Q181 Ian Swales: On consultants, I am sure that there is a mine of information here. We could ask lots and lots of detailed questions, and I'm sure I can think of people around the table who enjoy doing that. Just as a kind of sampling, on the supplementary information that you've sent, you say that the Denton Wilde Sapte people, who I understand are lawyers, apparently spent four years advising on pensions and TUPE advice. Who are we talking about? Why would they be giving us all that advice?
Graham Dalton: For example, as part of this contract, there were something like 100 staff previously employed by a concession that ran and operated the Dartford crossing-the bridge and tunnels-who were TUPE'ed into the Highways Agency, and are now part of our traffic officer service. We have integrated that with our overall traffic management. Other staff were TUPE'ed from the previous maintenance contractors into Connect Plus.
Ian Swales: That is 100 people.
Graham Dalton: Many more were TUPE'ed the other way.
Q182 Ian Swales: We started paying for advice about that in 2005, and we were still paying for advice about it in 2008. There is a very complicated project going on in my constituency at the moment, where the TUPE advice would probably be six weeks, or three months at the most. That is for a very complicated deal involving 10 times as many people as that. Why would we have paid for that advice for so long? What was so difficult about it?
Ginny Clarke: In the early years it is about helping us put the proposals together in the tender. In the subsequent years, it was looking at the proposals coming back. The activity flows through the actual transfer of the staff when the actual TUPE action happens, if there is any uncertainty around that. That is why you have them at three distinct stages.
Q183 Chair: Can I get something clear? Are these figures just the money spent on lawyers for the M25?
Ginny Clarke: This is in relation purely to the M25 PFI contract, yes.
Chair: £15 million, totting it up, on Denton Wilde?
Q184 Stephen Barclay: It was £13.8 million over six years. The first year was just £405,000, but even if you average it out, it is £2.3 million a year. As a solicitor who worked in a law firm at one stage, I was just trying to work out how many full-time lawyers you actually had on this piece of work, because £2.3 million a year pays for quite a lot of associates. Do you have an idea?
Graham Dalton: The hourly rates are in there at the moment. I don't have a calculator with me.
Ginny Clarke: We certainly have records.
Graham Dalton: There would be some other costs in there as well.
Q185 Stephen Barclay: It would be interesting to dwell on it. I would just like to leave legal advice to come back to appendix 1, which we discussed earlier. The bit that I was struggling to understand was that in June 2007, legal advisers-I assume that that was Denton Wilde Sapte-stated that allowing the active traffic management variance could be challenged in the courts. That is seven years after the agency considered the M25 for the ATM trial. Obviously, Denton Wilde Sapte-if it gave the advice-was commissioned in 2004. Regardless of that advice, the pilot continued. In July 2008, the 12-month report on the ATM trial was published. In January 2009 ATM was rolled out nationally. I am just trying to understand why it took so long for that bit of advice to be given.
Graham Dalton: Going back to the original OJEU notice, or the publication notice for this contract, the best advice in June 2007-this is on whether we should stop that procurement or whether we could change that procurement-was specifically that if we changed with the preferred bidder, Connect Plus, to use active traffic management, notwithstanding the benefits or whether it was viable or anything else, we could be challenged not just by unsuccessful bidders but by those who either dropped by the wayside in the early phase or who did not even register an interest to bid for the contract originally.
Stephen Barclay: With respect, you are missing my point. My point is that you have had lawyers on it from the start. You then go down the track-
Q186 Mr Bacon: That is the point. In May 2007, one of the M25 bidders asked whether it could submit an active traffic management variant bid. That is not an unreasonable thing to ask given that seven years previously, in August 2000, active traffic management was announced. The agency considered the M25 for the ATM trial, but rejected it in favour of the M42. A year later, in July 2001, the Department announced the M42 ATM trial. So ATM was already a possibility in the mix. Seven years later, somebody asks if they can include active traffic management in their bid, you seek advice on it and are told that if you allow it, you could be legally challenged. Why had you so structured things that you were in a position in which you might get legally challenged on something that you had said seven years earlier that you wanted to take a look at? That is what I don't understand.
Ginny Clarke: But the legal advice wasn't because it was hard shoulder per se; it was about a variant, which effectively is what they were asking us about, and whether that variant-as it happened it was hard shoulder running-would prejudice the position in terms of continuing the procurement. That was what the legal advice was about.
Q187 Mr Bacon: In that case, why not have a procurement process that is flexible enough that it would not have prejudiced it? That is the point.
Ginny Clarke: The advice was that it goes back to that original decision about the OJEU We recognize that and accept that is where the decision tracks back to and the legal advice made that point.
Chair: What I am interested in is who gave you the advice to make such a silly invitation to tender? If your lawyers told you that at the time, you should have sacked them.
Ginny Clarke: Let me be clear, the lawyers did not give us advice at producing the OJEU. That was not about hard shoulder management.
Chair: Who gave you the advice then?
Ginny Clarke: As I said, it was our decision about what went in the OJEU in respect of what we were being asked to do, which was to widen the M25.
Q188 Mr Bacon: You said that it was Halcrow that gave you the advice.
Ginny Clarke: I said that they were our procurement advisers. I said quite clearly that the decision-
Q189 Mr Bacon: The Chairman's question was, "Who gave you the advice?". You answered by saying, "The decision was". The answer to the question, "Who gave you the advice?" is your advisers, Halcrow.
Ginny Clarke: In terms of procurement, yes. In terms of legal advice, it was Denton Wilde Sapte.
Q190 Mr Bacon: And you paid them several million pounds as well-£2.3 million in one year, and £1.5 million in the next, £600,000 and technically, excluding design, £1.6 million. You paid them a lot of money as well and yet you end up in this idiotic position.
Ginny Clarke: This contract was four times the size of any previous PFI that we had done in terms of cost. We need to recognise that.