Q171 Mr Jenkins: I want to go back to the 160 estate staff and the skill base they have within them. I know they must be doing jobs and contracts and evaluating what work is going to be put to Mapeley, et cetera. I would like to develop that and see what they actually do and how you see their future. Also I do not believe it when Mr Varney said, "We are not experts in estate management we should get out of it and do our own work," because you do have to have a pool of skilled labour there in the real word to evaluate contracts. On your contract compliance officers; who is responsible for the health and safety aspects of the staff insofar as do you have a proactive process on this and there is the perception (not true in any way, shape or form) that if there is a worn carpet or a problem in the area that Mapeley is not going to want to come along and lay a new carpet, they want to cut costs to make more profit on their estate. So how do you get this balance between heath and safety in the workplace? Who is responsible for it, who is going to force it through? As an individual worker is it clearly laid out who I go to, who I see, who is responsible for it and what action is being taken, because I think we need to answer the question in that area?
Ms McHale: Can I start off with a head count of the estates team. It is 152 at the moment -
Q172 Mr Jenkins: The Report says 160. We go on this Report; it is our Bible.
Ms McHale: The Report says 160. We are taking advantage now with a static head count as it stands at the moment of 152, as I have just said. We are experiencing further benefits as the contract beds in and we are beginning to deal with things which are currently deemed not to be functioning well in the contract, we are improving the change mechanism and working towards PMS. We are developing these processes with Mapeley at the moment but that is more labour intensive than it will be once the contract is fully bedded down. We expect that we will have a team of specialists managing the contract which is correctly targeted but delivering that in a more efficient fashion and working with our provider to do that. On the health and safety question, if I may, we are working with Mapeley again to look at the incidence of health and safety reports and review this across the organisations. We have had a degree of union inspection notices. We are also raising issues ourselves across the contract and Mapeley, as they look in their own audit process, are picking up issues. At the moment we are working on a comprehensive strategy compliance audit across the contract to review health and safety arrangements.
Q173 Mr Jenkins: Is there a clearly laid out channel that an individual knows who to go to to get it sorted out?
Ms McHale: Yes, there are business contacts for health and safety, there are contract management contacts, and there is the Mapeley help desk for raising these issues, so there are several channels available to employees. I also have regular meetings with employee representatives to test that.
Q174 Chairman: Thank you. Before we move into private session one or two questions from me. Paragraph 1.12 on page 13 deals with the fact that we have alluded to, that you can vacate up to 60% of the estate over the next 20 years. Quite apart from the fact that you cannot predict what your needs will be in 20 years' time, you have paid for it up-front anyway, have you not, so what is this flexibility worth in reality?
Mr Varney: We have exercised some of the flexibility already. We have released about 70,000 square metres of space already although our total requirement has gone up, and we expect that as we put Inland Revenue and Customs and Excise together, should that find favour with the House, then we will be looking to rationalise the estate.
Q175 Chairman: What I was asking about is the way the original contract was drawn up. Why did you not just pay the costs of vacating the property as they arise? Would that not be easier?
Mr Varney: If we were faced with the situation we are faced with today, which is a flat cash settlement, releasing property would cost us money which we would have to pay. Mapeley will take some of that property back. They will be able to review whether they can do something else with it, which we could not do, so we have a flexibility against the drivers of where the Revenue and Customs are going to go which will turn out to be very valuable.
Q176 Chairman: That is a fair answer. Mr Hopkins, what incentives do you have to minimise your finance costs when they are simply passed on?
Mr Hopkins: Minimise our finance costs?
Q177 Chairman: Yes to your banks.
Mr Hopkins: To our banks when they are passed on?
Q178 Chairman: Yes, to the Revenue.
Mr Hopkins: I am not sure I understand the question, sorry.
Q179 Chairman: Well, it is in the contract, is it not, that your re-financing with the banks will be passed on?
Mr Hopkins: Refinancing? Sorry, the question?
Q180 Chairman: What incentive do you have to reduce those costs when those costs are passed on effectively to the Revenue?
Mr Varney: Can I help? When we entered the bidding, clearly the bidding put pressure on the providers to go and get the best financial terms. Unless there was a conspiracy among the banks - and you will see in the Report there were a variety of financiers -it was a bidding process which should have put pressure on Mapeley and the various others to get the most suitable terms that they could from their bankers.
Chairman: Alright.