UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE
To be published as HC 1751-i

House of commons

oral EVIDENCE

TAKEN BEFORE THE

Home Affairs Committee

work of the Permanent Secretary (april-december 2011)

Tuesday 17 January 2012

Dame Helen Ghosh DCB

Evidence heard in Public Questions 1 - 63

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Oral Evidence

Taken before the Home Affairs Committee

on Tuesday 17 January 2012

Members present:

Keith Vaz (Chair)

Nicola Blackwood

Mr James Clappison

Michael Ellis

Lorraine Fullbrook

Dr Julian Huppert

Steve McCabe

Alun Michael

Bridget Phillipson

Mark Reckless

Mr David Winnick

________________

Examination of Witness

Witness: Dame Helen Ghosh DCB, Permanent Secretary, Home Office, gave evidence.

Q1 Chair: Dame Helen, thank you very much for coming to give evidence to this Committee. This is part of our normal meeting with you to look at the work of the Permanent Secretary. The last time you were before the Committee the Home Office was engulfed with the issues surrounding border control. Is that now all under control as far as you can see?

Dame Helen Ghosh: The Committee heard from Rob Whiteman recently about the steps that he has taken in the agency to focus on compliance and to restructure his senior team to ensure that not only are the controls that Ministers wish to happen happening but that we get good management information about what is going on. For example, his six-hourly reports are being translated into weekly reports to myself and to Ministers about what is happening there. We await the outcome of the inspector John Vine’s report into the events to see what lessons are to be learnt and indeed the report of this Committee in terms of taking action forward, but I am sure you will have had a strong impression from Mr Whiteman about the energy with which he is approaching the overall task of improving the performance of UKBA and of the Border Force.

Q2 Chair: Indeed. Have you been interviewed by John Vine in respect of this inquiry?

Dame Helen Ghosh: I believe my interview is later this week.

Q3 Chair: So we don’t expect a report from Mr Vine-you have obviously made some inquiries about this-for some time if he is only interviewing you this week, or do you have a timetable?

Dame Helen Ghosh: I believe when the Home Secretary commissioned the report the target date that was announced then was towards the end of this month, so that is the sort of timetable towards which Mr Vine is working.

Q4 Chair: Thank you. In respect of the number of jobs that are going to be lost at the Home Office as a result of the spending review, how is that progressing? How many people have gone now from the Home Office since the CSR was announced?

Dame Helen Ghosh: We began, broadly speaking, with 31,000 staff in the Home Office under David Normington’s leadership and the object-

Q5 Chair: Could we put a date on that perhaps? Under his leadership? He was providing leadership for some time.

Dame Helen Ghosh: I think that is at the beginning of the SR period. So if you take that as the baseline-

Q6 Chair: Can you tell the Committee what year are we talking about?

Dame Helen Ghosh: That will be 2010-2011. That is where we began, 31,000, and we have to get to 24,500 by March 2015. Of that, UKBA has to go down from just over 23,000 to 18,000. As of the end of November, which is the last data for which we have firm figures, we were at 28,500. In 2010-2011, the first year we are counting, we lost 2,600 staff. A number of those, of course, had been working on the ID cards that were scrapped. In the current year we have so far lost 2,400 and we are expecting around another 300 between now and the end of the financial year. We are probably planning, as a mixture of voluntary departures and-terrible term-natural wastage, that is people who just in the normal course of events decide to move on, another 700. We think we are ahead of our profile in terms of what we were expecting in staff reductions.

Q7 Chair: In terms of the performance, it has not altered as a result of losing 3,000 posts?

Dame Helen Ghosh: No. As I think I have said to this Committee before, a number of the reductions in staff were reductions that would have happened anyway. Obviously ID cards is a clear example, but the kinds of efficiency improvements that are taking place at UKBA, particularly around the introduction of integrated case working, the ICW programme, which automates some functions, and the overall decline, for example, in the number of asylum applications we are getting. So a combination of factors, technology, demand, and obviously over time, more broadly on the immigration side, reductions in numbers, means that in any event we would not have needed so many people by the end of the period.

Q8 Chair: Sure. We have just heard from Keith Bristow, the new head of the National Crime Agency. When do you think the Home Office can give him an indication as to what his budget is going to be? He is obviously keen to get his team together.

Dame Helen Ghosh: Indeed he is, and we are working very closely with him on this. As you know, there are a number of stages. We need the legislation, and we await decisions on the legislative timetable, and vesting would not be until towards the end of 2013. We also need to decide-as you picked up in your last question, Chairman-precisely what the scope of the NCA will be. That is still under discussion and Parliament will obviously have its view. The starting point, as he said, is that it will be, broadly speaking, the budget that SOCA and any other constituent groups who we know now are coming in will have. In the course of this year, and in setting our overall budgets for 2013-14, we will have to clearly reach a final view, so we will have to have a view by end of this calendar year.

Q9 Chair: Yes, of course, because it is starting on 1 April 2013?

Dame Helen Ghosh: No, I think the vesting date is likely to be later that year.

Q10 Chair: Is that something new you are telling this Committee?

Dame Helen Ghosh: No, no, this is just on the assumption of-

Q11 Chair: So the NPIA will be abolished at the end of this year?

Dame Helen Ghosh: At the end of 2012.

Chair: It will cease to exist?

Dame Helen Ghosh: Cease to exist.

Q12 Chair: SOCA will cease to exist when?

Dame Helen Ghosh: When the NCA is vested. I am sorry, what I am not going to do is anticipate the parliamentary timetable.

Chair: No, of course not. I am just asking for some kind of idea.

Dame Helen Ghosh: We have to wait for the necessary legislation to go through.

Q13 Chair: So basically we don’t know yet?

Dame Helen Ghosh: We don’t know yet because it really depends on the parliamentary approval. Clearly we can’t vest an organisation until Parliament is happy. It depends when the Bill is introduced, how long it takes, how long the second session lasts, so that is-

Chair: But you hope it is going to be by December-

Dame Helen Ghosh: We certainly expect it to be by the end of 2013 and obviously if we could do it sooner we would. But that means we don’t need finally to decide on the budget until later this financial year, as we will for all other functions in the Home Office.

Q14 Chair: But the changeover in an area like serious and organised crime is going to be very important indeed because the serious and organised criminals are not just waiting for vesting day, are they? They are carrying on doing their serious and organised crime.

Dame Helen Ghosh: They certainly are carrying on and that is why we need to make sure that the transition is absolutely smooth, which is why, for example, Trevor Pearce, the Director General of SOCA-I think Keith mentioned this-is heading up the Economic Crime Co-ordination Board, already bringing to life the idea of the kind of collaboration we need between SFO and so on. They will begin to do some joint operations even now. We don’t need to wait for the NCA before some of that collaboration begins.

Chair: Of course.

Q15 Mr Clappison: I want to ask you about procurement savings that you have planned ahead. Before I do that, could I ask you about one fact that we have been briefed about from the annual report on consultancy services, which tells us that spending on consultancy services was reduced by over 60% between 2009-10 and 2010-11, which is no doubt a good thing but it rather begs the question of how it came to be that so much was being spent on consultancy services in the first place and what lessons have been learnt from that.

Dame Helen Ghosh: Certainly. As you say, we have achieved a very good reduction. Again, to be completely honest, one significant element in that is that the identity card programme was absorbing an awful lot of consultancy spend, but what we have been doing, and you will see a further reduction this year, is a number of things. First of all, to look at whether we need to use consultants or whether we could use permanent civil servants or short-term contracts. We have done that on a number of our projects. We also need to make sure that when we are hiring consultants we get the best possible price and so our commercial team, in consultation with Francis Maude’s team in the Cabinet Office, make sure that all Departments are getting the benefit of what they call aggregation, that is when we are all buying consultancy services from the key companies we get the best possible rate.

A result of just a reduced demand and a better price means that we think this year we will probably go down further to perhaps around £33 million over the year.

Q16 Mr Clappison: Do you have similar ambitions to make procurement savings in other areas?

Dame Helen Ghosh: Absolutely. In my not quite most recent letter, one of my letters to the Chairman towards the end of last year, I described what savings we were achieving this year in terms of savings from procurement and I think by that stage we were totting up around £33 million in the latest list I sent you of savings. But of course our savings-

Q17 Chair: £33 million in 2010-11?

Dame Helen Ghosh: No, in the current year. I am just reporting to you as we go along this year how much we are saving this year.

Chair: Excellent.

Dame Helen Ghosh: To put this in context for the Committee, and if you take where we have got to so far in our budget this year, so far this year overall we are showing a significant underspend on our budget. That, of course, is a result of a number of things, a number of factors. Some of that is procurement, good procurement; some of that is reduced demand, so a significant amount comes from a reduction in asylum support costs; some of it is that we are just not paying as many people. At this point we are slightly ahead of the curve we were expecting on staff reductions. That then frees up money both to carry forward into 2012-13, which is obviously a high pressure year for us with the Olympics, but equally to do things like meet riot damages costs. So we are underspending for a variety of reasons, all of them I think good, but procurement is only one element of that.

Q18 Dr Huppert: To come back to something you said earlier, Dame Helen, you said twice when the Chair was asking about staff that a large proportion of the 2,600 staff who are leaving were involved in the ID cards project. How many staff were involved with that project?

Dame Helen Ghosh: I can give you the figure. Obviously it was under the previous leadership of the Department so I will tell you of the figure in 2010-11, of the 2,600 how many were ID card people.

Dr Huppert: That would be very helpful, thank you.

Q19 Mark Reckless: Dame Helen, you said you were ahead of schedule in reducing staff but said just now that you were going to carry the savings forward to next year or use them to pay the riot damages, although I know that is going quite slowly. Is there no prospect that you might be able to return some of the money to the Treasury?

Dame Helen Ghosh: There are a few things that can happen with an underspend: you lose it, in which case that is going back to the Treasury, you reassign it, and the example I gave was riot damages, or you are allowed under the new systems to do something called budget exchange, 1% of your budget. So, assuming you have enough money in your underspend, you can carry that forward into the next year. In our case that would be around £90 million. So some it does just go back to the Treasury if there is not something useful that you can spend it on.

Q20 Mark Reckless: When can these businesses who have been damaged by the riots look forward to payment?

Dame Helen Ghosh: Nick Herbert, the Minister, and I have been working very closely, in particular with the Metropolitan Police, to ensure that they and the insurers are getting the money out of the door as quickly as possible. I think payments are very much beginning to flow, because we obviously share the concern, particularly of small businesses, that the money should go out. Of the 5,000 claims nationally, only around 500 are from people who were uninsured. For the other 4,500 there is an insurance company involved whom clearly Nick Herbert has been encouraging to pay the insurance to their customers rather than await the negotiation with the relevant police authorities.

We just have to strike the right balance and we are encouraging all police authorities to strike a balance in favour of customers between making sure claims do fit the Riot Damages Act, which, as you will know, is quite particular in its requirements, and the circumstances of the individual. The main issue is with the Met and we are working very closely with them to try and get payments to flow.

Q21 Mark Reckless: But no target date?

Dame Helen Ghosh: I think the Met has said itself it is expecting the vast majority, up into the 90%, of their payments to have gone out by the end of this financial year.

Q22 Mr Winnick: As regards the reduction of staff, you mentioned identity cards; no one will miss them. I don’t think even Mr Michael will be missing our identity cards. But could you give any indication whatsoever of the position of the staff of the Home Office who have been made redundant as regards their grading position? Do we take it, for example, that the more senior civil servants have also been included?

Dame Helen Ghosh: Absolutely, and indeed the senior civil service-and this is where the baseline point that the Chairman raised is interesting-has gone down by 23% since December 2009. So if anything we have reduced our senior staff more rapidly in percentage terms. Well, we have reduced our senior staff more rapidly than our more junior staff.

Q23 Mr Winnick: Not through natural causes?

Dame Helen Ghosh: No. There will be one or two natural causes, because there are natural causes in the other figures that I described, but using exactly the same processes the senior civil service has gone down more quickly than the other grades.

Q24 Mr Winnick: The more junior ones, where they certainly remain of working age, were efforts made to transfer them to other departments and so on and so forth?

Dame Helen Ghosh: Absolutely. Just to be clear, these savings I am describing here so far have been made on a voluntary basis, so this is people putting their hands up to leave. It is not people who have been made redundant compulsorily.

Mr Winnick: I am glad you have clarified that.

Dame Helen Ghosh: So when we do identify a redundant post or we restructure, we first of all look for redeployment in the Department, and we have been very successful at that, and then we look, as under the trade union protocols, across the whole of Government and the public sector. So we do all those things before we would ever get to the declaration of any compulsory redundancies.

Q25 Mr Winnick: So at this stage it is those who have put their hands up?

Dame Helen Ghosh: At this stage, it is those who have put their hands up.

Mr Winnick: I am glad you have clarified that.

Q26 Lorraine Fullbrook: Dame Helen, under the changes to the policing landscape, responsibility for non-IT police procurement was transferred from the NPIA to the Home Office. Given the transfer, what are the main aspects that the Home Office intends to focus on in order to make extra savings for the non-IT?

Dame Helen Ghosh: For the non-IT? As you will know, the overall figure that we expect police forces should be able to achieve in non-IT procurement is about £200 million over the SR period. We see our role as facilitating, helping them to do that with a little bit of a stick as well as a carrot. I know this is something dear to the Chairman’s heart. The ultimate aim, and we believe we will probably get there by the end of this year, is to have every aspect, every kind of thing a police force might want to buy in our National Police Procurement Hub-I think you call it the Argos catalogue-by the end of this year.

Chair: Exactly. We could call it the Ghosh catalogue.

Dame Helen Ghosh: Or it is sometimes called the Amazon catalogue, which is confusing. That would be everything from police vehicles through to stationery, paperclips and so on. So we provide that, forces use it and we get management data as to who is using what.

The stick element, as you will know, is to mandate the use of common frameworks. We had phase 1, which was in March this year, which was things like vehicles and body armour and off the shelf software. We will shortly consult on a second phase of mandation, which is things like mobile phones, utilities, consultancy, and that use ultimately of the hub, the catalogue, will also be mandatory. What we are trying to do is to make it so attractive that no police force would choose anything else, with a bit of a stick to say, "If you use these frameworks you will save money". We think so far we will be up to about £70 million of savings in this year, which is things like fleets, forensics, consultancy incidentally. Those sorts of things are already seeing savings. So that is what we think we can do.

Q27 Lorraine Fullbrook: Are you consulting on any other extensions that you can look to?

Dame Helen Ghosh: Not at the moment. We just have the two phases in mind. I am assuming, but am happy to let the Committee know about this, that we are covering all the big items of spend with phase 1 of mandation and phase 2.

Q28 Michael Ellis: Are there any items that are excluded from that list or it is proposed will be excluded from that list?

Dame Helen Ghosh: My understanding that the hub, the Argos catalogue, in the end would have everything on it that a police force might-

Chair: I don’t think we should really call it Argos.

Dame Helen Ghosh: No, I am sorry. The catalogue will have everything on it that police force might wish to buy. My experience, of course, is that there are always some highly specialised things, and this is true of frameworks in Government itself, where people only buy them once in a blue moon and then you would not have that in the catalogue or in mandation.

Q29 Michael Ellis: There is some subtle but nevertheless traditional differentiation in uniform, for example, between constabularies and the helmets, for example, are traditionally different in some parts of the country. Is any regard being had to that?

Dame Helen Ghosh: I will let the Committee know. I know from talking to police officers that is a highly sensitive issue but, again, the more I think one could move towards as much commonality as possible in the way of shirts and straightforward commodities the better.

Q30 Michael Ellis: In principle, yes, of course, and it is extremely useful. If I can just go back very briefly to the issue of staffing at the Home Office, in terms of salaries, do you know as a percentage how much of salary of civil servants in the Home Office would go to the higher grades of civil servants? For example, I am thinking in particular of how many civil servants there might be working in the Home Office who would earn more or in the region of the Prime Minister.

Dame Helen Ghosh: Of course we publish, through our transparency policies, precisely that figure. So it will be available on our website. Like all Government Departments, we have to publish the salaries of everybody earning more than, I think it used to be cited as £150,000 but now it would be £142,000, and it is a small figure.

Q31 Chair: In answer to Mr Ellis, do you have, off the top of your head, any indication as to how many of your civil servants do?

Dame Helen Ghosh: Absolutely off the top of my head, although subject to the Chairman’s sensitivity, our website has this information, it is something like three or four civil servants and four or five members of Her Majesty’s Inspectorate of Constabulary. So it is that sort of order. Keith and I, for example, would be two obvious instances.

Chair: Keith Bristow?

Dame Helen Ghosh: Keith Bristow, given his rate of pay, although as long as he is, of course, on secondment he would not appear in that list, reminding myself of the earlier conversation. It is that sort of order of number.

Q32 Mr Winnick: For the record, if the Chair has no objections-it is on the website and so on, hardly a secret-could you state your salary?

Dame Helen Ghosh: Yes, certainly. My salary is based on what one might call a rate card for Permanent Secretaries, so in the larger Departments, DWP, ourselves, MOD, the rate for the job is £180,000 a year and that is the salary I am paid.

Q33 Chair: You have noted the Committee’s reports on bonuses?

Dame Helen Ghosh: I certainly have.

Q34 Chair: Have there been any bonuses in the last financial year to senior civil servants?

Dame Helen Ghosh: As I reported to you, Chairman, there were payments made last summer in respect of the previous performance year. We always operate, as it were, one year in retrospect, relating to a performance year April to April. So the payments that have been made I reported to the Committee in line with Government policy. It was only to 25% of the SCS compared with higher percentages in previous years.

Q35 Chair: What was the figure on bonuses?

Dame Helen Ghosh: The overall spend was £283,000 to the senior civil servants.

Chair: In this financial year? That is the previous year. Nothing has been paid this year?

Dame Helen Ghosh: Nothing has been paid this year. As usual at this stage in the year we have no formal guidance from the Cabinet Office. The performance year has not finished and therefore we would have made no decisions about the performance year that will end in April this year.

Q36 Chair: But presumably you bear in mind the Government’s overall strategy on this?

Dame Helen Ghosh: We will bear in mind the Government’s policy on this and, as a Department, we are very keen to exercise the maximum restraint on the payment of bonuses.

Chair: Of course.

Q37 Dr Huppert: If I can just bring you back to the procurement catalogue and the downside of making it mandatory. There are three things I would just like to ask briefly about. One is that anybody who has ever used such a catalogue will know that sometimes there are things that can be bought for lower cost down the road at a local shop. So I would be interested to know how you will deal with a case where there is something that is available more cheaply in another way. More generally, what are the consequences for SMEs and particularly smaller suppliers who may not be able to cope at that sort of level; how do we ensure that we are buying from SMEs, because Government policy supports that? Also, how will we ensure that there is local procurement, that a force down in Cornwall can buy things from Cornwall rather than getting them shipped across the country?

Dame Helen Ghosh: Yes, I am very familiar with the argument about, "I could always get it cheaper if I went to PC World" and if it is genuinely true, including all the overheads, the subsequent maintenance, the time of the chief constable walking down to the PC World, if overall it genuinely is cheaper of course we would want to hear about it and we would want to put it in the catalogue. We will also be extremely focused on this issue about SMEs and local suppliers. The Home Office Commercial Department has a very good record on its support for SMEs. Again, I would be happy to give the Committee the figure, but I can assure you we will build it in to the build-up of the catalogue.

Q38 Steve McCabe: Dame Helen, we have heard earlier that the annual report talks about making savings by ending programmes with high consultancy costs, and you have cited the ending of the ID card programme as an obvious example. I wonder, could you give us a few other examples of what else you have ended that is saving money, what other programmes?

Dame Helen Ghosh: There is no individual project that we have stopped, as it were, in order to save consultancy. What we have done within our existing programmes, as I said in response to the earlier question, is thought differently about how we use consultancy. If you take the example of our communications data project, in that case we have replaced a fixed term contract/consultant as leader of the project with a permanent civil servant, and therefore the rate will be lower. In our IT team we have consciously decided, particularly since we are clear that the need for IT professionals is one that will go on significantly into the future, to replace consultancy activity with permanent civil servants. So what we have done within our programmes and projects is looked for the opportunity to use consultants less, cheaper fixed terms contracts more but, obviously most economically of all, train up civil servants to do the jobs.

Q39 Steve McCabe: I understand about doing things differently but the reason I asked is because the quote from the report actually does say, "Insourcing work, renegotiating rates and ending programmes with high consultancy costs", which implied to me you had ended more than the ID programme, and I just wonder what other programmes had ceased.

Dame Helen Ghosh: The ID programme is certainly by far the largest example but if there are any other examples that people had in mind I will let you know.

Q40 Steve McCabe: Where we are talking about other programmes, obviously the ID programme was a straight political decision flagged up before the election. Who would have made the decision to end other programmes? Would that also be a political choice or would that be determined within the Home Office?

Dame Helen Ghosh: The decision would be made absolutely in the normal way, so ultimately a Minister would take the decision. I can’t imagine a programme that had significant consultancy spend that was not something that Ministers had endorsed at some stage and were taking an interest in. So it would either be a result of the fact that for policy reasons a Minister decided that no longer was that programme something they wanted or a programme that naturally came to an end. That is another possibility in that descriptor, which is we have done it, the programme ceased, so we saved the consultancy. We would never, as civil servants, take the decision to cease a programme without getting ministerial approval for it.

Q41 Steve McCabe: Assuming that the term "ending programmes" is deliberate, would you write to the Committee and cite the other programmes that have been brought to an end?

Dame Helen Ghosh: Certainly. I would be more than happy to do so.

Q42 Dr Huppert: One programme that is still continuing, despite a rather chequered past, is the e-borders programme, and we know the problems with Raytheon and so forth. As I understand it, the plan is now to continue with programme but using legacy systems. What effect will that have on its effectiveness? Will it work and when?

Dame Helen Ghosh: Of course we are confident that it will work. One of the things I did when I joined the Department, partly because of the programme’s history, was to ask for an independent review to look at the scope and progress of the programme. What we have done, and I think we have informed the Committee about this in the past, is said clearly there are two phases to this programme. There is what we need to deliver for the Olympics to make sure we can deliver a safe and secure Olympics and then there is the enhancement work that we want to do after that leading to, certainly by 2015, the idea, among other things, that we can do exit checks.

The fact that we have to use legacy systems at this stage in the period up to the Olympics was effectively forced on us by the failure of Raytheon to fulfil the contract. We are using the legacy systems. We are focusing between now and the Olympics effectively on improving the resilience and reliability of the existing systems, which makes using the legacy systems seem fairly obvious, in particular the physical condition of the servers and equipment on both the semaphore system and the warnings index system, and ensuring that it connects as well as it possibly can do with the various agencies. When you look at what happens after the Olympics-and in particular I know the Committee was interested in how we bring on board other forms of transport, aviation, into the advance passenger information and passenger name records regime-we may do some of that on the legacy systems but we would propose to do a new procurement after the Olympics for a new system that will pull all of this together. The judgement as to at what moment we switch over from continuing to work on the legacy systems that, as I say, is good enough for what we need now but into the new world where we have a fully integrated system and we can do exit checks is something the programme board will have to consider in the next month or so.

Q43 Chair: You understand the Committee’s concern about e-borders.

Dame Helen Ghosh: Absolutely.

Chair: Whereas South Africa took nine months to put e-borders into effect, and even Saudi Arabia is about to complete its e-borders programme, we still do not have an e-borders programme in place. It was the previous Government, of course, that gave the contract to Raytheon for £750 million. Can you tell the Committee what is happening about that litigation?

Dame Helen Ghosh: You will be aware, Chairman, that we terminated the contract in the middle of 2010. We are now in the process of preparation, and both parties have put their cases in of the formal mediation, which will begin towards the end of this year and go on into early next year, but obviously a number of aspects of that are commercially in confidence. Can I just say-

Q44 Chair: Mr Reckless will ask you further questions. Can I just take you back on the issue of the contracts you awarded to Serco for £29 million and IBM for £5 million, bearing in mind the original Raytheon contract was £750 million. Clearly these two organisations are not going to be delivering e-borders, are they, because there is a big difference?

Dame Helen Ghosh: They are going to be delivering what we need to take forward the programme towards the Olympics. As I say, we will be procuring a new contract for what we need after the Olympics. What we have procured so far is what we need at this stage in the programme. I think I have said-

Q45 Chair: But do we have an end date, Dame Helen?

Dame Helen Ghosh: Yes, the e-borders programme finishes at the end of 2015. The e-borders programme is what we have-

Chair: Delivered by Serco and IBM at £31 million?

Dame Helen Ghosh: No. As I say, that is the work that is being done now at this phase in the e-borders programme to get us into an appropriate state between now and the Olympics. We then would do a new procurement for the post-Olympic, the expansion into shipping and rail and the capacity we need to integrate the systems so we can do proper exit checks, which is-

Q46 Chair: Bearing in mind we have an end date for the Olympics, are we starting the bidding process for that major contract?

Dame Helen Ghosh: As I said to the earlier question, the programme board I chair will be looking at the issue of which bits of work we leave with the legacy systems and with those contractors that you described, and what we will be putting into the new procurement. We will be doing that in the next month or so, because we quite understand, Chairman, the point about the lead time for procurement.

Chair: Mark Reckless, my apologies for starting that.

Q47 Mark Reckless: Dame Helen, you referred just now to the formal mediation progressing. Can I clarify, is that a reference to the binding arbitration process?

Dame Helen Ghosh: Yes. Sorry, I used the wrong terminology. The binding arbitration process is the one that starts towards the end of this year and completes early in 2013.

Q48 Mark Reckless: Would the Home Office consider a mediation process with a view to settlement?

Dame Helen Ghosh: That would obviously depend on the terms on which one was entering into that mediation. Only if it were good value for the taxpayer.

Q49 Mark Reckless: Clearly. You started with a reference to binding, so we are now clear you are referring to the binding arbitration process, but I want to know whether the Home Office is keeping other options under review-for instance, mediation.

Dame Helen Ghosh: Of course we keep under review the best deal for the taxpayer but the Home Secretary is extremely clear that we had entirely valid reasons for ending the contract for cause and that the taxpayer has to be protected, but most importantly, of course, we need to make sure we have systems that will protect the public as appropriate.

Q50 Mark Reckless: You refer to protecting the taxpayer and a good deal for the taxpayer. Does that mean that if there is a substantial payment from Raytheon that will go back to the Treasury?

Dame Helen Ghosh: Sorry, I now speak only in a general sense. It is usually the case that such payments go back to the Treasury, but whether or not in this particular instance there would be any share I do not know.

Q51 Chair: Just for the record, how much has the taxpayer paid on e-borders under the two Governments?

Dame Helen Ghosh: I will send the Committee a note on that. I know what the value of the full programme is, which I think over five years is £317 million, but obviously the details of the payments that we have actually made, and there are issues around letters of credit that are out there, so precisely how we would classify that I do not know.

Chair: If you could send us the details.

Dame Helen Ghosh: I will tell you what we have paid out.

Chair: Very helpful. Thank you.

Q52 Alun Michael: Can you clarify for me, because I do not think we have taken evidence from you on the point, restructuring of the board of the Home Office. I recall Francis Maude talking about changes that were meant to bring in, I think, a greater representation of independent board members and also create a link between the ministerial team and the board. Where exactly are we with that? What is the composition of the board now?

Dame Helen Ghosh: We have had five meetings of the new style supervisory board. The supervisory board is chaired by the Home Secretary, all Ministers attend and we have appointed a lead non-executive, Val Gooding, ex Chief Executive of BUPA and currently also Chairman of Premier Farnell. She is the lead non-executive who sits alongside the Home Secretary as a key advisor. Then three others: Dianne Thompson, who is the Chief Executive of Camelot; John Allan, who is Chairman of Dixons Retail and also on the board of Barclays and has significant operational experience; and Philip Augar, who was Managing Director of Schroders and then subsequently had a portfolio career. So all four of those are non-executives.

Q53 Alun Michael: So there are four non-executive members now?

Dame Helen Ghosh: Yes.

Q54 Alun Michael: What was it previously?

Dame Helen Ghosh: That was before my time. I think it was probably about the same sort of number.

Alun Michael: That is what I was thinking. I thought there was an intention-

Dame Helen Ghosh: In most Government Departments, we had broadly that kind of number of non-executives but it wasn’t structured and formalised. Of course, the key difference is that the Secretary of State in Departments now chairs the board, which is, as you say-

Q55 Alun Michael: I understand entirely the difference between structure and numbers. I was asking about the numbers. I thought there was supposed to be an increase in non-executive membership.

Dame Helen Ghosh: That is four non-executives. I would certainly be able to let you know how many non-executives there were before.

Alun Michael: I thought it was four previously, that is why I am-

Dame Helen Ghosh: Yes. Of course the distinction is that the non-executives are there actively engaged with Ministers in performance.

Q56 Alun Michael: You referred to it as a supervisory board. Does that mean that the old board, which I have described as the Permanent Secretary’s board, still exists in the same form?

Dame Helen Ghosh: The supervisory board is described as such by the Cabinet Office because it is there to supervise performance. It is not there to take day-to-day executive decisions. It looks at risk, it looks at performance, it discusses and advises Ministers on things like budget allocations but it is not, because you can’t in a statutory sense or in a constitutional sense-clearly it is ultimately for the Minister and for me to be answerable in our various ways to Parliament for what we spend, so it is supervisory in that sense. I still have, on a monthly basis, my executive board with my Directors General. In fact one of the non-execs, Philip Augar, who sits on the supervisory board, also sits on my executive board and we decide the day-to-day kinds of things that an executive board decides and the advice that should go up to the supervisory board.

Q57 Alun Michael: I have to say, that was a very elegant "Yes Minister" reply. So the old Permanent Secretary’s board, as I described it, still exists?

Dame Helen Ghosh: Still exists, yes.

Alun Michael: But now with only one independent board member sitting on it.

Dame Helen Ghosh: Indeed.

Q58 Alun Michael: So the intention of reforming all of this so everything is pulled together in one organisation in which independent members play a greater part actually has been defeated there.

Dame Helen Ghosh: No, not at all. The kind of debate we have in the supervisory board has been exceptionally valuable-

Alun Michael: I am sure it has.

Dame Helen Ghosh: -in the sense that when, as you would expect us to have done, for example we were considering the challenges and events at the Border Force with Ministers, you have present people-for example John Allan and Val Gooding-who have very direct experience of running large-scale operations and their insights into, for example, the importance of management information is absolutely invaluable to Ministers.

Q59 Alun Michael: Sure. So what you have is drawn together the engagement with the Home Secretary and her ministerial team into one body, which is the supervisory board. I can see the advantages of that, I can see that as a step forward, but I have to say I have strongly agreed with some of the things that Francis Maude said about the dysfunctionality of organisation within Government Departments. That is a general comment, not specific to you or the Home Office. But it sounds to me as if the board of officials, the Home Secretary-led board, has less input from independent members now. That has been pushed up to the supervisory board level and otherwise decisions taken by the old style board continue within that body, don’t they?

Dame Helen Ghosh: Framework. Again, of course, there isn’t a direct comparison between what you do in a Government Department and what you would do in a company. The executive board-

Alun Michael: Sure. I was comparing before and after in terms of-

Dame Helen Ghosh: No. The executive management board that I chair, and in the old world would have been chaired by Permanent Secretaries, of course we are discussing either issues that are around management of the Department or what recommendation should be made to Ministers for the decision on policies, programmes and whatever it would be. So we are not in that sense, particularly around policies and programmes, as you will be aware, a decision-making body. It is do we have people in the right place, do we have the capability, what should we recommend about the balance, for example, between carrying forward budget and keeping budget safely for this year, and then either it will go to Ministers for a decision or it will be discussed at the supervisory board. So it does add to the richness of the decision-making process.

We also have non-executives involved in a number of other activities and one of the great benefits of having a strong NED team is that we ask them for, and they have been doing, free consultancy, if you can call it that, on a number-

Alun Michael: Sorry, NED team?

Dame Helen Ghosh: Sorry, the non-executive directors team. We can and have asked them to look at some of our projects to see their view of progress, to see whether we could do them better. They act much more broadly than just coming along to our supervisory boards.

Q60 Alun Michael: This is interesting territory. Have you produced or are you intending to produce something that explains how this governance functions? I can appreciate that some of it is probably organic development rather than just drawing lines. Are you intending to produce something that would-

Dame Helen Ghosh: We worked on the basis of the code of practice for governance that the Cabinet Office produced, so that is our template. All Departments have, to some extent, adapted it for their purposes, so my decision to have a non-executive link with the supervisory board is one that I do-I don’t know that all Departments do-because I value the input of non-executives. We will also be doing an evaluation at the end of the first year, which I think will be in a few months’ time-I think our first meeting last year was June-to see how it went. I would be more than happy to send you, "That was the governance template and this is how we have adapted it" and the kind of things non-executives have been doing. I would be more than happy.

Q61 Alun Michael: Thank you, I think that is very interesting and that will be constructive. Can I just ask one other point. The Chairman asked some questions about bonus payments. Can you tell us has the final decision on payments been made for members of the executive board, for the avoidance of doubt?

Dame Helen Ghosh: My board? We are exactly like any other member of the senior civil service so the same answer that I gave earlier, no decisions have been made about the payment of any bonus to members of the board.

Q62 Alun Michael: Would that be in respect of 2010-11?

Dame Helen Ghosh: No. As I say, the system for payments of bonuses is the same for any member of the senior civil service. So we made payments last summer in respect of the performance year 2010-11 that ended in April 2011, nine months ago. Of the numbers I cited, the 25% and the overall limit, then some members of the board, 25% of the board, indeed received bonuses well within the cap limit set by the Cabinet Office. So they set cash limits for every level.

Q63 Chair: One final question about good practice. You are the accounting officer, obviously, as the Permanent Secretary. We heard about some good practice in the West Midlands concerning mobile telephone technology being piloted by Chris Sims. I know you are giving evidence before the Public Accounts Committee on mobile telephony.

Dame Helen Ghosh: On mobile telephony, yes.

Chair: How quickly does it take the Home Office to pass on good practice? For example, if the pilot in the West Midlands saves a lot of money and is helpful to the police service, how quickly can you get that out to Lancashire or Leicestershire?

Dame Helen Ghosh: You will recall, Chairman, that in response to one of Sir Denis O’Connor’s HMIC reports we have set up a police value for money unit in the Home Office, with secondees from the police. The function of that unit is to do precisely what you describe, to make sure that the lessons we are learning from things like the Quest programme, where we have significant savings, to keep an eye on the business partnering initiatives-West Midlands-Surrey or Lincolnshire being another good example-are spread. So that is how, and then we can obviously feed that into our everyday contacts with the police or Nick Herbert’s high level groups to make sure the lessons get out very quickly.

Chair: Indeed. Dame Helen, as usual, thank you very much for coming to give evidence to us today.

Dame Helen Ghosh: Thank you very much.

Prepared 23rd January 2012