, or to make it possible to identify
where there are break downs in the system if one uses it in an
appropriate way. The Reviewerthis is a very interesting
document that we have just received dated November this yearreally
says that your staff react to complaints in an old-fashioned way
and they tend to regard complaints in a negative way. It says
it in a very gentle way. It says that other public bodies might
react in such a way. I think the implication is your staff are
reacting that way. It goes on to make the point Mr Williams made,
that you do not even log most of the complaints and there needs
to be a massive culture change in your organisation, which you
are attempting to achieve. Mr Williams put it to you that you
ought to consider reviewing all the verbal complaints as well
as the written ones. That was not a novel proposal, was it, since
the ICR has made this suggestion to you in writing? Why have you
not been able to respond to the Committee and say "that is
precisely what we are doing"?
(Mr Stoker) I do not think that what Mr Williams said
was that we should be reviewing all of the complaints that were
put to us verbally, I think what he was saying was we did not
count them, and I agree.
85. I think I said you should be recording them
and it is not a novel idea at all, this was suggested here, and
it seems like a very useful suggestion. It might guide you as
to where there are defects in your organisation and areas which
might be improved. Why did you not say "this is something
we are going to do"?
(Mr Stoker) As Mr Williams invited me to, he said
do not agree now but go away and have a look at it and I am very
happy to do that. The other thing to bear in mind is that this
whole complaints system is a new system and it is a pilot that
we introduced because we wanted to improve our relations with
and our accountability to our customers. I am not pretending that
it is perfect yet but I am very happy to go away and look at ways
that we can get the measure of recording these complaints.
86. Is this an experiment that should be continuing
beyond the two years then?
(Mr Stoker) Yes.
87. Good. Finally, you have established a committee,
which I think is a good idea, no doubt an innovation that you
introduced, to review the results of ICR reports and recommendations
with the view of trying to identify lacunae in management. I just
wonder what lessons you have already learned from those reviews
since this committee seems to be in place already?
(Mr Stoker) I think the main ones would be that you
avoid trouble if you are as clear as possible up-front about exactly
what you can do and what you cannot do. You need to avoid creating
expectations on the part of anybody involved, whether it is a
complainant or anybody else in the process, which you cannot fulfil.
88. They are methodological, are they not? Both
of those two lessons learned are methodological as to how you
deal with complaints. I think I am to finish.
(Mr Stoker) Sorry, they are not how you deal with
complaints, they are how you deal with the cases that gave rise
to the complaints in the first place. What you tend to get is
somebody who was led to believe that you can do X for them and
you can only do X minus Y for them.
Mr Trickett: If I had another two minutes we
could have had some interesting conversation but I have not.
Chairman: If you are desperate, Mr Trickett,
have one more question.
89. The ICR is there, they made a report to
make it into a committee which you have established, and the purpose
of establishing the committee was to try to identify management
problems and I do not think you have indicated to the Committee
that you have learned anything from that process at this stage.
(Mr Stoker) I think we have learned a good deal and
we do feed back information from those complaints from the ICR
directly into the casework and the Report does say in the Independent
Complaints Reviewer's own words that she had been very impressed
by the extent to which she has seen lessons being learnt.
Jon Trickett: I do not know if that is exactly
what she says but, anyway, I really must not press the Chairman's
patience any longer.
Chairman: Mr George Osborne?
90. Can I pick up on an area of questioning
which Mr Trickett was exploring with you, which is the use of
your legislative powers. I find it rather extraordinary that you
did not know why the use of these powers had declined or why,
for example, you had never used the power to appoint an external
auditor. Am I correct in saying, and is the Report correct in
saying at 2.15 that you have never used the power to reclaim charitable
trust assets from debarred trustees, or to prosecute for failure
to provide information?
(Mr Stoker) Yes, if it is in the Report it must be.
We have pursued by other means assets from trustees whose conduct
of their charity has been unsatisfactory. That is very largely
what case one is about.
91. There are other powers. You say you have
used other means. Table 10 shows "The Commission's use of
inquiry powers" and shows a dramatic fall in virtually every
power with the exception of the first one, a fall in the use of
the power to remove trustees from 9 in 1996 to 4 times for 2000-01,
down from 89 to 21 in trustees prevented from acting, down from
58 to 39 in freezing bank accounts, down 19 to 8 in trustees appointed,
down 238 to 171 in orders and directions requiring information
or presence at a meeting. Why are you not using these powers?
(Mr Stoker) The message that we are trying to hammer
home to the people who are at the case level using these powers
is that where they will help to resolve a case and resolve an
issue they should use them. In some cases, for example receiver
manager appointed and, for example, orders and directions requiring
information and attendance at a meeting, that message is producing
an increase in the powers. At the moment we are running at a level
which would produce a considerable increase when the numbers for
this year are compared with last year. I cannot pretend that there
is a systematic reason that I can identify why these powers have
not actually been used. I can speculate that part of the picture
along with the messages we are giving about closing cases is the
fact that we have just had the Human Rights Act and, along with
everybody else, the organisation has been considering what its
obligations are under the European Convention on Human Rights.
There are a great many of these powers, particularly when you
are talking about suspending or removing an individual trustees,
which are slap bang in the middle of ECHR territory and the fact
that, to reflect that, we have been putting separation of powers
of one kind and another into the systems as good practice post
HRA may have some influence, I do not know. What I would like
to see is an increase in these powers to close cases when that
can be done and that is the message I am getting from the current
92. You just said you are speculating that it
might be the Human Rights Act, you are not sure and so on. When
you were appointed two years ago you surely read this Committee's
report into the Charity Commissioners. On Appendix 2 which helpfully
summarises it, it includes conclusion (i) where it talks of the
"failure to show more drive in exploiting the opportunities
for greater effectiveness which the 1993 legislation provides"
and it says that this is a result of a lack of management grip.
You were the new manager, you came in, you must have seen that;
why do not you know the answers to these questions?
(Mr Stoker) There is no single answer, I suspect,
to the reason why these powers have not gone up. All I can say
to you, as I said earlier, is that it is not because of the management
messages that we have been sending, it is not because of any lack
of commitment to effectiveness in investigations work, as the
fact we made it a priority for resources (£1 million pounds
extra from next spring) and a thorough review and thorough improvement
of procedure shows. This is part of the picture. It is part of
the picture that I am not myself entirely happy with but I do
not think that it is symptomatic of any kind of lack of commitment
to effective investigations.
93. So you are saying there is no lack of commitment
from the management, that you are sending down these messages
down your organisation but you are not sure why these messages
are not getting through to the people you employ?
(Mr Stoker) We are finding out why. As part of the
work that we have done on the investigations systems we have got
a project team which is following through the implementation of
the investigations manual. As part of the work involved in that,
it is looking at a range of closed investigation cases to analyse
them to see what the drivers of a lot of this are. I am hopeful
that one of the things that will come out of that is something
which will shed more light on not so much why these powers have
not been used in the past, although that is an important question
and of interest, but more where they might have been effectively
used where they have not been and that gives us a management handle
to do something about them. I cannot give you a plain, straight,
single reason why these figures are as they are.
94. It would be good to know that we are not
wasting our time by passing laws that are not then used by the
organisations they are designed to be used by. Is this general
approach because you as an organisation take a very softly softly
attitude to investigations? In paragraph 2.12 on page 20 the NAO
says: "Our case examination found that the majority of inquiries
were conducted through correspondence, telephone calls and meetings
with officials of the charities concerned. When inquiries included
visits to charities, they were generally confined to meetings
with trustees and other key personnel and in only a very small
proportion of cases did they also carry out checks of control
systems and file searches." So you sit round, have a cup
of tea with trustees, you are satisfied with what they have said
and you do not carry out a proper rigorous investigation. Presumably
by the time you have turned up at the charity you have got reasons
for suspicions. Is this not an extraordinary approach to take
to matters of this seriousness?
(Mr Stoker) I do not think that is a generally correct
description of the attitude the investigators took towards charities,
the one you have just given of a `cup of tea' culture. I accept
that there was a need for more rigour and structure to be put
into investigations procedures. I accept that as part of that
what was needed was a more rigorous approach to case planning.
I accept that what was needed was a more structured approach to
making investigations officers consider what specialist professional
support they needed from accountants and lawyers and that is why
we have done precisely those things in the investigations manual
which we have put into place from October last year. As for the
cosy position with charities, I think the more indicative point
of our current approach to this would be that since October 2000
we have for the first time starting putting a public report on
the web site of the findings of each inquiry that we have carried
out, precisely so the charities are exposed to public scrutiny
and so that the lessons get put across publicly.
95. Thank you for that answer, although one
of my concerns is that your information manual, rather like your
instruction to make more use of legislative powers, may not deliver
results down on the ground, you may not be aware it is having
an effect because you have this strange management structure where
you do not even know the results of your management decisions.
(Mr Stoker) We are an extremely quantified organisation.
We have got a great many quantified targets which you will find
in the appendix to the Report and, as I mentioned, one of the
things we have done as part of the investigations project is precisely
so that there is structured follow through, as well as keeping
track of what is happening in the management line, we have actually
put in place a development team to work on the implementation
of the new procedures and to analyse what actually has been happening
in cases that are being closed. I accept that managers need to
know what is going on; that is why we are trying to find out.
96. I am glad you are trying to find out.
(Mr Stoker) In a structured way.
97. Rather than in an unstructured way. I am
glad you raised the issue of targets because if you turn to Appendix
3 which is on page 39 of the Report, this sets out your various
targets and how effective you have been. If you look at the top
box in the report which is Objective One, it is "to ensure
that charities are able to operate for their proper purposes within
an effective legal, accounting and governance framework".
Could you tell me in that last column "target met Y/N"
how many of the nine targets you failed to meet?
(Mr Stoker) How many of the nine targets?
98. There are nine targets in box one Objective
One set out at the top of Appendix 3.
(Mr Stoker) The difficulty I am struggling under,
Mr Osborne, is in this light without my reading glasses I cannot
read very easily but it looks to me like four nos and five yeses.
99. So you have a 50/50 hit rate with your targets?
(Mr Stoker) If you look at the targets as a whole
you will find there are 32 of them, we hit 23 of them and were
within five per cent of another three. One of the ones we did
not hit was the forecast number of registrations which the NAO
in the discussion of how we have been putting a more rigorous
approach into registration would say was not a tragedy to miss
that one. So I think that takes you to a slightly different proportion.