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PUBLIC ACCOUNTS COMMITEEEnd of Session Report 2009 - 2010Remit and PowersThe Public Accounts Committee (PAC) is a Standing Committee established in accordance with Section 60(3) of the Northern Ireland Act 1998 and under Assembly Standing Order 56. “to consider accounts, and reports on accounts laid before the Assembly”. The Committee has the power to:
The PAC ProcessThe Committee’s work focuses primarily on the consideration of reports produced by the Comptroller and Auditor General (C&AG) and his organisation, the Northern Ireland Audit Office. These can be annual financial reports on public accounts or reports on the economy, efficiency and effectiveness of public spending. The Committee selects and examines Audit Office reports that are material to its remit, and can assist in developing lessons to improve accountability and financial governance mechanisms in the public sector. It calls the Accounting Officers responsible for expenditure examined in each report to give oral evidence. Members scrutinise the report and the evidence, and produce recommendations for improved financial systems and controls in a Committee report. The Treasury Officer of Accounts (TOA) attends all evidence sessions on behalf of the Department of Finance and Personnel (DFP), answering Members’ questions and supporting Accounting Officers. Through the Minister for Finance and Personnel, the Executive member with central authority for financial matters, the relevant Department responds to the Committee’s recommendations two months after publication of the report. This is called a memorandum of reply. The TOA co-ordinates this response and promotes good practice across Departments. MembershipThe Committee has 11 members, including a Chairperson and Deputy Chairperson, with a quorum of 5 members. The membership of the Committee since 9 May 2007 has been as follows:
1 Mr Mickey Brady replaced Mr Willie Clarke on 1 October 2007
Members of the Public Accounts Committee and Clerking Team at a meeting – September 2009 Committee activities, outputs and achievementsReports This report covers the work of the Committee from 1 September 2009 to 31 August 2010 (Assembly year 2009-10). The Committee held thirteen inquiries during this period. In chronological order, they were reported on as follows:
Thematic Report In addition, the Committee published its First Thematic Report consolidating key findings from previous enquiries. The Committee wished, in light of current economic conditions, to recap on lessons learned in the back catalogue of reports it has covered, with the aim of reaffirming crucial messages to improve Government stewardship of public money. The Committee's reports have highlighted flaws which must be guarded against at each stage of a project, and these are demonstrated in this report in terms of:
Composite Report The Committee also published one composite report comprising inquiries conducted by correspondence on the following NIAO reports:
Meetings heldDuring the year, the Committee met formally 36 times. Eleven of the meetings were evidence sessions, ten of which were conducted in the Senate Chamber and one in Room 144, Parliament Buildings; 24 were partly closed or closed.
An Evidence Session into the Performance of Northern Ireland Water – June 2010 The purpose of most closed sessions was to consider the approach to specific reports, enabling members to explore the facts and increase their understanding of the more complex findings in the reports. Summary of InquiriesReport on the Management of Social Housing Rent Collection and ArrearsThe Committee took oral evidence from Alan Shannon, Accounting Officer of the Department for Social Development (DSD), and other senior officials including the Northern Ireland Housing Executive (NIHE) on 17 September 2009 in relation to the Comptroller and Auditor General’s report on the ’Management of Social Housing Rent Collection and Arrears’. Rental Income from Social Housing is some £350 million and f ailure to maximise this income carries serious implications for NIHE’s ability to carry out property maintenance and provide other services to tenants. At its evidence session the Committee heard that as of September 2008 NIHE’s level of serious arrears (defined as tenants owing more that £1,000) was £5.6 million. The Committee heard that NIHE had been very tardy in introducing preventative measures to minimise the risks of arrears accruing in the first place, such as the facility to allow tenants to pay by direct debit. The Committee also learned that only 1 of NIHE’s 73 corporate targets relate to rent arrears. It requires that the level of arrears does not deteriorate year on year. Whilst this target was achieved this was only possible because NIHE wrote off £10.6 million in the five years up to March 2007. The Committee recommended that the Department needed measures to maximise rent collection and prevent arrears from arising; performance measurement and benchmarking as drivers for improvement; and oversight and regulation of the social housing sector Twelve out of 14 of the Committee’s recommendations were accepted in the Government’s memorandum of reply of 12 January 2010.Report on Bringing the SS Nomadic to Belfast – The Acquisition and Restoration of the SS NomadicThe Committee took oral evidence from Alan Shannon, Accounting Officer of the Department for Social Development (the Department), and Mr Jackie Johnson, Director of Belfast City Centre Regeneration Division, Department for Social Development at its second evidence session on 17 September 2009. In January 2006 the Department purchased the SS Nomadic at auction at a cost of £170,000. However with fees and insurance this cost rose to £263,000. Up to December 2008 the Department incurred a further £650,000 on transportation and restoration. DSD actively encouraged the establishment of the SS Nomadic Charitable Trust (the Trust), a voluntary organisation staffed primarily from part-time workers and enthusiasts to take forward the restoration and ongoing maintenance of the vessel. The Department told the Committee that it estimates the cost of restoring the Nomadic to be in the range of £5 million to £7 million. A more accurate estimate will be provided on completion of a Conservation Management Plan currently being prepared for the Trust. Until this is finalised only essential restorative work will be undertaken. The Committee recommended that the Department reiterate that the use of rolling contracts is not best practice and is unlikely to deliver value for money. It also recommended that, on completion of the Conservation Management Plan, the Department ask the Trust to revisit its economic appraisal and confirm to the Department’s satisfaction that this project will in fact deliver value for money. The Committee stressed that if the revised business case is viable to take the project forward, the Department and the Trust must work together to enable work to commence at the earliest opportunity to enable the paying public to contribute to restoration and relieve the burden on the public purse. Three out of five of the Committee’s recommendations were accepted in the Government’s memorandum of reply of 12 January 2010.Report on Public Service Agreements - Measuring PerformanceThe Committee met on 8 October 2009 to hear oral evidence from Mr John McMillen, Accounting Officer, Office of the First Minister and deputy First Minister (OFMDFM) , and officials in relation to the Comptroller and Auditor General’s (C&AG’s) report ‘Public Service Agreements – Measuring Performance’. Since 1998, Northern Ireland departments have been required to publish Public Service Agreements (PSAs) covering each three-year government spending cycle. These specify the targets to be used to measure performance against key departmental and cross-cutting objectives. Adopting high standards in performance reporting can improve the accountability and transparency of public service delivery, help departments to allocate resources effectively and contribute to robust, evidence-based policy decisions. The Committee has real concerns, however, about the reliability and accuracy of the underlying PSA data systems. This makes it difficult to conclude that reported performance has actually been achieved. OFMDFM has a central co-ordination and oversight role in relation to PSAs but in the Committee’s view its exercise of these functions has not been sufficiently rigorous. Despite subsequent improvements in oversight arrangements, the Committee found that the new system had not sufficiently addressed the specific data system limitations identified by the C&AG’s report. Ten years after the launch of PSAs, much still remains to be done before any examination of targets and data systems will produce a clean bill of health. On the basis that if the quality of measurement systems is poor, the reported data will also be poor, the Committee agreed that OFMDFM must do more to hold individual departments to account for implementing improvements to weak data systems, and senior management must therefore take ownership of this issue. The Committee made nine recommendations. The Government’s memorandum of reply accepted only two of the nine recommendations, and the Committee subsequently rejected the memorandum of reply. The Committee felt strongly that the response did not constitute a proper treatment of the Committee’s concerns, and reiterated that Departments are required to respond as fully and positively to the Committee’s recommendations as possible.The Treasury Officer of Accounts provided the Committee with an assurance that she would seek to ensure that future Memoranda of Reply would comply with the conventions set out in the HM Treasury 'Guide to the Scrutiny of Public Expenditure'. Report on Irish Sport Horse Testing Unit Ltd: Transfer and Disposal of AssetsIn its second evidence session on 8 October 2009 the Committee heard oral evidence from Dr Malcolm McKibbin, Accounting Officer, Department of Agriculture and Rural Development and supporting officials in relation to the C&AG’s report into the transfer and disposal of assets of Irish Sport Horse Genetic Testing Unit Ltd. Irish Sport Horse Genetic Testing Unit Ltd (Sport Horse) was set up in 1996 to establish a commercially run elite horse-breeding project. The company received over £3.3 million in EU funding from the Department of Agriculture and Rural Development (DARD). Following DARD’s decision in April 2001 not to provide further funding to the project, Sport Horse was wound down in July of that year. Remaining assets were transferred to the Enniskillen campus of the Department’s College of Agriculture, Food and Rural Enterprise (CAFRE). These assets included an Equine Reproductive Technology Centre; 95 horses; and a stock of frozen equine semen. The Committee held two previous hearings on Sport Horse in January and September 2001, and decided to hold this inquiry to finalise its previous work. The Committee recognised that the Sport Horse project presented a number of challenges by virtue of its innovative nature. However, the Committee was disappointed to find that a relatively small and short-lived project was so poorly handled, and that most of the shortcomings were matters subject to well-established procedures which were largely ignored. While many of the failings in the project originated within Sport Horse itself, the Committee attributed responsibility also to the Department as in several key respects the Department failed to ensure that the risks were properly managed. The Committee acknowledges that the project delivered a number of benefits to the equine industry and to the local economy of the Irvinestown area but considered that they were of short duration and fell short of what had been envisaged in planning. The Committee concluded that overall, the Sport Horse project represented poor value for taxpayers’ money. Four out of five of the Committee’s recommendations were accepted, and the fifth was accepted in part, in the Government’s memorandum of reply of 17 February 2010.Report on Review of New Deal 25+The Committee took oral evidence from Mrs Catherine Bell, Acting Accounting Officer of the Department for Employment and Learning (the Department), on 22 October 2009 in relation to the Comptroller and Auditor General’s report on the ‘Review of New Deal 25+’. This report examined the performance of ‘New Deal 25+’, a mandatory ‘welfare to work’ programme established in 1998, which aimed to help long-term unemployed adults, aged 25 and over, to improve their employability and get into work. The programme was part of a UK–wide initiative, but was introduced as a pilot in GB and was not fully implemented there until 2001. The Committee’s inquiry found that ‘New Deal 25+’ brought a number of benefits to the long-term unemployed, but that the overall employment impact of the programme was very limited and often short-lived. As the period under review was one where the economic conditions were relatively good, the Committee found this very disappointing. The Committee acknowledges that this was a major challenge but considered that the Department could have done much better in terms of job outcomes. The Committee found that, during the later years of the programme, the Department was slow to react to growing problems, such as that of repeat participants who, despite completing the programme on multiple occasions, failed to get a job. It appears to the Committee that, to a large extent, the Department was simply going through the motions with these participants, and given the vulnerability and disadvantage experienced by the long-term unemployed, the Committee considered that this was not good enough. One of the main weaknesses of ‘New Deal 25+’ was its “one size fits all" approach. In particular, not enough was done to tackle two of the most fundamental problem areas, common to a large proportion of participants – a lack of qualifications and difficulties with basic literacy and numeracy skills. As a result, the Committee considered the employment outcomes for the programme, which were its primary aim, to be very modest – on average, only 18 per cent of leavers found a job. The Committee found this was a poor return for taxpayers’ money and made recommendations to improve the design of the Department’s new programme, Steps to Work. Ten out of 14 of the Committee’s recommendations were accepted in the Government’s memorandum of reply of 17 February 2010.Report on the Performance of the Health Service in Northern IrelandThe Committee took oral evidence from Dr Andrew McCormick, Accounting Officer of the Department of Health, Social Services and Public Safety (the Department), on 12 November 2009 in relation to the Comptroller and Auditor General’s report on the ‘Performance of the Health Service in Northern Ireland’. The Committee found much about the performance of the Health Service that was very positive. Death rates from cancer and heart disease are continuing to fall and life expectancy continues to improve. Progress is also being made on public health challenges such as smoking, teenage pregnancy and hospital hygiene. However, the Committee also had some concerns. Rising obesity threatens to negate the progress made on cardiac health and increase the prevalence of Type 2 diabetes, and the statistics show that deprivation continues to have a direct influence on life expectancy. Persistent inequalities in health status between deprived and affluent areas must be robustly addressed. As healthcare costs are continuing to rise and chronic care consumes an increasing share of spending, the Committee recommended that:
Nineteen out of 25 of the Committee’s recommendations were accepted, and a further one was accepted in part, in the Government’s memorandum of reply of 16 April 2010.Report on the Performance of the Planning ServiceThe Committee took oral evidence from Mr Leo O’Reilly, Accounting Officer of the Department of the Environment (the Department), on 3 December 2009 in relation to the Comptroller and Auditor General’s report on the ‘Performance of the Planning Service’. The Department for the Environment (the Department) is responsible for planning control within Northern Ireland, and the Planning Service, an Agency within the Department, administers many of its planning functions. These functions include the processing of planning applications and also the enforcement of planning control. In 2008-09, Planning Service’s gross expenditure was £42 million, and income was £17.7 million, 97 per cent of which was derived from planning application fees. The Committee’s inquiry focused on poor performance of the Planning Service over a long period; the improvements needed to deliver a fit-for-purpose service; and the Agency’s failure to deliver a flagship IT system and deficiencies in customer service. In particular, the Committee found that the Planning Service consistently failed to meet its Public Service Agreement targets for processing applications in a timely matter, and that despite welcome, recent improvement, the standard is still not as good as customers have a right to expect. A flagship IT project (e-PIC), designed to allow electronic delivery of planning processes, has run significantly over time and over budget. There has been a significant decline in the Planning Service’s level of customer satisfaction, and the Committee considered the current satisfaction rate of 32 per cent as simply unacceptable . The Executive’s Programme for Government 2002-05 committed the Department to having a full set of Policy Planning Statements (PPSs) in place by the end of 2005, but this target was not achieved. The organisation’s performance has been poor for a long period of time, and it is missing targets such as processing planning applications and managing its enforcement activities. The Committee recommended that:
Twelve out of 15 of the Committee’s recommendations were accepted in the Government’s memorandum of reply of 16 April 2010.Report on the Pre-School Education Expansion ProgrammeThe Committee took oral evidence from Mr Will Haire, Accounting Officer of the Department of Education (the Department), on 14 January 2010 in relation to the Comptroller and Auditor General’s report on the ‘Pre-school Education Expansion Programme’. The Committee chose to make this inquiry because effective pre-school education helps children’s personal and social development and helps to ensure that they come to primary school ready to learn because they have the appropriate cognitive and social skills. Failure of early years education risks undermining the benefits of taxpayers’ investments in later stages of the formal school system. The implementation of the Pre-school Education Expansion Programme (PSEEP) in 1998 was aimed at helping pre-school children obtain these skills. The Committee found that there has been great progress in increasing the supply of pre-school education. However, it considered that the Department still needs to tackle the geographical gaps in supply and demand and demonstrate definitively how the skills of participating children have improved. There are still a number of children each year who fail to get a funded pre-school place, and the Committee considered that the Department needs to further refine its allocation process to ensure there is maximum matching of provision with demand. Although the quality of pre-school settings has generally shown an improvement in grading, the Inspectorate reported a minor dip in grades across all sectors in the period 2006-2008. The Committee emphasised that it is important that the Department ensures that quality is maintained and raised where necessary, as studies have shown that the higher quality of provision the greater the benefits for the children involved. Pre-school education has been shown to particularly benefit the most socially disadvantaged children who are more likely to experience difficulty at school. It is important, therefore, bearing in mind the number of children in Northern Ireland leaving school with literacy and numeracy problems that the Department continues to target these children for intervention and support. The Committee acknowledged that the Department and Education and Library Boards (Boards) have achieved a great deal, expanding pre-school provision substantially over the past ten years, in many cases making a significant cultural shift to work with partners in a mixed economy. The challenge now is to develop provision so that the child’s social and educational development, nurtured through play in the pre-school environment, continues into its primary education. The Committee’s evidence session drew attention to a number of issues relating to pre-school education which it considered need to be addressed urgently: for example the question of two-year-olds; matching supply and demand; and maximising the professionalism of staff working in the private/voluntary sector. The Committee recommended:
Nine out of 11 of the Committee’s recommendations were accepted in the Government’s memorandum of reply of 25 May 2010.Report on a Review of the Gateway ProcessThe Committee took oral evidence from Mr Paul Priestly, Accounting Officer of the Department for Regional Development (the Department), on 4 February 2010 in relation to the Comptroller and Auditor General’s report on the ‘Review of the Gateway Process’. The Gateway Review process was developed by the Office of Government Commerce (OGC) in Great Britain to improve the delivery and value for money of large construction and IT projects. Reviews are carried out at five key decision points or “gateways” by a small team of experienced practitioners who are independent of the project. This is intended to challenge the plans and processes and to ensure that projects can progress successfully to the next stage. The process was introduced in 2004 here, after being launched in 2001 in England. When the Committee investigated the upgrade of the Belfast to Bangor railway line – a project which ran considerably over budget, was poorly managed by Translink and was not subject to sufficient oversight by the parent department – the Treasury Officer of Accounts gave assurances that project failings of this nature were unlikely in the future as all major projects were now subject to the discipline of the Gateway process. The inquiry focused on the use of the Gateway Process in DRD; the effectiveness of DFP’s guidance; and the role of DFP in managing the Gateway Process. The Committee’s main finding was that despite being responsible for around a third of all capital projects in the North of Ireland, DRD has not carried out a single Gateway review since Gateway was introduced — despite undertaking capital projects worth some £2 billion. Whilst the Accounting Officer emphasised that the Department had complied with guidance in place at the time, it was the Committee’s view that DRD were operating outside the spirit of the guidance as it was clearly not the intended impact of the policy that £2 billion should be spent by DRD without reviewing a single project. This point has now been reinforced which a change in the DFP guidance in late 2009 which requires a mandatory review of projects over £20 million. The Committee believes that Gateway Reviews can contribute to improved value for money. HM Treasury in England has reported savings of £2.5 billion. In the evidence session, DRD was dismissive of the potential value for money savings that Gateway could deliver despite the Central Procurement Directorate claiming savings of £25 million in the North. The Committee recommended that projects that have not undertaken a Gateway review which subsequently experience significant delivery problems should be subject to particular scrutiny. To underpin this, the Committee also recommended that the C&AG bear this in mind when framing his future work programme across the wider public sector. Further, the Committee recommended that DFP’s review of Gateway examines the coverage of Gateway in each department and Centre of Procurement Expertise to ensure that a sufficient proportion of their capital spend is subject to Gateway review. Three out of four of the Committee’s recommendations were accepted in the Government’s memorandum of reply of 22 June 2010.Report on the Management of Personal Injury ClaimThe Committee took oral evidence from Mr Paul Priestly, Accounting Officer of the Department for Regional Development (DRD), on 4 February 2010 in relation to the Comptroller and Auditor General’s report on the ‘Management of Personal Injury Claims’. DRD’s Central Claims Unit (CCU) currently processes all public liability claims against Road Service for damage to vehicles and personal injuries. Personal injury or so-called “tripping” claims accounts for over 80% of its costs, which are currently around £4 million per year. Half of this is for compensation and half for legal costs, including the cost of advice from the Department of Finance and Personnel’s (DFP) Departmental Solicitors Office (DSO). The Committee’s inquiry focused on DRD’s role in reducing the number of successful claims; the cost of compensation payments and legal fees; and charging for the services of the Departmental Solicitor’s Office. The Committee’s main finding was that the Roads Service has a statutory duty to maintain roads and footpaths in a reasonable condition, and its current inspection and repair regime allows CCU to reject around 70% of claims on the basis that its statutory duty has been fulfilled. The Committee acknowledges that these arrangements provide a legal defence in most cases and have greatly reduced the number of successful claims over the last ten years; but is disappointed that the Department was not prepared to consider that anything in its performance could be improved. The Committee found that compensation payments account for half of the total cost of claims. Rates are approximately double those paid in England and Wales, based on guidelines set by the Judicial Studies Board. The Committee learned at the evidence session that the legal profession, whose members stand to benefit financially, appear to be setting rates of compensation and fees largely in isolation from the public and private sector bodies which will have to bear these costs. (These decisions will now be taken by the Court Service which since devolution sits within the new Department of Justice). The Committee also found that payments to DSO amount to some £750,000 per year and have increased at nearly twice the rate of inflation over the last 10 years, and that DSO provides legal advice to all departments yet it only charges for services to the Central Claims Unit. The Committee recommended that CCU consult with the Roads Service to clarify what information is required to identify areas of higher claims and that it reviews the operation of its management information system to ensure that information is accurately and consistently provided. The Committee also recommended that Roads Service consider the scope for a more flexible approach to an actionable defect, particularly in busy pedestrian areas of town centres with a history of accidents. The Committee referred to the Justice Committee monitoring of its recommendation that DFP consult with the Court Service to determine how more effective arrangements might be put in place that reflect the views of key stakeholders on fees and compensation. The Committee also reiterated that in keeping with long established government accounting principles, where any service is provided between departments there should be a presumption that customer departments will be hard charged. In cases where change are not levied or charged, this decision should be fully and explicitly justified, particularly in the current context of economic hardship. Four out of seven of the Committee’s recommendations were accepted in the Government’s memorandum of reply of 22 June 2010.Report on the Resettlement of Long Stay Patients from Learning Disability HospitalsThe Committee took oral evidence from Dr Andrew McCormick, Accounting Officer of the Department of Health, Social Services and Public Safety (the Department), on 25 February 2010 in relation to the Comptroller and Auditor General’s report on the ‘Resettlement of Long Stay Patients from Learning Disability Hospitals’. In Northern Ireland, an estimated 16,400 people (one per cent of the population) have a learning disability. More than a quarter of these people have severe or profound learning difficulties. Approximately five per cent of people with learning disabilities present severely challenging behaviour. Historically, where those with learning disabilities were unable to remain at home, they were offered accommodation and care in long-stay hospitals. In 1995, the Department of Health, Social Services and Public Safety took a policy decision that all long-stay patients at the three remaining learning disability hospitals (Muckamore Abbey, Longstone and Lakeview) should be offered a better life through resettlement in the community. The Department’s initial target was to resettle all learning disability patients from long-stay hospitals by 2002. However, the Department failed to meet this commitment. The number of patients in long-stay hospitals halved in the ten-year period to 2002 but the Department failed to maintain this momentum or to allocate sufficient funding to deliver the strategy. As a result, over 250 long-stay patients currently remain in learning disability hospitals. The latest target anticipates full resettlement by 2013. The Committee heard evidence about the effectiveness of the Department’s performance against this long-term target. While many of those who remain in long-stay hospitals have the most severe disabilities, there are many others who have been assessed as fit to be discharged. The Committee was deeply concerned and considered it totally unacceptable that 15 years after adoption of the resettlement policy, a large number of those who remain in hospital are keen to be resettled into the community and have been assessed as fit to leave. Some work on the likely requirements and costs of resettlement has been undertaken but the Committee considered that it needs to be more extensive and systematic. Achievement against the latest target will require detailed planning. Resettlement of individuals is carried out on a priority basis against a range of criteria. The Committee considered it essential that this process allocates individuals to places in a transparent and equitable way. This is important given the high level of unmet demand for resettlement and the long-term commitment involved in the provision of such services. The Department’s resettlement policy assumes that all patients, regardless of the complexity of their needs, will be able to live in the community. Many of the families of those with complex needs do not support this. While the experience of resettlement has been positive to date and it is clear that the option to resettle should be offered to all, the Committee stressed that it is important that the Department is compassionate in those cases where resettlement is less viable. The Committee felt that the role played by family members providing care at home is vital and it is right that the Department supports these individuals by, for example, providing access to respite care. In the past, carers have had difficulty with the limited availability and inflexibility of respite services. The Committee recommended that the Department consults with carers, assesses their needs and then develops appropriately tailored respite services to support them. Six out of seven of the Committee’s recommendations were accepted in the Government’s memorandum of reply of 9 July 2010.Report on Transforming Land Registers: The LandWeb ProjectThe Committee met on 18 March 2010 to hear oral evidence from Mr Stephen Peover, Accounting Officer, Department of Finance and Personnel , and officials in relation to the Comptroller and Auditor General’s (C&AG’s) report ‘Transforming Land Registers: The LandWeb Project’. Land Registers plays a key role in the conveyancing process when property is exchanged and records updated and is responsible for registering estates throughout Northern Ireland. To improve efficiency and customer service, Land Registers signed a Private Finance Initiative Concession Agreement (“LandWeb") with British Telecom (BT) in 1999. The Committee heard that LandWeb has enabled Land Registers to process vastly increased numbers of applications, particularly during the period of the unprecedented property boom, resulting in faster turnaround times for applications. In addition it provides a secure electronic archive for documents. Computerisation has also enabled Land Registers to provide enhanced levels of customer service through a direct access facility, for use by the legal profession, via the internet (LandWeb Direct). The Committee acknowledges that LandWeb has transformed Land Registers’ business from an antiquated paper-based system but considers that the deal negotiated has been more lucrative to British Telecom than envisaged in its original bid of £17 million. Additions and changes to the Agreement since 1999 have increased its capital value from an estimated £46 million in 1999, to a current reported estimate of £78 million. This is due to windfall gains resulting from the property boom and the add-ons to the original Agreement. The Committee learned that the Department and Land Registers do not have access to information on BT’s financial position and profitability. This limits their ability to manage risks, negotiate effectively and develop a functioning partnership. The Committee found evidence of poor project management, short-comings in risk management and a lack of necessary skills and experience in the Land Register’s project team before, during and after the procurement. In the Committee’s view, rather than planning and anticipating its staffing requirements, Land Registers waited until a situation reached crisis point before acting. This led to BT effectively acting as a job agency providing casual staff, which has cost over £16 million to date. Whilst the Committee acknowledge the pressures Land Registers was operating under at that time, the provision of this support by BT also enabled it to realise revenue through processing transactions more quickly. In addition, as the provision of this support has not been subject to a competitive tendering process, it is difficult to assess whether value for money was achieved. Land Registers has been charging too much for its services resulting in it generating surplus income of over £30 million since 2003. This could be viewed as a form of indirect local taxation levied on Land Registers’ customers. The Committee also considered it important that where such surpluses are surrendered, the use made of those funds for other public services is properly approved by the Assembly. The Committee found it disappointing that lessons emerging from this project were not identified by the Department and disseminated earlier. Many of the project management issues were also evident in the Department’s later Shared Services projects, examined by the Committee in 2008. This inquiry contributed to the Committee’s decision to Six out of eight of the Committee’s recommendations were accepted in the Government’s memorandum of reply of 3 August 2010.Report on Combating Organised CrimeThe Committee met on 22 April 2010 to hear oral evidence from Mr Leo O’Reilly, Accounting Officer, Department of the Environment , and officials in relation to the Comptroller and Auditor General’s (C&AG’s) memorandum on ‘Combating Organised Crime’. Organised crime is a form of fraud that goes to the very heart of public finances. Tackling it effectively requires close co-operation at all levels. The Committee recognises that the primary responsibility for addressing the problem does not fall to devolved Northern Ireland departments and public bodies. Nevertheless, a number of departments and public bodies do have an important role to play in supporting bodies such as HMRC through the energetic use of their powers to regulate, licence and enforce. The Committee was deeply concerned at the evidence it heard about human trafficking, which is growing in Northern Ireland, and the toll it takes on vulnerable women and children, who have been falsely enticed here by the prospects of employment, education and a better life, only to find themselves the victims of domestic servitude or sexual exploitation. The Committee heard evidence of the serious impact of oil fraud on the environment, through the clean-up of residues dumped after fuel-laundering, as well as causing damage to engines, undermining legitimate business and entailing major loss of public revenue supporting expenditure programmes here. Illegal dumping also has significant environmental consequences as the release of pollutants can continue to be a major environmental problem for many years. It carries a very significant financial impact, both through loss of revenue and clean-up costs. The Committee emphasised that this money could much better be used for essential front-line services, but is encouraged by the work of the Department of the Environment and the Northern Ireland Environment Agency in tackling illegal dumping. The Committee considers that to counter organised crime effectively, all public sector bodies need to work in partnership, share information and co-ordinate their activities against threats of organised crime against their programmes of expenditure. The Committee heard positive reports about the co-ordinating role and work of the Organised Crime Task Force and examples of cross-border co-operation. However, in the Committee's view the work of the Northern Ireland departments needs to be better co-ordinated. In addition, the Committee believes that it is vital that more is done to raise public awareness about the prevalence of organised crime. The Committee commends Government’s determination to prosecute offenders and its use of confiscation orders to deprive them of assets acquired through criminal acts. Given the major threat posed by organised crime and that a number of recommendations relate to policing and justice, the Committee is referring the Comptroller and Auditor General's Memorandum and Note to the Northern Ireland Assembly's new Justice Committee. The Department noted all 5 of the Committee’s recommendations in the Government’s memorandum of reply of 13 September 2010. The Committee agreed to write to the Justice Committee seeking clarification on whether the Department was accepting the recommendations made in the Committee’s report.Report on North/South BodiesNorth/South Bodies are engaged in a range of important areas including tourism, trade and development, food safety, the promotion of Irish and Ulster Scots and the administration of EU funds. Their activities are funded jointly by the Northern Ireland Assembly and Dáil Ếireann in varying proportions. The Committee decided to take oral evidence regarding the unique financial accounting and reporting arrangements of the bodies. The Committee made a useful first contact with North/South Bodies at the InterTradeIreland premises in Newry on 12 March 2009. Two bodies, InterTradeIreland and the Special European Programmes Body (SEUPB), gave evidence to the Committee, and it examined this and issues of general application to all North/South Bodies. The counterpart Committee of the Oireachtas took evidence from Waterways Ireland, the Food Safety Promotion Board, and Tourism Ireland. The Committees met in Dublin to discuss the bodies’ financial governance systems and overall accountability in North/South bodies. The report was agreed by the Committee in June 2009 and launched on 17 June 2010 following consultation with the analogous Committee of the Oireachtas. All eight of the Committee’s recommendations were accepted in the Government’s memorandum of reply of 13 September 2010.
Members of the Public Accounts Committee – September 2009 RecommendationsIn total this year, the Committee has made 137 recommendations to improve financial accountability to the taxpayer. It continues to monitor departmental progress in implementing them. Of these recommendations, 99 were accepted by the Government. The Committee rejected as inadequate the response to six of the recommendations. The newly formed Department of Justice has been asked by the Committee to confirm whether it has accepted seven recommendations under its new remit. (These were noted on behalf of the then nascent Department by the Minister for Finance and Personnel).Where its recommendations were noted rather than accepted outright, the Committee sought clarification from the relevant Department via the Treasury Officer of Accounts of the reasons for this. Where it deemed necessary the Committee referred noted recommendations to the relevant statutory committee for continued scrutiny of implementation.
Members of the Public Accounts Committee – October 2010ANNEX APublic Accounts Committee – Expenditure for the period 1 September 2009 – 31 August 2010
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