COMMITTEE FOR FINANCE AND PERSONNEL
OFFICIAL REPORT
(Hansard)
Draft DFP Business/Operational Plan for 2009-2010
25 March 2009
Members present for all or part of the proceedings:
Mr Mitchel McLaughlin (Chairperson)
Mr Simon Hamilton (Deputy Chairperson)
Dr Stephen Farry
Mr Fra McCann
Ms Jennifer McCann
Mr David McNarry
Mr Adrian McQuillan
Mr Declan O’Loan
Ms Dawn Purvis
Mr Peter Weir
Witnesses:
| Mr Colm Doran | } |
| Ms Deborah McNeilly | } Department of Finance and Personnel |
| Mr Leo O’Reilly | } |
The Chairperson (Mr McLaughlin):
I welcome Leo O’Reilly, permanent secretary in the Department of Finance and Personnel, Deborah McNeilly, the head of the business finance branch, and Colm Doran, the head of business planning team in the corporate services group. It is probably sufficient for us to go straight into the discussion.
Mr Leo O’Reilly (Department of Finance and Personnel):
First, I apologise to the Committee for the circumstances of last week in respect of the briefing paper. Logistically, we dropped the ball — underperformance again. The briefing paper should have been with your Committee Clerk on Friday 13 March 2009, but it did not arrive until Monday, and Tuesday was a public holiday. Therefore, I apologise to the Committee for that.
The Chairperson:
I appreciate that.
Mr O’Loan:
I have a number of questions, and I will try to be as concise as possible. Does the business plan for 2009-2010 reflect the targets that have not been delivered in the current year, and how will such targets be monitored?
Mr O’Reilly:
As explained in the documentation provided to the Committee, the operational plan is a sub-component of the overall three-year corporate plan; therefore, the targets for each year will reflect the overall corporate plan, and there will be a continuity of targets. In reply to your specific question, we have not yet reached the year-end position, but it is inevitable that some targets will not be achieved during this financial year.
Mr O’Loan:
Will those targets be given particular focus next year?
Mr O’Reilly:
They will, and, in most cases, the targets are restated in next year’s operational plan.
Mr O’Loan:
The business plan states that financial constraints have intensified. In what areas will a lack of funds impact on delivery next year?
Mr O’Reilly:
I will answer the general question, and perhaps Deborah will provide some of the detail. The overall financial position, as the plan highlights, is quite tight and is getting tighter. The Budget put in place a cumulative level of efficiency savings to be delivered by Departments, including a level of efficiency savings to be delivered in respect of administration costs. Given the nature of the Department of Finance and Personnel’s (DFP) expenditure, a large proportion of that consists of administration costs, which is why the levels of real cash in the system are declining.
The Department is currently running an exercise through each directorate and division to work through the implications of next year’s budgets for their operations and what steps they will have to take to deliver within the reduced level of resources available to them in the forthcoming financial year. They are considering ways of reducing costs and staffing levels to ensure that they can live within the financial allocations that will be available next year, which are simply the roll-on from the Budget position of January 2008.
Ms Deborah McNeilly (Department of Finance and Personnel):
We are meeting with each business area and reviewing their proposed efficiency delivery plans. We have previously indicated to the Committee that the efficiency targets for 2009-2010 and 2010-2011 would be difficult and challenging for the Department. The business areas are being asked to look at the plans that they have previously proposed, indicate whether they will be able to deliver on those plans and outline alternatives. They have indicated that it will be very challenging.
There are specific problems in certain business areas; for example, in some areas, the work has increased, but there is no new funding. There is the increased challenge of trying to balance new priorities and additional work with the same pot; the pot has become smaller in 2009-2010 than it was in 2008-09. That seems to be the message that is coming from all business areas.
Mr O’Loan:
The plan also refers to the need to improve productivity across the Northern Ireland Civil Service. What is DFP’s role in that?
Mr O’Reilly:
At a high level, the Department encourages — or, rather, imposes — productivity by ensuring that, for example, the programme of 3% cumulative efficiency savings put in place in the Budget are being delivered as planned and that they are genuine efficiency savings and not cuts. That is a key area of the Department’s activity, alongside the Office of the First Minister and deputy First Minister (OFMDFM).
Arrangements have been agreed between the two Departments to put in place a delivery framework. That is essentially a process of monitoring the various commitments made by each Department against delivery, including the projected efficiency savings. Those will be monitored regularly across all Departments, and regular reports will be produced for the Executive on the extent to which all Departments are making progress against their public service agreements (PSA) and other targets, including, of course, their financial targets.
Mr O’Loan:
I have a question about a specific target, which refers to monitoring spending plans, and the monitoring and reporting of departmental performance under Richard Pengelly. I attach a lot of significance to that. How significantly is that target rated? It is a difficult target to deliver; have you any comment to make on that?
Mr O’Reilly:
Earlier, I referred to the delivery framework that has now been put in place to ensure that there is a structure around the identification of the PSAs and monitoring of how Departments are performing against the PSAs and their budgets in the present and forthcoming financial years. That work is being co-ordinated through the Department’s performance and efficiency delivery unit (PEDU) alongside colleagues in OFMDFM.
Mr O’Loan:
You referred to reporting to the Executive. What is the accountability chain for Committees? It is extremely important that the information that comes out of that goes to departmental Committees.
Mr O’Reilly:
I am trying to remember the detail of what was in the paper that was agreed by the Executive. I will come back to you on that.
Mr Weir:
What satisfaction levels were reflected in the DFP staff survey and the DFP customer survey that were conducted in 2008? What were the major issues to arise from those surveys, and, given that they were carried out last year, what action have you taken, or will take, to address those? The draft operational plan refers to:
“people, communication, leadership and strategic direction”.
What improvements have you made in those key areas?
Mr O’Reilly:
New surveys on staff and customer issues were carried out in October and November 2008. Deborah will respond to your first question on overall levels of satisfaction and the figure work. Colm, who is involved in analysing both sets of figure work, will identify some of the key themes that have emerged from both surveys.
Ms McNeilly:
I do not have the details with me, but the high-level overall customer satisfaction rating was around 68% to 69%. I can confirm that in writing. Under the draft operational plan, our target is to achieve a customer satisfaction rating of 75%. I do not have the figures for the staff satisfaction rating.
Mr Weir:
Do you have a baseline with which to compare those customer satisfaction figures with those of similar Departments?
Mr O’Reilly:
Comprehensive benchmarks are available, and those are compiled from surveys that have been conducted by asking similar questions across GB Departments.
Mr Weir:
Do those show that DFP is in a similar position, or does it perform better?
Mr O’Reilly:
In some areas, we are better, and, in other areas, we perform worse than average. The detail is available.
Mr Colm Doran (Department of Finance and Personnel):
As Deborah said, we achieved a satisfaction rating of 68% in the customer satisfaction survey this year, and our target for next year is 75%. Business areas across the Department have been provided with detailed analyses of their performance, and they have been asked to put in place improvement plans for customer satisfaction and staff satisfaction for 2009-2010. In fact, at the next senior managers’ forum, they will give presentations to the departmental board on the actions that they propose to take. Although there are some high-level actions at departmental level, business areas will take specific actions to improve satisfaction in their own areas.
Mr Weir:
Are any specific areas causing concern to the Department at present?
Mr Doran:
Do you mean on the staff side?
Mr Weir:
Either the staff or customer side — you have said that work will be done on actions that must be taken. Leo mentioned that certain areas are performing above expectations while others are weaker. Are alarm bells ringing in any particular areas?
Mr O’Reilly:
Yes, in areas where there are lower levels of staff satisfaction. There is a consistent pattern to that across the public sector.
In general, a higher level of staff satisfaction is found among people who work in smaller operations, or policy-type areas where there is a clear link between what everyone is doing and what they are achieving. Much lower levels of staff satisfaction are found in areas such as benefits processing, where people feel part of a depersonalised factory, and, consequently, demotivated.
Unsurprisingly, in the Department of Finance and Personnel, a particular area of concern is the continuing low level of staff morale in Land and Property Services (LPS), which is something that we are working on. Within LPS, there are variations between the part that deals with rate collections, which can be individually challenging to staff and, for example, the Ordnance Survey, where morale is much higher because people find their work intrinsically interesting.
There is a mixed picture and a much larger spread of results on the customer side of the Department. The Departmental Solicitor’s Office (DSO) achieves a very high satisfaction level, because people appreciate the quality of service provided by the lawyers. Examples of more challenged areas include —
Mr Doran:
There are areas in which there are more operational interfaces such as LPS and some of the other business areas, which is specifically why each business area has been asked to put in place improvement plans that are specific to their issues.
A key part of the Department of Finance and Personnel’s operational plan involves specific targets for its move into providing shared services for all the other NICS Departments.
Mr McNarry:
On the back of the issue that Peter raised, in a previous session, we talked about comparisons with the private sector. I now hear that the Department’s ambition is to raise its customer satisfaction rating from the present 68% to 75%. Is that target ambitious enough? Does the Department believe that the public would accept 75% satisfaction from the private sector? I do not; I am asking whether you do. How is that scaled by the Department?
Mr O’Reilly:
There are two scales. What the Department is achieving at the moment is one, and the second scale is what we observe as the norm across the public sector in general in comparable public-sector organisations.
Ms McNeilly:
We have already talked about the nature of the business areas, meaning that some of them can be at different ends in respect of customer satisfaction. The overall customer satisfaction rating for the entire Department takes into account the averaging effect of some business areas, such as the high-performing Departmental Solicitor’s Office, and the lower performers — for example, the LPS.
Mr McNarry:
If 68% is the Department’s average, and you are saying that the rating for the Departmental Solicitor’s Office is pretty high, there must be some terrible performance areas that are pulling down that figure. Can the Committee see a breakdown of those figures?
The Departmental Solicitor’s Office is said to be high, but what is it? Is it 80% or whatever? I am not sure how the Department conducts those surveys, but can the Committee obtain a site-by-site ratings breakdown? The Committee may be able to help the Department by considering what it can do to help improve certain sectors. I do not believe that it is comparable. I do not think that the private sector could live with that level of customer satisfaction; it would be out of business.
Ms McNeilly:
I think that the intention is to publish the customer satisfaction survey on the Internet.
Mr Doran:
The results of the customer satisfaction survey will be published on the Department of Finance and Personnel’s Internet site, and the staff attitude survey will be published on our intranet site. We do not have the figures for the business area splits to hand today, but we can provide those at a later date.
Mr McNarry:
How did you go about producing this survey? How did you get those facts and figures?
Mr Doran:
Within the Department, there is the Northern Ireland Statistics and Research Agency (NISRA). With the help of NISRA’s professional statisticians, who are experienced in designing surveys and in providing benchmarks, we produced our survey.
Mr McNarry:
Did you get customer responses from the public?
Mr Doran:
Each business area identifies its customers. As you will appreciate, many of the Department of Finance and Personnel’s customers are other Departments. However, there are business areas that identify external customers. We survey those customers as identified by each of the business areas.
Mr McNarry:
What is the sample number?
Mr Doran:
Again, I do not have the figures for this year, but I think that approximately 1,300 customers were issued with the survey. We can check those numbers, and those numbers —
Mr McNarry:
Some 1,300 customers? In the private sector, that number of people would not give approval for a good hairspray.
The Chairperson:
It reflects a lot of opinion polls. Most of us are starting to lose interest in hairspray. [Laughter.]
Dr Farry:
To be fair, it is statistically split; it is about 1,000 customers.
The Chairperson:
That is especially the case if there is a high level of participation.
Mr O’Reilly:
The people at NISRA do that work. The agency is part of the Department, and its professionals do many things such as household surveys. I rely largely on their advice to ensure that we get it right.
The Chairperson:
Following on from David’s line of inquiry, I am not clear about whether there is a strategic context. The Department has set a new threshold for customer satisfaction of 75% — that is what we are ultimately aiming for. Can we measure and reward performance, and can we identify and, if necessary, sanction underperformance in a strategic context rather than simply lurching from one kind of target to another? We are working from a mediocre threshold.
Mr O’Reilly:
We are working to improve where we are.
The Chairperson:
I know that; however, is there a strategic target, and will it take two, three or four years to achieve that?
Mr O’Reilly:
We need to do more work on comparable organisations. The simple fact is that some of the things that DFP does intrinsically are not always the things that customers want it to do. For example, in managing relationships with other Departments — although we try to manage those effectively, and we have pretty good relations with other Departments — sometimes, the nature of our work is to challenge and to take issue with people’s actions. That sometimes leads to the perception of lower customer satisfaction with outcomes. That is just one factor that we need to take into account.
Mr McNarry:
Is there a strategic process whereby someone can say that that threshold of 75% is not good enough or ambitious enough? Is the question “can we do better?” factored in? I know that the previous threshold was 68%, but that was poor anyway. Is there a reality check, or is there a lack of ambition?
Mr O’Reilly:
It is not a lack of ambition; it is a reality check. Targets should be stretching but realistic; however, if we set a 90% or a 100% target, we are pretty sure that we would not achieve such a target quickly over one year. Therefore, we have set a progressive target of 75%.
The Chairperson:
As regards the overall issues that members raised today — and members who have yet to speak will raise some further issues — will the Department come back to the Committee before the plan is finalised so that we can see the extent to which we have effectively interacted? Will that be helpful? David, are you finished asking your questions?
Mr McNarry:
I am finished, but I want to come in on Peter’s point.
The Chairperson:
It was helpful to open up the discussion.
Mr F McCann:
It seems to be a consistent pattern in other areas that the satisfaction rate drops when Departments interface with the public. Is there a strategy that allows you to deal with that? The satisfaction rate drops when there is any interface between staff and the public, whether in local government, the Housing Executive, or any other area.
Mr O’Reilly:
The lesson is that there is much more work to do in the area of interface with the public and in improving the public’s perception of the quality of the interface with whatever part of Government with which they are dealing. The Government may take actions that one may not like, but, generally, people can distinguish between that and the ability to receive a proper service or a proper and timely response to queries. The general lesson across the system is that there is more work to be done in that area.
Mr F McCann:
I think that is correct. Departments that interface with the public have increased sickness levels; that seems to be the case across the board. On the back of what David said, the target that you have set for a 75% satisfaction rate is quite low. There must be an achievable target that is well above that.
The Chairperson:
We will take note of the fact that you resolutely resisted the temptation to invite politicians and parties to subject themselves to such a survey.
Mr McNarry:
What are the results of the survey on customer satisfaction with the Planning Service?
Mr O’Reilly:
A couple of years ago, DFP consciously decided to carry out regular annual surveys, conducted consistently, in order to measure performance from one year to the next. We do that in the full knowledge that it will not always give us results that would be pleasing to us or to other people.
The Chairperson:
The current rating is 68%, and we are aiming for 75%. What was the rating when you started the project?
Mr Doran:
The 68% rating is an improvement on last year, when the rating was 65%, so we are on the right track.
Mr F McCann:
Every four years, we go to the public for a satisfaction rating.
The Chairperson:
Yes, and you keep getting a bigger vote every time — blah, blah, blah.
Mr Hamilton:
I will ask a couple of questions together to get us moving along. There is understandably much concentration on Civil Service reform projects and the major work that the Department is taking forward internally and on behalf of the Civil Service overall. The draft business plan states that major progress has been made on delivering those reforms.
There is a target for the implementation of HR Connect by August 2009. Will you remind the Committee why that target has slipped from the initial target of November 2008, as it was in the Programme for Government? There is also a target for the continued roll-out of the principles of Workplace 2010 by March 2010. I support that target, but it could be argued that it is a bit too flabby and generalised. A target for continuing to roll out the principles is not particularly specific; it is quite generalised. One could argue that merely doing anything could achieve that target.
Mr O’Reilly:
If my colleague Derek Baker from the previous evidence session were still here, he would have given you a comprehensive and lengthy response on the current status of HR Connect. The basic reason is that there has been a delay in the payroll roll-outs. Industrial pay is the final core element of pay that has still to be addressed, but the remaining tranches of the programme are being rolled out according to their original schedule. I saw in an email yesterday that vacancy management started this week.
The focus is on getting the non-industrial payroll correct first, and then the final element — the industrial payroll — which is quite a small final component of the programme; I think that there are only 1,300 people involved in that.
The other question was about Workplace 2010, and the draft business plan reflects the shifting position that we are in. We had a separate session with the Committee on that issue. I suppose that is why the draft plan lacks some precision. We may have to consider that again in the coming weeks and months as we develop a firmer alternative programme for the roll-out of the Workplace 2010 principles.
Mr Hamilton:
It reflects the fact that decisions have still to be taken about an alternative programme.
Mr McQuillan:
The draft plan states that NI Direct is:
“a critical part of the reform agenda”
and
“a Departmental priority in 2009-10”.
Phase 2 of NI Direct is to be rolled out for all remaining Departments from October 2009. Why have no milestones or targets for the project been included as a roll-out to any additional business area in 2009-2010? There is also a target to:
“Deal effectively with at least 50% of enquiries … at first point of contact.”
That target is the same as when it was introduced in 2008. Does DFP not want to aim higher, or is it content for 50% of people who contact NI Direct to be dealt with effectively?
Mr O’Reilly:
The roll-out of NI Direct comprises a number of phases. The first is the roll-out of the initial telephony for the Planning Service, LPS and the General Register Office (GRO). That is now operating, although, inevitably, there were some initial hitches and glitches. However, those are being worked on.
In general, the biggest and most obvious lesson from the roll-out of those programmes is that getting the telephony right is the easy bit; getting the people to work and to respond to calls is also relatively easy. The difficult bit is when the back organisations have to restructure their business processes to allow them to respond to this type of public interaction, which is completely different, in many ways, from what they had done previously.
The second phase is the roll-out of the new website for Northern Ireland, which is a public-sector portal. That is due to go live at the end of March, with an initial bedding-down period that we expect to last until June. The longer-term phase 2 of NI Direct is the extension of the principles to other Departments. There is no precision surrounding that phase because further work must be done in order to decide the exact sequencing and timing of the venture. There are a number of constraints, the first of which is resources, but, more importantly, all Departments that are going to be involved must understand what they are taking on. It is not just about telephone numbers and answering phone calls. It is about a commitment to the fundamental restructuring of business operations in order to respond to this type of customer interface.
The other point that you raised was about the target to deal effectively with 50% of enquiries at first point of contact. The 50% that we refer to is what is called “one and done”. In other words, there is one single customer interaction, in which the answer to a query is given by the telephone operator in NI Direct. By definition, the NI Direct telephone operators are not specialists in certain areas, but, as we improve their screens to allow them to answer more questions directly, they do not have to refer the customer on to the relevant agency. For example, a query about the cost of an MOT inspection, which is one of the most common queries, does not have to be passed on to the Driver and Vehicle Testing; it can be answered immediately. There is a range of queries, and, as we become more experienced, we can identify the most common questions that people ask, so that they can be answered immediately and do not have to be handed back or passed on to someone else. As Colm has reminded us, the 50% target is consistent with the target that was set out in the PSA objective.
Mr Doran:
That is correct; as more scripts become available to the NI Direct telephony staff, they will be able to improve the number of “one and done” calls that they can deal with.
Mr McQuillan:
Is that 50% target currently being met?
Ms McNeilly:
Phase 1 has gone live, and different parts have gone live at different times. Data is currently being collated and assessed. I hope that we will then be able to see the figure work from that assessment. That action is being taken at the moment.
Mr McQuillan:
When will those details be available?
Ms McNeilly:
I hope that we will have those details within the next six to eight weeks.
Mr O’Reilly:
We will come back to the Committee with the answer to that question.
Mr McNarry:
I have some questions about PEDU. On page 9 of the operational plan, there is a balanced scorecard of results. As the target currently stands, it could be met by one review by PEDU in 2009-2010. Does that suggest that the performance and efficiency delivery unit is currently not an accepted mechanism to help Departments to achieve higher levels of performance and efficiency? If you agree that that is the case, will you have a stab at telling us why? What are the implications of that for departmental budgetary processes to date?
Mr O’Reilly:
PEDU’s key focus to date has been on planning, but, in the background, quite a lot of work has been done on putting in place the delivery framework, to which I referred in response to Mr O’Loan’s question. The Committee has also been notified that PEDU is carrying out work in Land and Property Services. Your more general question is: why is PEDU not involved in more areas?
Mr McNarry:
That is correct. PEDU was established with quite a bit of fanfare, yet so far only one review has been carried out, and the unit seems to be working with only one Department. Perhaps you might wish to read the Hansard report of the meeting that Mr Pengelly attended, during which he answered many of those questions. He thought that he might be breaking the mould but that he was having difficulties with the unit being accepted. The problem is one of acceptability. What damage, if any, is that causing to the budgetary process?
Mr O’Reilly:
I am not clear about the implications for the budgetary process; I will check that separately. On the general point, it is no secret that it is difficult to get the PEDU model to work within our present structures. That is different from the way that it has worked in Whitehall, where there is a single Administration with one political party able to direct such matters. The model has to gain confidence.
As I think I have told the Committee before, unfortunately, it simply will not work if Departments feel that it is an imposition, or that it will, as they see it, unfairly criticise them or be used as a further stick with which to beat Departments. There must be a process of building confidence, which takes a bit of time. We have been seeking to do that, and making some progress along the way, but, for the concept to work as effectively as it should do, there will have to be much more engagement with a wider range of Departments and areas across the system.
Mr McNarry:
Do you accept that the purpose of the model is to get on top of monitoring and to evaluate the performance of Departments?
Mr O’Reilly:
That is why I made the point about the delivery framework.
Mr McNarry:
However, if it is not doing that, it is leaving quite a gap.
Mr O’Reilly:
There has been a gap and an absence of robust systems to monitor delivery. When monitoring delivery, one can begin to identify areas of concern where targets are not being met and areas where the involvement of PEDU and other interventions should be considered.
Mr McNarry:
We have identified the problem; how, and when, do you think you are going to crack it?
Mr O’Reilly:
Part of the solution we are working on is to put in place delivery framework arrangements, which will give a much higher profile to performance across the system. We will continue to raise awareness at all levels in the system about the importance of delivering against targets and delivering performance.
We hope that that, in turn, will raise people’s more general awareness of performance and delivery issues and of the way in which a unit such as PEDU can help Departments to identify weakness in delivery.
Mr McNarry:
I accept that. From a politician’s perspective, it is pretty easy to criticise the lack of performance; I would certainly prefer to praise good performance. However, if one does not have the information, one is subject to other people’s criticisms, and one does not have a defence.
Mr O’Reilly:
What was your question about the budget?
Mr McNarry:
If PEDU is not working in its broadest sense and is not monitoring, that results in an inability to pick up things. I understand that PEDU is there to help and guide Departments, so is the absence of a functioning PEDU having an effect on the budgetary process?
Mr O’Reilly:
There is an absence of a rigorous review of how people are performing against their targets and, hence, against their use of resources. I do not think that that impacts on what I recognise as the budgetary process, which is the process of managing, planning, using and redeploying resources. That process is continuing.
The Chairperson:
The Committee has an outstanding request for feedback from the PEDU assessment process. That has been with the Department for some time, and it is overdue. That feeds into the issue that David has addressed.
Mr O’Reilly:
I will chase that up immediately after the meeting.
Mr McNarry:
We spot things on the Committee. Perhaps we do not always speak the same language as you do, and, if we spot something, we may have difficulty answering it, so we ask you to help us to answer it. If we see, for want of a better word, evasiveness, we will look at that more deeply.
The draft operational plan includes a target for underspend in the Northern Ireland block to be “within acceptable tolerance”. That is a beautiful phrase. What is an acceptable tolerance, and to whom is it acceptable? If underspend is acceptable, why is that not stated in the plan?
Mr O’Reilly:
The plan contains two targets for underspend. A separate, quantified target of 1·5% is set for DFP. Underspend for DFP has a quantified figure and underspend for the Northern Ireland block does not, because the departmental performance, which is managed by Deborah and her team, is fully and totally in our control, hence our responsibility and my accountability. We know precisely who is responsible for that target.
Mr McNarry:
The interest in the Northern Ireland block is on our table now. How do you explain to and convince those who designate and who are acutely examining at the Northern Ireland block, that underspend has an acceptable level of tolerance? I do not know whether there is an acceptable tolerance of underspend, but if you were to give me a mathematical equation for it, I would be interested.
Mr O’Reilly:
As always with such issues, several factors could be considered in determining what an acceptable level of tolerance might be. The figures for how all other Departments perform in the area of underspend across the entire system in the UK, which we have provided to the Committee on a number of occasions, could be considered. Moreover, one can consider how Northern Ireland has performed over the past number of years. As you said earlier, we should set targets in order to improve those figures substantially.
The Department has a critical role to manage the block and to reduce the total numbers in order to achieve full spend against the overall block position. We still depend substantially on how that is managed by individual Departments and on the accuracy of the forecast figures that they provide. Therefore, there is less of a direct drive control over the precise figure. However, we still have a substantial responsibility to manage the system in such a way that ensures that the figures are as low as possible.
Mr McNarry:
As you said, you are the owner of that target, and “L O’Reilly” is printed beside it.
Mr Weir:
It could be a different L O’Reilly.
Mr McNarry:
He has already admitted to it. You can work with the target of 1·5%. R2.4 mentions “acceptable tolerance”. Although I do not like to issue challenges, will you outline the acceptable tolerance for Departments other than DFP?
Mr O’Reilly:
Acceptable tolerance should be anchored and linked to two conditions. A Department’s performance should be no worse than the performance of Departments in Northern Ireland in the past. Furthermore, Departments must ensure that their performance is as good — or better — than the average performance of all Whitehall Departments. I am reluctant to quote precise figures, because I want to run the numbers past —
Mr McNarry:
You have been kind enough to outline the 1·5% for your Department. Chairman, is it acceptable to request a ballpark figure for other Departments? There has been much debate on underspend. The Committee is participating in that debate with no indication of what the Department considers an acceptable level of tolerance. The level that you consider acceptable may differ from the Committee’s opinion, but it will provide a basis on which we can work.
Mr O’Reilly:
We arrived at the figure of 1·5% after exchanges late in 2008 with the Committee about acceptable levels of underspend.
Mr McNarry:
That is an incomplete statement that needs to be completed.
The PKF report on forecasting and monitoring was published in June 2007, and the business plan for 2009-2010 includes a target to complete an internal review of the PKF recommendations by September 2009. What will that review examine? Does it mean that, more than two years after publication, you are unable to assure the Committee that the recommendations have been implemented effectively?
Mr O’Reilly:
The target has not been completed. A follow-up internal review is ongoing. As members might recall, the PKF recommendations were addressed to DFP and to all individual Departments. Implementation of the recommendations was rolled out in all Departments. In a sense, we intend to ask individual Departments what steps they have taken to implement the recommendations in that report that were tailored to their Departments. Improvements in the quality of financial management across the system and, for example, in underspend levels will provide a positive indication that Departments are implementing the PKF recommendations.
Mr McNarry:
Do you think that it is necessary to cover Departments’ responses to PEDU?
Mr O’Reilly:
PEDU was separate.
Mr McNarry:
Yes, but it is important if the Departments are not receptive to PEDU.
Mr O’Reilly:
The cause for Departments to be receptive to the PKF report’s recommendations is completely different from PEDU. The PKF report makes fundamental recommendations, the acceptance of which is not optional. What PKF recommends is fundamental good practice, and I do not think that anyone could take issue with that. Therefore, we need to follow up the implementation of those recommendations verbally and see if the adoption of the report’s recommendations is feeding through into better financial performance across Departments.
Mr McNarry:
Are you in a position where you cannot assure the Committee that the recommendations were implemented effectively?
Mr O’Reilly:
I can tell the Committee that the report was completed and that we did further work with all Departments to ensure that they were aware of what the report was recommending and that they took follow-up action to ensure that the recommendations were adopted. The purpose of the exercise this year is to take stock on where we have got to with those recommendations and report back to the Committee and to other Departments.
Mr McNarry:
When will you report back?
Mr O’Reilly:
It will be September. We are doing it to keep the review on the agenda, because it was important and very useful. We do not want the review to drop off your agenda or off ours — not that it is likely to drop off yours.
Ms J McCann:
On page 10 of the operational plan, there is a target to develop and implement robust and effective corporate governance arrangements for the Department of Culture, Arts and Leisure (DCAL) by 30 June 2009. What is the Department’s role in that, and does it have responsibility for the lack of effective arrangements at present?
My second question relates to the 95% of public procurement to be influenced by Centres of Procurement Expertise. The target for that in the Programme for Government is March 2009. Why does the business plan include a similar target for March 2011, which is one year after the business plan has ended?
What implications will the target to implement the resourcing plan by March 2010 have on staffing levels? Last year, the Committee was informed that the reduction of over 2,000 Civil Service staff set out in the Fit for Purpose document had been achieved. What were the Civil Service staffing levels at the start of 2008-09, and what are they now?
Mr O’Reilly:
The arm’s-length body review arose from a Public Accounts Committee (PAC) report last year into the management of relationships with arm’s-length bodies. One key recommendation in that review was for a clear stocktaking exercise of how Departments implement good practice in their relationships with arm’s-length bodies. There is plenty of sound guidance in that area, but there is not the same level of assurance that that guidance is implemented in practice.
The Department created a small team of two people to work specifically in response to the PAC report’s recommendations for up to a year. The first part of that exercise was to focus on issues around DCAL, because there are ongoing issues that involve the Audit Office concerning the Northern Ireland Events Company. The Audit Office also identified wider issues with regard to DCAL, because, despite its small size, it has many arm’s-length bodies. There were substantial issues about the way in which DCAL managed its relationships with those bodies.
The first stage of the exercise was to review the arrangements in DCAL and then roll out those lessons across the Departments. That has been done, partly using the analysis contained in the Audit Office report and the PAC recommendations, and partly using a report that the Chartered Institute of Public Finance and Accountancy (CIPFA) drew up for DCAL on issues that it needed to address in the management of its relationships with arm’s-length bodies.
Currently, we are running a series of training courses for people in Departments who manage those relationships. Those courses are headed up by me, the Comptroller and Auditor General, John Dowdall, the team in the Department that is undertaking the review, and there is also participation from various Departments.
The final question asked whether DFP is responsible for DCAL’s position. We are responsible for ensuring that guidance is in place, for ensuring that it is disseminated and understood, and for monitoring any cases in which it becomes apparent that the guidance is not being followed. Each and every Department also has a core responsibility to manage their relationships with their arm’s-length bodies effectively, so I think that the direct online responsibility rests with the individual Departments.
The target regarding the 2009-2010 budget is a standing target that we want to keep in place and continue to monitor year on year. The figure that was achieved for 2007-08 was —
Ms McNeilly:
In 2007-08, DFP achieved 93% or 94% for its own area. I do not have the figures for the other Departments.
Mr O’Reilly:
The figure is rapidly increasing towards 95%, but we want to keep that in place until the target is achieved. We want to keep that in place even when the target is achieved. Perhaps Deborah will talk about workforce numbers.
Ms McNeilly:
The target is about NICS level resourcing numbers. I do not have the figures in relation to NICS resource numbers, but we can undertake to get those for the Committee.
Ms Purvis:
I want to go back to a point that I made when Derek Baker was present. I am sorry that he has left the meeting. Page 11 of the business plan refers to pay strategies. Derek said that the Senior Civil Service target was in relation to a pay award, but it is included as an NICS pay strategy. R4.3 states:
“Put in place pay strategies:
…
- Senior Civil Service pay by 30 June 2009.”
In my mind, that means a pay strategy not a pay award.
Mr O’Reilly:
The term is used differentially in those three items in R4.3. Colloquially, what we refer to as the Senior Civil Service pay strategy is, effectively, the annual pay strategy. The pay strategy for the other two groups — non-industrial and industrial — could be annual or multi-annual. The point that you are making is entirely right: that could be interpreted that there will be a new Senior Civil Service pay system by 30 June 2009 as distinct from a strategy that draws on the frameworks.
Ms Purvis:
On page 11, R4.2 refers to managing absenteeism. As far as I am aware, the target for the current year is 9·3 days for each employee. The paper refers to 9·5 days for each employee. Page 18 includes a target of 8·5 days. I take it that the target on page 18 specifically refers to your Minister and your Department. Is there a consistent target across all Departments? If so, what is it?
Mr O’Reilly:
Over a period of four or five years, global targets were set for the Civil Service as a whole. However, it was recognised that individual Departments start from very different places, often with rational reasons. As we discussed earlier, Departments such as the Department for Social Development — which has a large public interface — tend to have higher levels of sick absences than a Department such as the Department of Enterprise, Trade and Investment, which has a different type of customer interface.
The conscious decision was taken to apply the overall target, but how that was disaggregated among individual Departments would be tailored to recognise where they were and the progress that they had to make rather than simply setting a single target applicable to every Department.
Ms Purvis:
If one considers the annual target, does that not skew the figures, particularly if one Department has set its target at 8·5 days and another that is not performing as well sets its target at 11·5 days? Therefore, when it comes to working out the average, the figures are skewed.
Mr O’Reilly:
The figures are set in such a way that achieving them ensures that the overall figure is achieved. Although they are different numbers, both targets share a requirement for substantial improvements on previous performance. Just because one number is higher than another does not mean that it is any easier for that Department to achieve. In practice, it is sometimes harder to achieve because of the nature of the relevant Department’s workforce.
Ms Purvis:
What is the Northern Ireland Civil Service target?
Mr Doran:
That is the 9·5 figure contained in R4.2 on page 11 of the Department’s draft operational plan.
Ms Purvis:
Another measure on page 11 is the resolution of equal pay issues, but that is about all the information there is. There are no specific targets.
Mr O’Reilly:
I suspect that the Department is dealing with a major range of equal pay issues at present.
I suppose that it is difficult to put precise targets, other than to seek a satisfactory resolution of equal pay issues during the forthcoming financial year. That is because how they will be resolved depends on a number of variables that are not entirely within the Department’s control, including tribunals, courts and the trade unions. Therefore, it is difficult to put precise targets against specific outcomes, but, in the coming months, there will be substantial outcomes around those issues.
Ms Purvis:
It is odd that it appears as a measure without a target.
Mr O’Reilly:
I take your point that the way that it is set out appears odd. We will consider putting a target against the measure. Certainly, we will put the name of an official against it.
Mr F McCann:
R5.2 on page 12 of the draft plan sets a target:
“to reduce paper consumption by 20% by 31 st March 2010 (from a 2006/07 baseline)”.
What is that baseline? Why is the baseline not stated in the plan, and what progress has been made in the past two years?
Ms McNeilly:
The 2006-07 baseline has been used because that takes a target that has been subsumed from a waste management plan that is already in place and which has a target to achieve certain reductions by 2011 from a 2006-07 baseline.
In other words, there is a bigger plan behind that target. The draft plan takes a snapshot for the current year but refers back to the 2006-07 baseline, because that is the point from which the bigger plan is being marked. Within the bigger waste management and sustainable action plan, the Department has a target by 2011. Therefore, it is an attempt to keep the baseline the same in both plans so that it can be monitored.
I do not have any paper consumption figures, but they are readily available.
Mr F McCann:
The figures could be provided.
Mr O’Reilly:
It is quite easy to measure paper use.
The Chairperson:
It is, on paper.
Mr O’Reilly:
We can measure it quite easily.
Mr F McCann:
That is OK — if the information could be supplied.
Page 15 of the plan includes a target to:
“Reduce air and road travel expenditure by 5% … from the 2008/09 baseline”.
What is the baseline for the current year, and how will that reduction be achieved?
Ms McNeilly:
The final figure for the 2008-09 baseline will be available when the Department completes its year-end accounts. The expenditure figure in the 2008-09 accounts will then be used as a baseline from which the percentage reduction will be measured. We will have the baseline figure when our accounts are complete, and we will take 5% off that.
Mr F McCann:
The Programme for Government states that a digital inclusion programme will be delivered by October 2009, implying that the programme will be implemented by that date. DFP’s current business plan states that the programme will be completed by March 2009. Why does C2.3 on page 13 of the plan contain a target to produce a digital inclusion programme by October 2009?
Ms McNeilly:
You are right about 31 March 2009.
Mr Doran:
One target included in PSA 20 of the Programme for Government is to:
“Reduce barriers to citizen access … through the delivery of a Digital Inclusion programme.”
The target date for that is October 2009, which is consistent with the target in our business plan.
Mr O’Reilly:
However, Mr McCann is correct about the original target.
Ms McNeilly:
The target is the end of the financial year in our 2009 business plan.
Mr O’Reilly:
Does that imply slippage on the targets?
Ms McNeilly:
No, because the target in the Programme for Government is October 2009.
Mr F McCann:
A target on page 15 relates to the performance of DFP’s Assembly section. Why does DFP not include its performance in the important area of responding to Committee requests? Is that currently measured and, if so, how?
Mr O’Reilly:
The target at IP2.3 on page 15 relates to Assembly questions. You are right that Committees are not mentioned. You raised a good point because they should be included. We will insert an additional performance target, IP2.4, on Committees.
Dr Farry:
The targets on page 17 of your plan relate to the effectiveness of DFP’s board. Is it sufficient to aim for only 55% of staff to believe that DFP’s senior management are “visible, accessible, and approachable.”?
Mr Doran:
The figure of 55% is based on information from our NISRA colleagues and is above the benchmark for other comparative organisations in the public sector. We are seeking to improve that percentage, but it is higher than the benchmark of other organisations.
The Chairperson:
Are you reassured?
Dr Farry:
I guess that it is all relative.
A review of the board’s effectiveness is to be completed by June 2009. Will that be carried out independently, and what will be examined?
Mr O’Reilly:
Yes, and it is under way.
Mr Doran:
I am not sure of the detail, but it is being done.
Mr O’Reilly:
We involved an external person, who, in the next week or two, will talk to each board member individually, including our external members. He or she will assess our performance as a board against a set of relevant matrices.
Dr Farry:
Will the Committee see the outcome of the review? There is no reason why not, is there?
Mr O’Reilly:
No, there is not.
Dr Farry:
That is great.
Data security is discussed on page 18 of your plan. Why have all DFP’s business-critical systems not been properly accredited already?
Mr Doran:
That is a measure rather than a target. We want to continue to ensure that all systems are accredited, and that will be a measure of the success of the review of the data protection action plan.
Mr O’Reilly:
Much work on data protection is going on in DFP and across the system. When we attend departmental board meetings, we spend quite a bit of time on data security, as you would imagine.
Dr Farry:
Why will it take a further year to advise all DFP staff of the mandatory security policies in the security policies framework? Why do you take a year to do that rather than sort it out straight away?
Ms McNeilly:
All staff in the Department have been required to undergo online mandatory training over the past month on data protection and data security. That is one step; other steps will be taken with regard to security as we go through the year. So far, all staff had to undertake the eLearning package on data security issues. So that is one portion of work that is already completed.
Dr Farry:
I imagine that, in the light of recent events, that is flagged up as a high-risk area?
Ms McNeilly:
It is on the Department’s risk register and is a frequent item on team briefs as well, and we have underpinned that by having the eLearning, which has been mandatory for all staff.
The Chairperson:
It is clear that “advised” is not the word that we intended to use or that is best suited to the scale of the response. You should take a look at the language. That occurs in respect of a couple of the measures outlined in the plan.
Dr Farry:
On a totally different topic: the Minister has encouraged Departments to apply a 10-day target for payment of invoices, which is a response to the economic downturn. In the event that we come out of the downturn in the near future, is it expected that that target will remain in place? The change in the system has been created to enable that to happen rather than go back to the old 30-day terms?
Mr O’Reilly:
You ask whether we will go back to a different target in the future. That is ultimately a matter for the Minister. He has adopted this 10-day target very enthusiastically, and he has been pressing for strong and clear action.
It is interesting to see what this measure has revealed. The previous target was 30 days. For those Departments that now use the Account NI system, we can monitor very precisely how quickly invoices are processed through the system and paid. Performance across Departments is variable. We have identified a shortfall against the 10-day target in DFP. That has been very valuable in prompting us to carry out further work to try to understand why and where delays are happening in the chain. Once the payment is keyed into the Account NI system, payment can be instantaneous — within hours, or in a day at the very most. It is the processing of invoices that causes delays at present. We are focusing on that.
Dr Farry:
My point is that, once you have set up the system to make payments within 10 days, there is no reason that one would want to go back to payment within 30 days once we are out of the context of recession. In that respect, one can be as efficient in the future as one is today.
Mr O’Reilly:
Ultimately, as I have said, it will have to be a matter for consultation and decision by my Minister. There is one slight wrinkle with this issue. There is a statutory provision that requires invoices to be paid within 30 days, so I imagine that that will remain in place. If we do not pay within that period, the payee is entitled to receive interest. I do not think that it is intended to shorten that timescale.
The Chairperson:
The practice will be road-tested and approved in current circumstances. Logically, there is no reason that you should slip back from the new standard, even if the statutory requirement allows for a longer period.
Mr O’Reilly:
In the future, when all Departments will be using Account NI, that information will be available instantly and centrally for reporting to the Committee and to others.
The Chairperson:
Leo, thank you very much. That was another useful exchange. I have a number of points, however. The draft operational plan has set out that the business plans at directorate and agency level would be in place for 1 April, which is next week.
On behalf of the Committee, may I request that finalised plans for each of the directorates and the two agencies — Land and Property Services and NISRA — are sent to the Committee. They are useful for scrutiny purposes, so it would be helpful to see them.
The Committee raised some issues about targets not being specific, challenging or measurable enough. Our concern is that, if they are not amended, they will, perhaps, be ineffective in driving and monitoring performance. I reiterate that the Committee would like confirmation that the issues that it has raised have been addressed before the plan is finalised. Therefore, it would be helpful if you could give us a follow-up response to those matters.
Mr O’Reilly:
We will respond quickly. We have noted all the points that were raised, and perhaps we might come back with a quick summary of how we intend to deal with them.
The Chairperson:
The speed with which you address those points is a matter for your due diligence; however, we are up against a tight time frame.
Mr O’Reilly:
The wording on targets, and so forth, can be dealt with fairly quickly.
The Chairperson:
I would imagine so. I thank you and your colleagues for the information, and we look forward to the next occasion on which we meet.