Q1 Chair: Can I welcome you all to our Committee hearing this afternoon and say immediately that we're probably going to have to adjourn soon? We've all been told there is an imminent vote, so apologies for that because that distracts us and we lose the flow of things.
I've got to start by saying to you, we've now been meeting as a Committee for about six months and I think when I read this Report, and I know it's a view shared by Committee members, it's probably the most shocking Report I've read in terms of failure to provide value for money for the taxpayer; we have a whole range of concerns. I'm afraid it's not going to be a pleasant Committee meeting for you. I apologise for that because we do try and be constructive but I think the cost and delay and failure to provide value for money is pretty shocking. As I read the Report, the Department commissioned consultants back in 2000 to deal with the issue of the M25, and the contract was only let in 2009-nine years later. Which of the many delays, which are set out in the NAO Report, do you think were avoidable?
Graham Dalton: The Department started consultants on doing the ORBIT Study back in about 2000. That was quite a free-ranging study that looked at many aspects, not just about getting on and widening the motorway. That was just one of them.
Q2 Chair: Can I just ask you to please the answer the questions? There were a whole load of delays. The consultants was one-they took two years to report-but there were a whole load of delays. What I actually asked you was which of the delays were avoidable?
Graham Dalton: I'm not sure that I can put my finger on any of these specific delays and say they were avoidable. The final one was with the credit crisis and the longer term to raise finance, which was much longer than we expected.
Q3 Chair: That was probably the least avoidable.
Graham Dalton: That was a factor of the market.
Q4 Chair: You think the rest were all completely acceptable: nine years' delay from the start of looking at the M25 to letting a contract? You think, apart from the credit crunch, which I would have said is probably the one thing that was unavoidable-well, it was avoidable, because you could have signed the contract before the credit crunch-everything else was unavoidable?
Graham Dalton: Madam Chairman, with respect, it was not nine years' delay; it was nine years to get from the initial need to do something about congestion on the M25 to having a contract let.
Q5 Chair: Well what's so difficult about widening a road?
Graham Dalton: Once you've decided that's what you want to do and that that's value for money, you can get on and do it. There was time spent on getting the procurement together, and that was going through from about 2004, when the widening entered the programme for improvements-sorry, 2003.
Q6 Chair: To 2005. It took you two years to just put the ad in.
Graham Dalton: And determine the procurement route and how it would be bought.
Q7 Chair: Two years.
Graham Dalton: And one should remember there was a Comprehensive Spending Review in the middle of that time as well. October 2004 was when the funding-
Q8 Chair: Two years-two years to decide. You'd done a load of PFIs anyway. You are probably a Department more than any other, and an agency, used to doing PFIs. So two years, just to put the ad in the paper. And I can't see what's complicated about widening a road.
Graham Dalton: With respect, it's two years in which putting the ad in the paper was the easy bit. It's determining how it was to be procured and what the job was to be and the sequence that it would go.
Q9 Matthew Hancock: You said, determining how it was going to be procured. In paragraph 1.15 of the Report it says, "The Agency's preference was for a single private finance contract. It did not assess a single conventional contract." Were any other procurement options tested?
Graham Dalton: Yes; we looked at multiple conventional contracts.
Q10 Matthew Hancock: Which in particular?
Graham Dalton: It's about the scale of what one's putting out. The design construction market is established such that around £250 million is a size of contract to go for. A single conventional contract was not assessed because that was determined very early on to be something that was far too big for the market.