Q111 Chair: I want to ask some final questions. Who is the independent Government nominee on your board?
David Pitchford: Bernie Ainsworth.
Q112 Chair: Who is Bernie Ainsworth?
David Pitchford: He is a man whom we have just appointed to do this role. He is a construction manager by trade, but he is currently the man who has just finished topping out the Shard. Before that, he did a whole range of other things.
Q113 Chair: He is the chairman of that company, is he?
David Pitchford: There is a word for his role which I will have to search for, but he is something like the supervising adviser of the construction of the Shard. Before that, among other things, he was the chief operating officer of the Commonwealth games in Manchester, and before that he had a long construction-oriented programme. He was a member of the major projects leadership academy board, and was a great help in setting it up so that it became oriented towards leadership, not just project management. He will be an independent and strong voice.
Q114 Chair: May I ask about some other things that are, I accept, in progress? I was surprised to read that you don't measure outcomes. Paragraph 2.10 on page 23 says, "The Government Major Project Portfolio does not record outcomes." Is the report correct in saying that?
David Pitchford: I'm going to need clarification on what that means.
Keith Davis: The point we were making was about getting a good understanding of the impact that your assurance activity has. We know that you have action underway to address that, but at the point we looked at this we felt it was a weakness that you couldn't get any metrics on the impact it was having.
Meg Hillier: May I highlight one example? Under real-time information, small businesses in my constituency have raised concerns that they account for, I think, more than 90% of pay-as-you-earn, so it is important that real-time information works easily for them. That is an outcome that matters to my constituents, or to my local businesses. But when you are looking big project management, you are looking at the IT nitty-gritty. That might work well, but it might also be a nightmare for the person on the ground. That would be one example.
David Pitchford: Thank you for the explanation; I now understand. One of the problems that we have is being able to measure the impact. In the nicest possible way, may I say that I believe that the NAO itself has this problem. We are looking hard at how we might be able to construct what we call a performance framework, against which we might be able to measure some of the impacts that we are having. Currently, there is no such model anywhere in the world-we have searched high and low-so we will try to build it ourselves. It will be between us and the Treasury as to how we measure this.
We have talked informally with the NAO about how to do this, and we have seconded a bright young thing, a wonderful young man called Dan Jenkins, who was very angry with me about the Australian rugby team beating the Welsh rugby team over the weekend. He is on for a year to try to perfect this and to get us to a point where we can measure it and put it into an accepted pounds quantum. If we can do that, it will enable us to measure our impact, relative to your question, Mr Wharton, about, "You only spent £6 million on this, but there is £400 billion in the portfolio." If we can show some impact, we might be able to measure just how much savings and generation we can get. We are not there yet; it is very difficult, because not everyone who plays in this measurement space is accepting of the need and the fact that we can do it.
Q115 Chair: The other thing that the Report says, on page 11, is that at the moment there is no method to monitor compliance, which is a bit worrying.
David Pitchford: Compliance by Departments?
Chair: Yes.
David Pitchford: That is an issue, as I mentioned. It is all wound up in the integrated assurance and approvals plan. That is one of the things that we are going to look at-how we can get them to comply with that from a management tool perspective. We have some activity at ministerial level that we hope to see in the next year. They are not non-compliant, but the compliance levels by some Departments are patchy.
Q116 Chair: When you look at HS2, which I assume the Treasury approved-
Sharon White: Yes, we did.
Chair: Did they use the hard evidence to ensure assurance recommendations or not? When we looked at this, we felt that they had not used the appropriate hard evidence in taking that decision. There may have been other reasons for taking it, but it certainly did not look to us to be based on hard evidence, which is what you require.
Mr Bacon: We were looking at HS1.
Chair: Yes, but we were looking at the implications of that for HS2.
David Pitchford: That is a function of where the project is at. There is only so much evidence-based material available in relation to it now, because of what needs to be done in order to get the project to a full-blown definition and therefore the assessment stage. That is why we have put a whole lot of new assessment activity into it.
Since you had your hearing about High Speed 1, and related it to High Speed 2, you may be interested to know that we have an integrated assurance and oversight group, which will include the MPA, the Treasury, the Department, the HS2 organisation itself, the NAO as an observer and IUK, together with the engineering consulting partner. So we are starting to look at the overall piece here again, so that there is another element to this. With the hybrid Bill demanding complete definition of the design elements, and all elements involved in the planning approval stage for the project, which is going to be massive, there is just not sufficient evidence to be able to nail it at this point.
Q117 Chair: Finally, there is a suggestion in the Report that your scope is currently limited. There are ways of looking at it. You can look at the big numbers-the £360 billion or whatever. Cut that down to an annual bit of the budget and it is tiny: 2% of annually managed expenditure. Something like £14 billion is a tiny amount in terms of how you cut it. So, at the moment, it looks as though your scope is very limited, probably because you are so small. The Report suggests that you do not look at "business as usual" projects and that you do not look at projects such as new schools being built by local authorities or-I assume-hospitals built by health trusts and those sorts of things. That is a question for both of you. Obviously, if it is only 2% of annually managed expenditure-AME-it is not having the impact annually that one would like. Although one accepts that the projects as a whole are worth a lot, should we not be looking at broadening that?
David Pitchford: If I may respond, just to clarify absolutely, you are asking the question, Madam Chair, why are we not in the broader public sector? The reality is that, in being set up, the mandate was oriented towards centrally funded and delivered major projects.
Q118 Chair: And you are looking at projects as usual, the things that go on. So you are looking at new initiatives, rather than existing ones, and at central Government, not local government.
David Pitchford: New but not yet business as usual. That is our focus. Business as usual is for the Departments and Treasury to oversee and manage. We look at new initiatives.
Q119 Chair: Local government, hospitals, schools?
David Pitchford: No, it's outside our brief, specifically, for the life of this Parliament.
Sharon White: I think it also plays straight into the discussion we have had about resourcing and capability.
Q120 Chair: It does a little bit. I will just leave you with this thought, and then Richard will ask the final question. We looked at HMRC. I know it is all in the news now-it is one of these things. Every pound you spend gets you £10 in. There must be a more sensitive and sophisticated assessment of how to get your cuts or how to reduce expenditure sometimes by investing, but the Treasury seems hugely reluctant to go down that avenue.
Sharon White: My own view, and the thing that I say to my spending teams, is that the arithmetic for the spending review is of an appreciably different scale from the current spending review, and we are open to all offers of where small amounts of money can have an enormously bigger impact.