Q21 Mr Bacon: If I could ask you to turn to page 23. You said earlier that you had consulted with potential users of the service. On page 23, paragraph 3.12
, it says, "Input was high level and representatives were not best placed to inform the development of operational processes, such as how Registered Bodies would submit applications." I think that is one of the most exquisite sentences I have seen from the NAO for quite a while. You have just said that you consulted with potential users. What this is saying is you did not, you consulted with people who were above the potential users but not the users themselves. Is that right?
Mr Herdan: We did both. This refers to the customer forum which was put in place in 1999 and there were trade associations and high level bodies there, but we also committed to the research with Rosslyn in May 2000 which was reported and which was a consultation. There were six focus groups organised with potential customers as well as a raft of in-depth telephone interviews to find out how they would behave. We did do some of that, but I do admit that we should have done more. We found out a bit later on when we had this large scale consultation that we had got problems which we had not picked up on earlier both through the customer forum and through the Rosslyn research.
Chairman: Thank you. We have to break down now for a division. I apologise, gentlemen.
The Committee suspended from 4.51pm to 4.56pm for a division in the House.
Chairman: Right. Mr Richard Bacon.
Q22 Mr Bacon: I would like to ask Aileen Murphie about paragraph 3.13
. It says, "Stakeholders we consulted said that they had questioned some of the Agency's assumptions, but felt they were ignored." Who was it that you were consulting in this way who said later that they felt they were ignored?
Ms Murphie: We consulted with a number of different voluntary bodies and other organisations like the Local Government Association. I can give you the names of specific ones that have said these comments, but in general these are a summary of the points that they raised with us.
Q23 Mr Bacon: Mr Herdan, you went and asked these people, so you did do some consulting but then you ignored what they told you.
Mr Herdan: It is not fair to say that in generality stakeholders were ignored. There were some who felt we had not listened to them. We met about 5,000 during these registered body seminars which were seen as the exemplar of how the Government was listening and consulting with them. We took a number of actions as a result of those seminars, including producing the blank application forms in volume but also other actions to do with portability, for example, and action to do with opening up a service with an international dimension.
Q24 Mr Bacon: Nonetheless, these points in paragraph 3.5 on page 22 about the application channels and the proposed use of call centres when customer preferences were to be for paper and so on were flagged up but basically ignored. It says in the first bullet on page 20 that Capita was cheaper. Could you say what the original amount of money proposed by Capita was and the original amount proposed by PricewaterhouseCoopers and thus how much cheaper was the Capita bid than the other one?
Mr Lewis: The original Capita price based on demand for three million applications over a 10-year period was just under £250 million.
Q25 Mr Bacon: How much was the PricewaterhouseCoopers one?
Mr Lewis: The other bids were more than £100 million more expensive over 10 years.
Q26 Mr Bacon: How much was the PricewaterhouseCoopers one?
Mr Lewis: The exact figure was in the region of £380 million.
Q27 Mr Bacon: So £130 million more?
Mr Lewis: Yes.
Q28 Mr Bacon: The fact that they were so at variance, it says in the Report, led you to attribute concerns about the Capita
bid on which assurances were sought. You sought those assurances by asking another consulting group to do an analysis, did you not?
Mr Lewis: Yes, that is right.
Q29 Mr Bacon: PA Consulting. This is in paragraph 3.6. On the basis of their advice, among other things, and on the basis that there was little difference between the technical evaluation the Agency rewarded the contract to Capita. How much were PA Consulting paid for giving you this duV advice?
Mr Lewis: I have not got that figure
Mr Herdan: I think I would need to write to you with that information. They were providing a variety of support services to us in terms of independent assurance.
Q30 Mr Bacon: How much were they paid in total? Do you have any idea?
Mr Herdan: I would rather write to you, if I may. It was normal consulting rates.1
______________________________________________________________________________________________________
1 Ev 23