NORTHERN IRELAND ASSEMBLY
COMMITTEE FOR
FINANCE AND PERSONNEL
PSA Targets
24 June 2009
Members present for all or part of the proceedings:
Mr Mitchel McLaughlin (Chairperson
Dr Stephen Farry
Mr Fra McCann
Ms J McCann
Mr David McNarry
Mr Declan O’Loan
Witnesses:
Mr David Orr ) Department of Finance and Personnel
Ms Deborah McNeilly ) Department of Finance and Personnel
The Chairperson (Mr McLaughlin):
We are joined today by David Orr, director of the corporate services group; and by Deborah McNeilly, finance director. Members have had the opportunity to read your paper, so we will move straight into the discussion.
Mr David Orr (Department of Finance and Personnel):
That is fine. Although it has fallen to Deborah and me to report on the issue, other senior colleagues have details about the matter, so if we do not know the answer to a question, we will come back to you.
The Chairperson:
We understand.
Mr O’Loan:
Good morning, David and Deborah. I am sure that you have been anticipating a question about PSA 20 1.1b. HR Connect was supposed to be fully implemented by November 2008; however, that was not achieved. The remaining elements will now be implemented later in 2009-2010. Therefore, the status of that target should have been more straightforwardly described as not achieved rather than the explicit wording that was used.
Will you update us on where you are with that and on what steps you are taking to resolve any remaining issues and correct previous errors? The accumulation of evidence, which is more than anecdotal, shows that there are serious problems, that there is a great deal of dissatisfaction in the Civil Service with HR Connect, and that those issues have not been resolved. The status of the target should, therefore, have been described, straightforwardly, as not achieved.
Mr Orr:
I think that departmental officials are to brief the Committee on HR Connect services next week; Derek Baker will be able to answer all your questions in detail then.
I take your point about the reporting of the target’s status. The target was not achieved by the date set, and the last phase, which deals with the industrial payroll, will not be fully achieved until this summer.
You said that staff have had problems and issues with HR Connect. It is important to remember — I am sure that Mr Baker will say this next week, too — that the system that is being introduced is absolutely massive. The initial teething problems in November, which were to do with the salary phase, have not been tackled as quickly as we would have liked. The HR Connect service deliverer has further work to do on that to improve its performance. I appreciate that that has been a cause of concern for staff. One of HR Connect’s priorities is to rectify that problem.
Mr O’Loan:
I stick to the point that the target should have been recorded as not achieved; your explanation is unsatisfactory. Saying that the target for HR Connect services for personnel and payroll programmes was achieved means that the service was fully operational, not that the system simply existed. In every sense, that target has not been achieved.
Mr Orr:
I take that point.
Ms J McCann:
As regards PSA 20 1.1e, the Department said:
“Following termination of the Workplace 2010 PFI procurement, a review of alternative means of achieving the objectives of the programme is underway.”
What initial plans have been made to achieve the objectives of the programme through alternative means? Have any target dates been set?
Mr Orr:
We have a two-stranded approach: the short term and the medium to long term. In the short term, using the capital funding from 2009-2010 and, indeed, some from 2008-09, we are refurbishing buildings in accordance with Workplace 2010 principles.
For example, at the beginning of April, the Department of Culture, Arts and Leisure moved from the Interpoint centre to the Causeway Exchange, which has been fitted out in accordance with Workplace 2010 principles. Staff from the Department for Social Development are moving to Lesley Exchange, which has also been fitted out in accordance with Workplace 2010 principles. We are doing what we can with the capital that is available to us to refurbish and fit out buildings in accordance with those principles.
In the medium to longer term, we are producing a completely new business case for the Government office estate.
It would only be right to alert the Committee to the key issue, which is that, given the state of the property markets and the difficulty in securing debt finance for private finance initiative property-related deals, a public-private partnership does not look likely at present. Therefore, it will have to rely on a conventional public expenditure; as you will appreciate, that will be a challenge. We are redoing a strategic business plan for that.
Ms J McCann:
Have you any idea when that strategic business plan will be completed?
Mr Orr:
I have to meet an internal target for the outline business case — the programme business case — which is the beginning of September 2009. You will appreciate that it is a big investment programme and that, therefore, we want to ensure that the figures are as correct as possible.
Ms J McCann:
Has all the money invested to kick off Workplace 2010 been lost?
Mr Orr:
I would not say that it has all been lost; much good work that was done to develop the Workplace 2010 specification is being used. There is also much better information about the condition of our estate and about what needs to be done to existing buildings. That is all being utilised fully. However, you are right to say that much of the expenditure to get the Workplace 2010 programme to the point at which it had to be terminated had to be written off.
Mr McNarry:
You are both welcome. I want to deal with PSA 21 3.2. The challenge was to deliver efficiency savings of 3% per annum. The fourth column on the right of that page states that that target has been achieved; “R Pengelly” says that it has been achieved. However, the third column refers to “monitoring for the first six months”. The document states that:
“Monitoring for the first six months of 2008/09 showed that departments have delivered over £182m in efficiencies, over 66% of the required total.”
Why, if only 66% of the total has been achieved, do you say that the target has been achieved?
Mr Orr:
I asked Richard that very question, because I also noticed that only the first six months had been reported. The Minister wishes to make a statement on the achievement of efficiency savings across all Departments.
Mr McNarry:
Which Minister?
Mr Orr:
The Minister of Finance and Personnel.
Mr McNarry:
When does he intend to make that statement?
Mr Orr:
Before the summer recess, I believe. At that stage, the full savings for the entire year would be reported.
Mr McNarry:
That would be interesting. Why would we receive a misleading document? It says that the target has been “achieved”. Mr Pengelly had options: he could have said that it “will be”, “might be” or “is in doubt”; however, he said, straightforwardly, that the target has been “Achieved”. It has not. It says that:
“over 66% of the required total”
has been achieved. Are you telling me that when the Minister comes to the House he will say that 100% of the required total has been achieved during 12 months?
Mr McNarry:
I fully accept that you do not have sufficient information before you to know whether it has been achieved.
Mr McNarry:
I am grateful that you have told me what the Minister will do before recess, which is next week.
Mr Orr:
We will not know whether 100% of the required total will be achieved until the Minister makes his statement. Therefore, I accept that you do not have that information in front of you.
Ms Deborah McNeilly (Department of Finance and Personnel):
There is informal reporting to our supply colleagues in the red, amber and green format on this area. Although the comments box does not match the “achieved” box, that is what they have based their assessment on; that is the informal feedback that they have received. Obviously, they have not fully reported that in the comments box.
Mr McNarry:
This Committee can only work on accurate information. Do you agree that the information presented is wrong?
Mr Orr:
I agree that the information that you have in the progress column is insufficient for you to reach a judgement on whether that has been achieved.
Mr McNarry:
I hesitate to ask, David, but in the process column, is it insufficient on every item or on just this one?
Mr Orr:
This is one that I picked up on in particular, as did you. You ask how that can be put right. Once the Minister makes his statement, can we return to the Committee with a full explanation?
Mr McNarry:
I accept what you ask and it is not up to you; you are not “R. Pengelly”. Why put us off? The Committee was to deal with this issue today, but we have been knocked back in the hope that the Minister will make a statement to the House. It is a pity that the statement, or some indication of what might be in it, could not be relayed to the Committee.
We are working on the basis of a report that we got last week on the performance and efficiency delivery unit (PEDU). You have seen it; it is appalling and disappointingly disconnected; it says that people have not got their act together. Is there evidence to show that PEDU is driving higher levels of performance and efficiency? Will the Minister have evidence for us next week that is different from the written evidence that we received last week? Someone should read it; it tells us that things are not right.
Mr Orr:
Can I undertake to come back to you and make a personal —
Mr McNarry:
David, I will not be disrespectful; I know that you are here to answer questions. I just wish that there was someone here to answer the questions that I am asking. I find this setback very unsatisfactory, Chairman. Wimbledon is on, and it is game, set and match to me because you cannot answer those questions.
Mr Orr:
I cannot answer that particular one.
Mr McNarry:
What do we do? We are here to ask questions, yet we do not have people to answer them.
The Chairperson:
We have the only response that we are likely to get today. The witnesses will write to us. The Committee can follow up the issue immediately after this meeting and express concern that the information in the update report can be challenged and that no satisfactory explanation is made available to us.
Mr McNarry:
It is unfortunate that David and Deborah are put in this position; it is up to them what they do about it. We are talking about efficiency savings, around which the work of the Executive is built. We have been given incorrect information. We have a document that claims that targets have been “achieved”, and, if it were not scrutinised, the Committee would just pass over it and look instead at the parts marked red or amber where there are acknowledged problems. We might just skip over the parts marked “achieved” and take the Department’s word for it that the work had been done. Can we take its word for anything?
The Chairperson:
The Committee has strongly supported the idea of enhancing capacity for project management. If key dates are missed, that should be acknowledged in the traffic-lights system.
I have a particular concern in the report. Public service agreement 20, 4.3, refers to NI Direct:
“Deal effectively with at least 50% of enquiries received through the single telephone number at first point of contact.”
That, too, is denoted as “on track for achievement,” which, when you consider it, does not really tell one anything, because the Department has not had sight of the first NI Direct report. Therefore how can it pass judgement on whether it is “on track for achievement?”
Mr Orr:
The Department has some information, but it does not have that first report. However, the 50% target was for the entire period of the comprehensive spending review (CSR).
The Committee will be aware that NI Direct came into effect in October 2008, and although the Department did not meet its 50% target over the first or second month, it is expected to meet it over the period of the CSR. On average, it should be over 50%, and the Department will be able to provide some trajectory towards that target.
The Chairperson:
One really has to dig below that very bland statement to learn lessons from the introduction of the scheme. These are complicated transition processes, and people should be sensible about the problems that will emerge. There should be a culture of discussing problems, because the lessons learned can be shared; after all, “a problem shared is a problem halved.”
Mr Orr:
Absolutely. I am happy to come back to the Committee with details, reports or information on NI Direct or on anything else.
The Chairperson:
David, you still have the floor; I am sorry for interrupting you.
Mr McNarry:
That is fine; I was grateful for your intervention. Perhaps it was a sign of your frustration. Sometimes one wonders what is behind all of this.
David, from the 23 targets that were set, 12 were either not achieved or will not be achieved, which is a 50% failure rate. Would that be tolerated in the private sector?
Mr Orr:
Do you mean the PSA targets?
Mr McNarry:
Yes.
Mr Orr:
Of the 23 targets —
Mr McNarry:
Twelve have either not been achieved or will not be achieved.
Mr Orr:
Those targets that are denoted as “On track for achievement” span the 2008-09 and 2009-2010 financial years; that is why they are listed as “On track for achievement.”
Mr McNarry:
We live in an era where civil servants are paid bonuses based on performance, yet the Committee has been presented with this sort of information. How can MLAs explain such poor performance to our constituents who may have lost their jobs and are trying to find the money to pay their mortgages and put food on the table?
PSA 21 3.2 has been “achieved” yet only “66% of the required total” was achieved. How can anyone claim that that has been “achieved” when only two thirds of the target has been met?
Is that good enough? Is that how the Department works when it thinks that it is on track after meeting only 66% of a target? If that is the Department’s mentality, it will not work.
Perhaps we are dealing with a mentality problem. Departmental officials have swaggered in before the Committee and told it that everything is hunky-dory, that it should not worry and that everything is on track; yet after six months we are faced with such figures as these.
Mr Orr:
The PSA targets are a three-year programme for Government. In this document, the Department reports that 16 targets were achieved in the first year of that three-year programme. A further five targets —
The Chairperson:
Were the 16 targets that were achieved regarded as milestone targets that were programmed and timetabled? The Committee understands that these are three-year programmes, but there should be milestone targets to indicate whether problems have built up, whether the targets are being achieved early, whether there has been satisfactorily prudent delivery and whether the targets themselves are rigorous enough.
We are not waiting until the end of the three-year programme to make a judgement, nor are we wearing rose-tinted glasses, because there is a while to go yet.
Mr Orr:
You are right that some of the 16 targets that have been achieved were due to be met in the first year of the programme. However, the targets for objectives listed as being “on track for achievement” apply to the 2009-2010 financial year, and the work carried out in 2008-09 means that those items are on track for achievement by then. On track for achievement applies to those targets that are in the PSA but were not due to be achieved in 2008-09.
The Chairperson:
Yes, but the single strapline “on track for achievement” does not tell us much. Eighty per cent of the targets for 2008-09 were achieved, and the remaining 20% will be picked up in 2009-2010. However, that strapline does not tell us how many of the targets were delivered on time or give us any sense of the degree to which the aim of increased capacity for project management is developing.
Mr Orr:
Perhaps I could give an example: the target in PSA 21 5.3 relates to the reaccreditation of centres of procurement expertise (COPEs). That reaccreditation must be concluded by 31 March 2010, and the process must be initiated by 31 March 2009. The progress column shows that the contract for the reaccreditation was awarded on 13 March 2009. Therefore, the first milestone has been met. The progress column also includes information about ongoing and future work. On track for achievement, therefore, means that we are on track to achieve the target of 31 March 2010.
The Chairperson:
I would like a simple statement in response to this discussion. We can anticipate similar frustrations when we discuss later parts of the report. We are told whether milestone targets have been achieved. That is a factual statement, and it gives people the overall picture in the context of a three-year programme.
Mr Orr:
You would like to know the number of milestone targets that were due in 2008-09, how many were delivered and the level of achievement.
The Chairperson:
Yes. I also want details of any lessons learned or unanticipated problems encountered.
Mr Orr:
That is fine.
Mr McNarry:
Perhaps I could conclude on this subject.
The Chairperson:
David, I keep interrupting you.
Mr McNarry:
No; it is a good discussion, which is important, and I agree that we need more information. It is a pity that those who worked out the figures and collated the information did not, as David has done, anticipate the questions that would be asked. That makes one wonder.
David, you mentioned PSA 21 3.2, which deals with using PEDU to seek to drive higher levels of performance and efficiency. I cannot see that it is doing that successfully yet. From my understanding, PEDU is itself not efficient; it is certainly not fulfilling its role.
David, do you agree that, until recently, no monitoring and evaluation processes were in place across the Departments? That has meant that, for half the CSR period, there has been no monitoring or evaluation of 50% of the money spent by all Departments. How can that be equated with achieving a target?
Mr Orr:
Monitoring and evaluation are carried out by DFP’s various supply divisions, which monitor a Department’s performance. DFP is undertaking this particular monitoring project.
Mr McNarry:
Is that how it is being done?
Mr Orr:
Yes.
Mr McNarry:
Therefore we rely on what you might or might not achieve. Will you tell us what you will achieve?
Mr Orr:
This is DFP monitoring the achievements of other Departments.
Mr McNarry:
Wow. I am bust. I have nothing more to say until I get to my next question. I am exhausted.
The Chairperson:
You have the floor. Are you finished?
Mr McNarry:
Yes, thank you.
Ms J McCann:
I want to ask about the Civil Service sickness absence target, on the back of what Mr McNarry had to say. That target is described as being no longer able to be achieved. Why does it not simply have “not achieved” status? Will the target of 10·2 days per employee be carried forward into 2009-2010? What was DFP’s sickness absence target for 2008-09, and was it achieved?
Mr Orr:
Target 4.4.1 should read “not achieved”; I am sorry that is does not. “No longer able to be achieved” is a status indicator that we use in-year to show that the target will not be achieved. It really should have been described as “not achieved”.
Ms McNeilly:
We were waiting on the validation of the figures before we could describe the target as “not achieved”.
Mr Orr:
The figures are subject to final validation, but you are right —
Ms J McCann:
It is a mistake.
Mr Orr:
It should have been described as “not achieved”.
The NICS sickness absence per employee in 2008-09 was 10·9 days; DFP’s sickness absence per employee for the same period, subject to final validation, was 10·7 days.
Ms J McCann:
It is still higher than the target of 10·2 days.
Mr Orr:
Yes.
Ms J McCann:
An analysis of sickness absence has been carried out, and the Committee heard evidence that a great deal of sickness absence in the Civil Service was among female staff. Why is sickness absence so high, and why is it higher in some groups than in others?
Mr Orr:
Sickness absence is being analysed in conjunction with the occupational health service in the central personnel group, but I am not qualified to pronounce on it. You asked about groups of staff that are subject to high sickness levels. The reasons for that are being analysed as well as the types of sickness and the duration of the sickness absence.
Mr O’Loan:
The more I hear and the more I read of this report, the more concerned I am. Target 4.7.2 is to agree an industrial staff pay award by August 2008. In the comment column of your briefing paper alongside that target, the first word used is “delayed” and the last phrase is “Completed March 2009.” That target’s status is described as “achieved”, but it has not been achieved.
Mr Orr:
It was not achieved by August 2008.
Mr O’Loan:
That was the target; it was not achieved.
The final observation in the comment column attached to the first PSA target — 1.1a — says:
“Wave 5 due to migrate later in 2009”.
That has not fully happened, yet it is described as achieved. It has not been achieved.
Mr Orr:
That is correct.
Mr O’Loan:
Earlier, I referred to HR Connect, the status of which is:
“Likely to be achieved but with some delay.”
That status ought to be reworded as “not achieved”.
The comments for PSA 20 1·1d state:
“Network services were being delivered through NetworkNI by 30 Sept.”
September 2009 has not happened. Therefore, unless the target was achieved several months early, the Department cannot claim that it has been achieved. However, the comment column continues:
“Further roll out is ahead of schedule.”
As September 2009 has not happened, the best that could be said is that the target is on track for achievement.
The Committee should send the report back. To say that 16 of the 23 PSA targets have been achieved and that five are on track presents the departmental performance in a very good light. However, it is not an accurate light.
The Chairperson:
I want to ask all Committee members for their opinions. I have exactly the same view as you; we should ask for a revised report that takes account of the points that have been made. David and Deborah are in the unenviable position of trying to explain the report or at least cope with our questions. Although we have yet to hear from some Committee members, I sense that the Committee would like the report to be revised so that it reflects our comments and questions.
Mr F McCann:
Target 4.·7.·3 refers to equal pay claims that were to be settled by March 2009; it also says that negotiations with the Treasury were completed. Will you provide an update on the latest position? What was the outcome of the negotiations with the Treasury? Is there a revised target date for an agreed settlement?
Mr Orr:
The equal pay claims are the subject of litigation; more than 4,500 cases have been lodged with industrial tribunals. As you know, we continue to negotiate with the Northern Ireland Public Service Alliance (NIPSA) to seek an amicable solution rather than go to tribunal. As part of those negotiations, we have undertaken a grading review of the technical grades, which were the comparator grades on which the equal pay claims were based. That review is ongoing and will take three months.
The Chairperson:
Is there a completion date?
Mr Orr:
The review will take three months and started at the beginning of this month, so the target date for completion is the end of August. That is an internal target.
The Minister negotiated access to £100 million of borrowing with the Treasury in late 2008. How much of that will be borrowed depends on the outcome of the case and how much compensation is payable. Until we know how much we need, I cannot say whether £100 million will be sufficient.
The Chairperson:
We were told explicitly by the Department that the £100 million has not been earmarked for the equal pay claims only; it is for that and other purposes. I am anxious to keep the record right on that.
Mr McNarry:
David Orr told us that the last time he gave evidence to the Committee.
Mr Orr:
Thank you for keeping me right. It is to address various cost pressures, including equal pay. Thank you for clarifying that.
Mr F McCann:
Is there a revised target?
Mr Orr:
It is very difficult to set a target for settling equal pay claims when that target is subject to litigation and to negotiation with the unions. It almost impossible to set a target, so there is not a revised target.
Mr F McCann:
I raised an issue related to the first question on the Floor of the Assembly and in the Committee. The issue has been going on forever, and some people should have had money paid back to them. Are the families of people who have passed away during the negotiations entitled to make a claim? I have asked that question before.
Mr Orr:
I shall come back to you on that, because I do not want to say something that may not right. I shall need to check.
Mr F McCann:
Target 7.1.1 is the Land and Property Services target to collect 98% of rates payable for 2008-09. The document states that rate collection has become more difficult because of the economic downturn. How can that failure be explained, aside from the economic downturn? Has the collection of arrears also been affected? Will that affect funding of reform programmes, which is linked to increased performance by rate collection by Land and Property Services?
Mr Orr:
Land and Property Services collected £940 million in 2008-09, an increase of £60 million on the previous year. However, only 92% of rates payable were collected, and the target was 98%. A reason that Land and Property Services gave for not achieving the target was that rate collection was more difficult as a result of the economic downturn. A balance must be struck in deciding on how to pursue rate collection. To achieve the target of 98%, domestic and commercial ratepayers sometimes need to be pursued through the courts. Land and Property Services has set up payment arrangements with people who are having difficulty with paying their rates, and some of those arrangements extend to 2009-10.
You are right that the target was not achieved. I do not work in Land and Property Services, but my feeling is that an increase of £60 million in a year of such economic difficulty shows that it is moving in the right direction. It has a firm target for 2009-2010 to achieve a collection of £985 million.
Mr F McCann:
Has the collection of arrears also been affected by the downturn?
Mr Orr:
The effort continues with the collection of arrears. I do not have figures before me about the collection of arrears, but there is a focus on them, and arrangements are in place to help people to repay when they get into arrears.
Mr F McCann:
Most councils were told recently that a miscalculation might have been made with the penny rate, leaving them in a debt for which they had not budgeted. Can you comment on that?
Mr Orr:
During the year, Land and Property Services provides councils with an estimate of the rates that will be brought in, called the penny product. At the end of the year, once all the negotiations have been completed, Land and Property Services provides an actual figure. As you know, during this year, some fairly large firms challenged their rating assessment.
Mr F McCann:
In the coming year, Belfast City Council — as a councillor, I must declare an interest — and other councils will again face substantial bills. Those councils have based their budgets on what you describe as estimations, so any additional costs will affect the programmes that they have put in place to benefit their ratepayers.
Mr Orr:
I am not yet aware of any estimates for 2009-2010, so I cannot answer that question at the moment. Do you want me to —
Mr F McCann:
We would appreciate it if you would get us that information.
Mr Orr:
Therefore your question is about the amount that Belfast City Council —
Mr F McCann:
I am talking about the amounts for all councils.
Departmental target 1.1.1 was to achieve at least 71% customer satisfaction rating in the 2008 DFP customer survey, but that was not achieved. What key areas for improvement have been identified?
Ms McNeilly:
The key areas for improving customer satisfaction involve several work strands, and further plans are being developed. For example, to achieve the customer satisfaction target, business areas have set up work groups to deal with customers to see what issues might be followed up through the action plan.
The 2009-2010 operational plan incorporates additional targets, and it outlines key actions for the Department to take. For instance, there will be an increased focus on the Department’s customer-service standards, and a work strand is under way to test how those customer-service standards, such as the timeliness of replying to correspondence and answering telephone queries, are being applied and delivered. That exercise is being monitored to determine what improvements the Department can make.
The Chairperson:
As with other issues, we would be interested to hear about any milestone targets that indicate whether problems are building up or being resolved. We are aware that that was a massive transition process for Land and Property Services and that changing management practices is a challenge. Nevertheless, everyone agreed the targets and signed up to them.
Mr Orr:
There are no interim customer-service targets, because customer service is measured in an annual survey. However, in-year measures are undertaken, and we can provide a report on those.
The Chairperson:
There are also factors of capacity and staff training in front-end contact that affect the annual survey results.
Mr Orr:
Correct.
Dr Farry:
I apologise for arriving late.
The Chairperson:
We are glad to see you substituting for DUP members —
Dr Farry:
I thought that I would sit on the DUP side of the table, which is a bit lopsided, rather than get a crooked neck looking in one direction all morning. Mind you, I hope that the DUP seats do not rub off on me.
Mr McNarry:
I will take a photograph of you. [Laughter.]
The Chairperson:
This has nothing to do with policing and justice.
Mr O’Loan:
I did wonder yesterday.
Dr Farry:
We have not changed a single policy. Picking up on Fra McCann’s point, the key issue that we hit on in June with respect to Land and Property Services is probably the finalisation figures for 2009-10. The penny-product estimates will come some time in the autumn.
What mechanisms are there to account for the missed targets in the report? Is getting a hard time at this Committee the end of it for you, or does more happen internally?
Mr Orr:
That is quite a significant accountability measure.
The targets are reviewed by the departmental board and the permanent secretary, who makes sure that the targets are included in the personal performance agreements of those responsible for them. Those are then reviewed as well.
Dr Farry:
Therefore individuals could be sanctioned if it were felt that targets were missed due to internal factors as opposed to the external environment.
Mr Orr:
The targets are included in personal performance agreements.
Dr Farry:
Will there also be an analysis of the longer-term trends in performance? Are judgements based on a snapshot of one year, or is the long term taken into account?
Mr Orr:
The results under discussion are based on a snapshot over one year, but we do look at long-term trends. For example, the NICS sickness-absence level was mentioned, and we know that that has reduced from 13·4 days four years ago to 10·9 days.
Dr Farry:
When can performance indicators be modified? We may conclude that a target is unrealistic, for some reason; that it is either too challenging or too generous. Equally, if a target is missed, there may be a tendency to lower the bar a little bit to make it easier. How does the Department work through such issues to ensure that the challenge is not diminished?
Mr Orr:
There is quarterly monitoring of performance against all targets, and that relates to the Chairperson’s point about interim milestones; trajectory against targets is monitored quarterly. If, in-year, we see that a target will not be met we discuss whether it should be changed in-year to make it more realistic. To date, we have taken the view that we should keep the target as it is and report the out-turn performance rather than lowering the target. We have tended to keep the higher target and give a report about why it was not met.
Dr Farry:
Is it ever decided that a target may be too easy to meet and should be revised upwards?
Mr Orr:
Some targets are achieved in advance, and where that is the case it is reported. We do not regard targets as the limit of achievement; we would like to surpass the targets, if at all possible and appropriate.
Dr Farry:
In relation to internal checks and balances and the review process, are revisions of the targets largely proposed by the person who is directly responsible for them or are they taken out of that person’s hands perhaps due to their inherent bias? Is there a wider sense of target setting in that the Department is separate from the person who is directly responsible for the target?
Mr Orr:
The person responsible for the target has a part to play, because, after all, it is they who know the business and know what is possible. The element of independence comes from the fact that the departmental board signs off the targets at the start of the year. There are two independent members on the departmental board, and the Minister also has to agree the target.
Dr Farry:
How does the traffic-light system for this year compare to performance in previous years? Is it better or worse? Other members have pointed to several significant red boxes.
Mr Orr:
The public-service agreement is new; this is its first year. Some corrections have to be made to the departmental targets, as was pointed out earlier. It is largely the same as in previous years. Perhaps Deborah can say more about that.
Ms McNeilly:
I do not have any statistics, but they could be generated.
Dr Farry:
That might be interesting with regard to the longer-term credits. I realise that this might be new and that we might have to return to it in future.
Target 1.1.4.3 states that Land and Property Services failed to achieve its targets:
“to ensure 98% of all residential properties are in the large-scale and Pointer databases by 31 March 2009”.
What were the main reasons for missing that target, and what are the implications?
Mr Orr:
That target was, as you say, to ensure that residential properties are on the Pointer database. Land and Property Services added 23,000 properties to the database during the year. It told me that, during the year, the number of properties coming onto the database increased by 3%. Therefore, it was, in a sense, a moving target.
That does not explain the full difference between the 98% target and what was achieved. However, there was an increase in the number of domestic properties that should have been on the database, and that was part of the explanation. Land and Property Services is, as you know, prioritising resources to support the rating process. Therefore, it is a business judgement as to where Land and Property Services allocates its resources, and it was felt that that target was not quite as important as the rating work.
The Chairperson:
One wonders what would have happened had there not been a slowdown in the construction industry and the building of new houses.
Mr Orr:
Indeed. Still, 23,000 newbuilds is a reasonable number.
The Chairperson:
Are those 23,000 newbuilds registered in that year or just new properties registered?
Ms McNeilly:
They are properties that have been added to the database.
The Chairperson:
They have been registered for the first time.
Mr McNarry:
They caught up with them.
Mr F McCann:
There were about 10,000 newbuilds a year in the private sector.
The Chairperson:
Last year?
Mr F McCann:
It has dropped off.
The Chairperson:
That is my point: the number of newbuilds has dropped off dramatically.
Dr Farry:
I have one final question. Target 3.1.1.2 refers to the departmental target:
“To realise benefits in 2008/09 in accordance with the reform programme benefits realisation plans: Account NI”
That target has the status “on track for achievement”. How can it be on-track when the target has been carried forward into 2009-2010?
Mr Orr:
They have realised the benefits that they were supposed to realise in 2008-09, but this is a continuing process and they have further targets for 2009-2010. That is the explanation.
The Department takes benefits realisation seriously. We have the reform delivery unit working with all the business areas in DFP to ensure that we are realising the benefits. More than that, the reform delivery unit is helping other Departments to learn the lessons of realising benefits, because those benefits have to be realised right across the NICS.
Mr O’Loan:
I share the concerns about Land and Property Services and the rate-collection issue, and I recognise the difficulties that people have at present in paying rates. Nonetheless, a very large sum of money is outstanding.
The Committee received a report last week on the performance management framework for the delivery of Programme for Government targets that showed the quality of information gathering across Departments in a very poor light. Seven themes were developed that were critical of Departments; five I regard as extremely serious, and two less so. I take it from the very generous report that DFP gives itself that those criticisms are applied to other Departments and are not regarded as being levelled at DFP.
Mr Orr:
The performance and efficiency delivery unit has been looking at the public-service agreement out-turns across all Departments, including DFP; the unit agreed, with one or two exceptions, with our commentaries.
I will give you an example of one of the things that it picked up on, which dealt the with the roll-out of phase 2 of NI Direct that is due to take place in 2009-2010 and which we had put in as on track for achieving. However, PEDU said that, given that the budget had not been secured, DFP could not be that confident. Such was the difference in the Department. There were comments about all Departments, including DFP.
Mr O’Loan:
I could make quite a number of comments, but perhaps I will make one or two. My first comment relates to the inconsistency in Departments’ assessment of red/amber/green status, and today we are challenging DFP very strongly on that issue. For DFP to make such comments about Departments generally and to present a report itself on that issue puts DFP unsatisfactorily under the spotlight. It reflects very poorly on DFP and on its competence to assess other Departments on that matter.
I do not think that there are any PSAs in the report for co-operation between Departments. Is that the case? Do none of its PSAs relate to departmental co-operation?
Ms McNeilly:
The PSA targets shown for DFP fall under three PSAs: PSA 21, PSA 20 and PSA 11. DFP is the lead Department for PSA 20. In the report, therefore, we reported on the targets in the PSAs for which DFP has the responsibility to deliver.
Mr O’Loan:
Is that exclusively or as lead?
Ms McNeilly:
It is exclusively as regards DFP. It is the lead Department for PSA 20, which includes targets for the Department of Education and other Departments, and PSA 20 will contain other targets it.
Mr O’Loan:
Did you report on those in the report that we have today?
Ms McNeilly:
They are not reported in this report, because that is not part of the Department’s remit. We have collated the data from the other Departments and reported it to the centre with regard to OFMDFM and the other Departments’ performance. However, we did not report DFP’s data, because we are not directly managing those targets; we are collecting and monitoring the data.
Mr O’Loan:
Did you say that you are the lead Department?
Ms McNeilly:
We are the lead with regard to monitoring.
Mr O’Loan:
OK. I am more interested in the cases for which DFP has responsibility for delivering.
Ms McNeilly:
They are in this report.
Mr Orr:
The cases that we are in the lead for delivery are all included in this report. We have to co-ordinate the monitoring of some other PSA targets.
The Chairperson:
Setting aside monitoring, are any activities reported for which the Department is directly responsible or for which it is the lead Department?
Mr Orr:
Yes: any activity for which we are responsible is in the report.
Mr O’Loan:
In interdepartmental cases in which DFP is the lead are you picking up any of the criticisms that we heard last week about the lack of co-operation between Departments? Since you have reported no such problems in the report, I take it that you found none.
Mr Orr:
DFP is the lead in citizen-facing services, such as NI Direct, and we have had excellent co-operation with other Departments. I am not aware of any lack of co-operation on cases where we are in the lead.
Mr O’Loan:
OK; I accept that; that is the answer.
The Chairperson:
Nevertheless, the lack of co-operation is only one aspect of the accountability mechanism; we also have to compare delivery. I am trying to examine Mr O’Loan’s line on the issue. Does your report reflect on delivery as well as on the required level of co-operation?
Mr Orr:
Yes, but only in the sense that we are co-ordinating the reporting. We co-ordinate and pass through the PSAs on which we take the lead and on which other Departments have an action.
The Chairperson:
Would the revised report indicate where milestone targets have been achieved or missed?
Mr Orr:
Do you mean targets that are missed by other Departments?
The Chairperson:
Yes.
Mr Orr:
No; that is reported to the Office of the First Minister and the deputy First Minister. This report covers only the targets that deal with —
The Chairperson:
You are a lead Department. The Committee is interested in those areas in which the Department of Finance and Personnel is the lead Department. If there are issues, even cross-cutting, interdepartmental ones, we would like to know if there are problems.
If there are problems in another Department, then, without interfering in another Committee’s area of responsibility, we would simply like to be able to say that the report has highlighted a problem, and we would correspond with the relevant Committee to draw that to its attention.
Mr O’Loan:
On a separate point, departmental target 4.7.3 to be achieved is on the equal pay claims. It reads:
“To agree an affordable settlement to the current Equal Pay claims”.
I realise that that is not your preserve, but the wording is open to criticism. To introduce affordability into the target at the outset was improper, as I have argued before. The law must decide what is a just settlement.
The Chairperson:
Indeed, that is a legal requirement.
Mr O’Loan:
Affordability is a separate issue.
Ms J McCann:
Targets 2.2.1 and 3.2.1 mention “no overspend and acceptable underspend”, and both targets are marked as being “on track for achievement”. Target 2.2.1 states that:
“Provisional outturn position for 2008/09 should be known by the end of June.”
Target 3.2.1 states that:
“Year-end work is ongoing and provisional outturn figures should be available by June 2009.”
When will those figures be available? Those are extremely important targets for all Departments to meet. Given that DFP has a particular responsibility for monitoring underspend, the targets specify the end of June. Will those figures be available next week?
Mr Orr:
They should be available either next week or the following week.
Ms J McCann:
You have marked that target as “on track for achievement”; will you decide whether it has been achieved or not?
Mr Orr:
Those will be published, yes.
Mr McNarry:
I am sorry to detain you. I hear that DFP is getting a new Minister and a new permanent secretary.
Mr Orr:
DFP’s permanent secretary is moving to the Department of the Environment at the end of July, and DOE’s permanent secretary, Stephen Peover, is coming to DFP.
Mr McNarry:
Would it not be a good idea, Chairman, if the Minister and the new permanent secretary got a copy of today’s Hansard report? It might give them an insight.
Mr Orr:
I can arrange for that.
The Chairperson:
Do they come as a package? They were both in DOE.
Mr McNarry:
You know what they say about a new brush.
Did you the witnesses, David Orr, director of the corporate services groups for DFP, and Deborah McNeilly, finance director of DFP compile the report? Is it your report?
Ms McNeilly:
It is based on the information and assessment of each of the responsible officers.
Mr McNarry:
How did you check its accuracy?
Ms McNeilly:
We followed up their submissions with telephone calls and challenged them on their assessments.
Mr McNarry:
Are you satisfied with the accuracy of the information in the report?
Ms McNeilly:
We are satisfied that the assessment reflects that of the responsible officers.
Mr Orr:
However, we will take on board the points that the Committee has made.
Mr McNarry:
Point 2.4.2 relates to the production of a core pack for financial reporting, which was not achieved — it could not possibly have been achieved.
The report states that the focus was:
“ diverted to ensuring rigorous reviews of in-year financial positions to release resources for re-allocation in-year and minimise underspend in all departments.”
Given the importance of financial reporting, particularly to MLAs and the Committee, will the Department still be taking the production of that core pack forward?
Mr Orr:
That is my understanding.
Ms McNeilly:
It is also my understanding.
Mr Orr:
I have just checked the business plan and the Department will indeed be taking that forward.
Mr McNarry:
Do we agree that financial reporting is essential in outlining Departments’ financial position?
Mr Orr:
Good financial reporting is absolutely essential.
Mr McNarry:
Are we likely to return with a core pack or some standardised system to help to find resources for reallocation?
Mr Orr:
A core pack has more to do with the methodology of financial reporting than with creating efficiencies; it is about technical accounting.
Mr McNarry:
Was the switch in the focus to the reviewing of in-year financial positions successful in minimising underspend in all Departments?
Mr Orr:
That is a key priority in DFP, as it is in any other Department.
Mr McNarry:
Will every failure to produce a core pack for financial reporting be put down to a decision to divert energies to ensure “rigorous reviews of in-year financial positions?”
Ms McNeilly:
It is still the intention for the pack to be produced.
Mr McNarry:
Can you express it more strongly than that? After today, you will understand that the Department’s intentions are not always worth much; it seems to be full of promises and good intentions. Can the Committee tie you down to specifics? Will you guarantee the Committee that a standard process for financial reporting will be introduced across the Executive? Equally important, will that process meet legal requirements?
Ms McNeilly:
The packs were intended for the use of departmental board members to stipulate the detail that DFP should expect to receive; they were intended to instil best practice across the Civil Service. Packs were intended to introduce standardisation to income and expenditure updates with their various variance analyses, for example.
The intention when each pack was developed, in consultation with Departments, was that each Department could refine it to meet its specific business needs, but that the core, fundamentals should still be there. Therefore, although various reports in various formats are being passed through Departments to their departmental boards, those reports could be in a format that was neither standardised nor met all best-practice requirements.
The pack was intended to give guidance on best practice to the Departments so that they could implement it.
Mr McNarry:
I do not want to make this personal, but it seems as if it is always you, David and Deborah, who come before the Committee; unfortunately, you always seem to be in the hot seat. I do not know whether somebody has put you there or if you walked into it. However, you are always open and frank with us. That is refreshing, because I do not always get such frankness from your colleagues.
I look at the report and read such lame excuses as:
“Key focus on financial reporting was diverted to ensuring rigorous reviews”.
However, I see no evidence of that. Such excuses cause a return of my anxieties about the difference between elected representation and the regime of civil servants. My mandate is greater. I do not think that that regime has come to terms with devolution; those worries are gnawing away at me. That is why we are anxious to tidy up the report so that we can see the true situation and that you do not tell the Committee that something is achieved when it is not.
I started off by thinking that 50% of your report was flawed, but it is more than that. As Declan O’Loan and the Chairperson said earlier, we need a rewrite of this report; it is not good enough.
The exercise has been useful. We are a scrutiny Committee, and we have established that people are not doing their work; if they were, we would not be in this position. I do not accept this report, but I do not know whether we are being asked to accept it. It is deplorable to discover in the report that the Minister will make a statement to the Assembly a few days hence but that we cannot have accurate information now.
I am sure that the Chairperson will thank you properly, but I thank you for your help.
The Chairperson:
I do want to thank David and Deborah. This has been a difficult session, but we are all in this together and our work is to iron out wrinkles in the system, or at least to be of some assistance in doing so. I will check to see what we can do. The Committee would like a revised document. I know that you will have taken note of our concerns, and the Committee Clerk will attempt to provide an aide-memoire to allow you to address precisely members’ questions.
I do not want to receive an out-of-date document after recess. Would it be possible, therefore, for you to endeavour to provide the Committee with an updated position by next week?
Mr Orr:
I will do my best, but I would like some flexibility on the dates. I am not sure that we will be able to get it to the Committee Clerk by lunchtime on Friday.
The Chairperson:
Receipt by 11.00 am on Monday will allow the Clerk to do his work.
I thank you both for your attendance. As Mr McNarry said, you respond to our questions frankly, and that is appreciated and of considerable assistance to the Committee.