International Development Fraud Committee Select Committees

We are joins by Seamus Morse and Michael Whitehouse. I will start. In

your memorandum, you say the savings for your value for money work

amounts to 1.2 alien pounds for 2015. This appears -- billion. Tax

credits, accelerating tax goes, defence in Fiji -- infantry. Does

that cause you concern about such a small number of sources? Yes. But

that is to with the fact that such large and easily quantifiable terms,

it is easy to show what savings you have delivered. In one way, fairly

mechanical. I have launched a new programme and in fact I was

privileged to be speaking to Wednesday morning colleagues this

morning demoting a new programme on value management -- promoting where

we said our main job is to help Parliament... You mean the meeting

of a permanent secretaries? -- opponent. We think it is desirable

to achieve savings. We would like to do that in a rather more formal

discussion. We have had positive responses from Government. I hope

that will, over a relatively short time, provide as macro with

something that is more wide-ranging in terms of. All this is agree, but

I am aiming to move into something where we have a wider value dialogue

in terms of specific reports we have done on the department. And also, in

offering to bring the knowledge and benefits we have developed across

Government in areas like transformation, we are taking quite

a different approach to trying to add value back. We have done that in

response to what we have as feedback from Government, we asked for it and

this is what they said. They feel we know a lot about what is going on in

Government, they would like to have more access to it if they could. It

is not going to add an extra cost associated. Do you have an updated

figure for 2016? Our current estimate is that we will save 734

million pounds that is subject to our own internal audit. That will be

done over the next month and then published. I was surprised when you

said that. Can you account for the difference? 1.2 billion and a 700

million? We have achieved savings of 82-1. We still exceed our target of

ten times the running costs. It is a factor of a number of factors. A lot

of the low hanging fruit has actually now gone within Government

departments. The change in our approach identified is the

recognition that if you are going to generate value, you need to be

focused on the much longer term value creation within Government

departments. Have you got a map in your mind, if you like, about which

areas of investigation yields are the most savings? Is there any

correlation? Traditionally, procurement, management of avoiding

fraud, malpractice, control of a transaction costs, running costs.

Infantry is another area that has always been an area we have been

able to identify financial savings. Largely transaction costs, with

those it is easier to focus on productivity. We don't actually set

up our study programme or work programme primarily on identifying

savings. But rather on things that we want to explore and is... As it

happens, I know we are planning to do more work on infantry. --

inventory. In terms of the MoD. Because it is a narrow base, we can

go from relative famine to feast quite quickly. That is important to

move to more holistic systems. Capability in Government, I'd like

to ask about was that you have often drawn attention to the problems with

the Government departments having the right capabilities. I am looking

now, the report called the assessment of capability review

programme which came out in 2009, February, eight years ago, it was a

year after that I think that the capabilities plan was launched. We

had evidence from the Chief Executive of the civil service a

couple of years ago, six or seven years after that, saying one of the

biggest problems in Whitehall is the lack of distributive capability.

What impact do you think your previous reports on Government

capability have actually had? We are publishing another report on that

next week. I think it has had a lot of impact. When we are going through

the process of developing visual pods, we find that Government reacts

and takes action on reports. That is good. I don't think there is much

difference between us and is... Recognising the need to

professionalise a number of areas. The areas he has recognised are in

digital and commercial skills, which you wouldn't find surprising in

project delivery and also in change management. I agree that those are

the main gaps. The question is, the rate of progress. The only point

where we really diverged from him, and we have done a law to support

him, is how much pressure and the pace of improvement. I think the

pace of improvement has to be pretty rapid considering the threats the

Government faces at the moment. Other than that, no difference. We

have played quite a big part in supporting. A certain amount of

ping-pong between him and us. Not surprisingly you should have this

agreement on what needs to be done. What you are looking at, talking

about the same problems. The separate issue is how the Government

manages to get traction with only departmental fiefdoms and... That is

a different thing. My question is about how much impact your support

is having is not either people at the centre saying good things, but

to what extent is it actually changing behaviour in Whitehall

departments and agencies? Two things to say. The departments have adopted

the idea of having a professional development structure. I think that

is positive. And I think we have contributed to making a difference

to that. The and so, there is something we have prayed a part in.

-- played. Secondly, we have particularly John a danger to this,

and again I am gratified to hear some of this and going back. Join

attention to the challenge presented by Brexit. We have said in addition

to the heavily loaded programme of existing legislation and reform in

Government that we have been looking at, there is going to be even more

challenges in negotiating Brexit, where are you getting these

resources from? Hold that thought. If one likes, on the general subject

of capability, and in the interest of full disclosure, as you say the

Chair of his committee and I met with Ben Gummer. He was very focused

on and said quite clearly that he wanted to do more to encourage civil

service learning to be properly embedded. Some years since the

National School for Government was abolished. One has a sense that

Whitehall has been giving its weight in terms of what comes next. What

contribution will the National War office make in terms of making the

centre and departments on getting better learning, presumably

including functional leadership? To hold to account and push for actual

progress rather than good intentions. The only concern I have

with a lot of these programmes is that they are, the decision was

previously very much, there was an area where the programme being run

out of the Cabinet office, and now there is more of a voluntary

approach. I have heard good things about that. But depending on how

urgent, is that really achieving results? I think both the PAC and

ourselves, we don't have an impact on our own. We will want to ask

those questions, just at what rate is progress being made? Otherwise,

you tend to get good intentions. And not fat in progress. I think it is

true that will make a difference. One area very central to the

committee 's work is the government government 's managing -- management

with various partners. There are so much more part of the furniture and

part of the landscape. What concerns do you have with regard to the weak

government managers are these? I think the problem can be just rotate

a dip government has what is happening. We have seen a few

examples of issues coming from queer work has been given to an

organisation and we have not delivered. There has been some major

break-up of a relationship. It is a considerable track record. What we

's having a team of auditors skilled at looking at commercial contracts

and arrangements. The International Association for contract management

will be central to that. We are building up our capability to locate

more forensically and more consistently into that. I should

have said at the beginning, it is rather hot in here, so England

wishing to take off the jacket is very welcome to do so. In the

memorandum, you said that Brexit is one of the key areas for the future.

What is most likely to add most value the rear the Brexit policies

depend? We need the clarification of the issues. The needs to be eerily

planning. There are at least two major scenarios. We need to have

plans for both. Some government plans are much more affected by

others -- than others. We would expect not just the effect on HMRC

but others. It is understanding that. Not just having departmental

plans, but looking back and looking at the challenges of the government

has, not just with regard to the departmental basis. It cannot be

good that some departments are not affected by Brexit have to carry out

the programme. Particularly, it could be shortages and timetable for

legislation, because the legislation surrounding Brexit is going to take

up such a large amount of time. All that needs to be put into a

prioritised discussion and the circumstances adapted to. The second

one, more specifically relating to rose, this is clearly going to be an

argument about the outstanding balances with regard to the United

Kingdom. It is something which will have to be validated and examined.

That is very helpful. I am surprised that there would be an argument,

because I thought there should be a pretty clear indication of what the

amount should be. But you are seeing that is not the case? I think it is

unlikely to turn out like that. In doing that, do you think you will be

dealing with the European Court of auditors? Or would you be dealing

with the Germans or the Dutch? I am not sure. There are some very big

numbers being thrown around. I am sure there will be quite a lot of

exchange for information at the Treasury level. What I'm seeing is,

I anticipate that been a challenge. There would be substantial

requirements. What are your biggest theories about the impact of Brexit?

Particularly, the impact on departments, postal functioning as

auditors for what lies ahead of us? What other me nearly as of concern

for you. Secondly, this focus, would you expect the budget functions, for

you to fulfil both rules, to carry out their work and to look at the

worst scenario of Brexit, what impact of the budget and resources

would you require? I simply do not know the answer to that. It is

impossible to answer at the moment. There's a reason for them. If the

government decides a process of rationalising the existing Pilgrim

and the amount of senior management team and resources go hand-in-hand

with that, I imagine that what they would want to do is some overall way

in which this could be directed specifically, with regard to the

departments and the changes. That would be an outline plan. That will

affect the amount of other work being done. And it will the amount

of work we would have to do. If it turns out we need more resources, we

will go back to HMRC and ask for it. We're not seeing we will need it

yet. Whether it is a soft Oriana Brexit, that is part of it, but

there are so many other things. The speed of it. The image it imperfect

the BBC plan is a very big plan. But we're not looking at any great

storm. We need to look at what additional work needs to be done. It

is significant growth. But at the moment, I am imagining that it would

be manageable. Over the last few years, the fate of Sabre attack and

online fraud. What are you doing to develop your own expertise within

the National Audit Office Pope with a means say it be? To jump about

quickly, what we are doing in this proposal is proposing to invest a

lot of money and securing digital capability. We want to make sure we

have the latest digital prep. But a slightly different from online fraud

prevention. Clearly, we have the capacity to look at this. If you set

aside very big events such as Brexit, who is the fate of more and

more online activity and online crime. We regard this as a big

threat and we are already building up our online capability. We have

appointed someone to lead on digital. We have set up that with a

specialist team just to address these issues. The department has

been looking up what they will be spending on cyber security strategy.

That is true. It is falling on their work, but the quality depends on how

much you want to spend than making sure that what you are doing works

technically. I can do an audit of whether it is real control the real

plan, but to understand whether the technology solutions are correct for

government, that is more challenging for me. Information technology

solutions have kept many people in a job. Looking at the different area,

looking at the local services. How are you managing the effectiveness

of the work you're doing? As far as doing local government, we do a

number of reports. The used to be called national studies by the audit

commission. We evaluate the impact of them, but we also have the focus

group that we consulted a regular basis from various bodies to get the

reaction to what we are doing, get focus reaction and comment on the

areas we're looking at, so in some cases, some of the studies we do

that have been taken at this committee. He remember all the work

we did on children in care. We get a lot of feedback from local

government about that. That probably strikes more to local government

than any other particular group. You see feedback, but there is the in

more formal way of measuring the effectiveness? There are, but there

comes under the heading of measuring value. We we are running out of

steam. The next hearing is due to start. The question about Brexit. I

am a little concerned that we are starting this process of a couple of

weeks' time, that we are not more concealed about the workload on the

system departments who we are going to be looking at that in this

financial year. Given the huge impact this could have. I think the

government has been quite clear about what sort of deal that is

going for, so things like the medicines agency. Can a place you a

little bit to be more open about how the departments are going to be cope

with the work we are committed with her you will cope with that. First

of all, will we have finalised plans on how they are going to deal with

that when they do not know whether it is going to be a hard or soft

Brexit? What we are constantly trying to do is evaluating within

the departments. It is not too difficult to work out. We realise

that. We will do that type of work. But it does require completed

planning that there is something in place, rather than just seeing,

look, we have evaluated on this part of business. It may be worth doing

if they do not work on these problems quickly. I am totally with

you on staff and please do not think that because I am giving you a

couple of short answer is that we are not thinking of it. The

government will publish their strategy and there has been some

pressure on the resilience of key public services resisting it. Also,

procurement being more transparent. Is that something you have a

discussion with do you believe you are sufficiently resourced to make

sure our procurement and public services are not weighted by any

problems? I am not in a position to really give an answer to that. I can

look at the overall view of how this is going. We have planned for this

before. More likely, they will look at specific areas we're there could

be problems. Ely is revered as a major procurement going on. Looking

at the combined effect. We may be getting information that there is

maybe something possibly going wrong. We will look specifically at

that. In many of these areas, we are actually looking no. We're looking

in terms of transport. Thank you very much, that is a good spot at

which to finish. Whether, can I say thank you very much for attending.

Variable rate is submission letting them know what we thought of the

evidence. Subtitles will resume on The Week

in Parliament at 23:00.