Sir Richard Heaton: No. I think I probably misspoke earlier. I really didn’t mean to say that the contracts were great contracts. They were too complicated, the PbR did not work, and so on. All I was saying was that the people whose job it is to contract—the commercial folk—can’t be held responsible for the decisions that generated PbR and so on. I didn’t mean to say the contracts were perfect. Of course they are not. We have spent an hour and a half explaining, I hope, frankly and candidly the extent to which these contracts did not deliver in the way that was expected of them. So I’m sorry if I misspoke, and I apologise to Sir Geoffrey as well.
Q99 Shabana Mahmood: That is a very helpful clarification, because the approach you take moving forward does matter; you are going to re-procure these contracts. In figure 15 on page 40 of the NAO Report, one of the first points raised is about the 15-month timescale that you have for the re-procurement going live. That is another very challenging procurement timetable. What is your assessment of whether that timetable can be met?
Sir Richard Heaton: There are some pretty tough dates in there. I’m going to slightly dry up at this stage, but only to this extent: I don’t want to describe our future state, because that will be for Ministers to describe. There was a very compelling recommendation, although I think we would have got there by ourselves, in the NAO Report, which said we should pause to reflect on what the correct model is for delivering these services. We can’t afford to pause, in time terms, for the reasons you have just mentioned, but we will certainly metaphorically pause, and you will not see from us a blind re-procurement along lines that you would recognise from this experience. It will be better and different.
Q100 Shabana Mahmood: I apologise,
Sir Richard: I have literally no idea what “metaphorically pause” means. Please could you tell us?
Chair: You have momentarily flummoxed the Public Accounts Committee.
Sir Richard Heaton: The recommendation was pause before you press ahead, and I am saying we don’t have time to pause, but we certainly won’t press ahead unthinkingly. That’s all I meant.
Shabana Mahmood: Well—let the record show my scepticism once again.
Chair: And laughter around the room.
Sir Richard Heaton: I’m sorry—
Q101 Shabana Mahmood: Well, here’s the problem, Sir Richard. You had a challenging timescale first time round. You have a challenging timescale again. Our fear is that we are just going to have déjà vu further down the track with the second attempt to procure the very same services that have failed utterly first time round. Is there anything you can say to us today about this timescale, and what you are doing with it, that will give us some confidence that we are not going to have the same dog’s dinner served to us in a few months’ time?
Sir Richard Heaton: As I think Ministers have said, you will see a model from us—I cannot give you any details, because decisions have not been made—that is better integrated and picks up lessons from this experience. It will not be a déjà vu experience
Michael Spurr: I would just add one thing that I hope might give some reassurance. This was a major, first-generation outsourcing. What we are going to is not that. We have tonnes of evidence and learning; the NAO Report summarises it all. We are not doing a completely new thing now. We are taking a set of arrangements and we will undoubtedly improve them through the revised arrangements. The timescale is very tight, and we are very clear that we need some contingency on that, but it is not quite the same as previously. The points that the NAO put together in the Report give us a clear framework of things that we mustn’t do, which makes it more straightforward.
Chair: Free consultancy from the NAO. Ms Mahmood?
Q102 Shabana Mahmood: Mr Spurr, I appreciate that the first time around it was a really big change that was being planned for—a transformation— but this time you are picking up the pieces of a pretty major public policy failure. In respect of not having déjà vu, one problem at the outset of the first run at this was the lack of piloting and testing, but no piloting or testing is planned for this second occasion either. How can I possibly have any confidence that you guys will get this right the second time around?
Sir Richard Heaton: We haven’t set out what we will do, so you do not know that we will not pilot parts of it.
Chair: Okay. You might pilot it.
Q103 Shabana Mahmood: So you might take that on board. I live in hope.
Sir Richard Heaton: There is not a single lesson in the Report that we will not take on board. This has not been a great experience for the delivery of public services. Shabana Mahmood: Sometimes, Sir Richard, it would be helpful if somebody could come and show us that a lesson has been learned, rather than showing us a plan to learn a lesson, but let’s not go down that track.
Q104 Chair: Just to be clear, you might pilot? This will matter for Mr Spurr’s successor.
Sir Richard Heaton: There will be a roll-out. I cannot tell you what we are going to roll-out; I would rather leave it to Ministers to explain that.
Q105 Chair: Okay, but the danger is that, if Ministers announce that too late, Mr Spurr’s successor, Dr Farrar, will have challenges implementing—
Sir Richard Heaton: As Michael says, we are aware of the hard deadline for the termination of contracts, and we are working on contingencies that would give us more time.
Chair: Okay. That is helpful to me.
Q106 Shabana Mahmood: Paragraph 3.15 on page 42 of the NAO Report says: “The Ministry believes there is strong interest in its future contracts, based on its early market engagement events.” Could you define what “strong interest” looks like?
Sir Richard Heaton: The sector remains engaged. I think that the changes we made to the contracts have encouraged them. They are encouraged by our saying, with political cover, that we want the future market to be mixed, with the private and voluntary sectors and the Government all playing a part. All the people we have been talking to, including some new players, are interested in continuing to deliver probation services on behalf of the public.
Q107 Shabana Mahmood: I am pleased that you said there are new players. How many new players are we potentially talking about?
Sir Richard Heaton: I don’t know.
Q108 Shabana Mahmood: In the early market engagement events, has there been a good level of new players, or have they mostly been the same faces that have delivered the current mess that we are working through?
Sir Richard Heaton: I don’t know the answer to that question. Do you, Michael?
Michael Spurr: There are other—I have not been involved in the market engagement events, but there are definitely people who do not now provide probation services who have expressed an interest. There will be other potential options. The key thing is that, while this has been so difficult, it has been difficult for the providers as well, who are making losses, as the NAO Report makes absolutely clear. The point to be made is that, despite that, there is a recognition that this was a first-generation set of contracts, and there are a range of people who still want to be involved in this and are still actually committed to our sector. That is true in both the private provision and in the third and voluntary sectors as well.
Q109 Shabana Mahmood: Mr Spurr, did you say that you have actually been to these early market engagement events?
Michael Spurr: No, I said I haven’t.
Q110 Shabana Mahmood: You haven’t. Have you been to them, Sir Richard?
Sir Richard Heaton: indicated dissent.
Q111 Shabana Mahmood: I recommend that you both go. Do you have any sense of how many of those potential new providers have experience in this sector?
Sir Richard Heaton: [Interruption.] I have just been told that more than 40 organisations attended the market engagement, plus those from the voluntary sector.
Chair: So the voluntary sector is on top?
Q112 Shabana Mahmood: On top, or included?
Sir Richard Heaton: Forty, plus those from the voluntary sector.
Q113 Shabana Mahmood: Okay. Does whoever is sitting behind you know how many of that 40 were new people with some experience in probation and how many were people already involved in delivering these services?
Sir Richard Heaton: I am almost certain that the next iteration will have to be a letter.
Chair: Perhaps if you are passed a note, we can pick it up when you get the information, or you can write to us.
Q114 Shabana Mahmood: That would be helpful. Just on your desire to move away—obviously—from the payment-by-results model to target cost contracts, I want to return to this idea of the commercial skillset within your team. Target cost contracts would obviously involve a real change in the way things are done. On page 43, the NAO set out all of the things that are needed in order to make those a success. What confidence can you give us today that if this is the route that you pursue, you have the skills to do this?
Sir Richard Heaton: It slightly depends on what model we go for. Again, there is no blueprint—I just want to stress that the NAO Report does not comment on a blueprint, because we do not have one yet. We have got access to a commercial team that is now part of a Government commercial function, which helps us more than it did before. It means that we can draw on a Government-wide organisation, not just our own commercial staff. We have got a large number of commercial staff in the Department and access to a wider Government resource. Clearly, the more complicated, difficult and innovative the contract—if that is the way we go—the more difficult it will be for us. One of the things that we will be looking for is simplification, because one of the things that has not quite been drawn out of the conversation is just the sheer complexity of the current contract, which is not something that I would like to repeat.
Q115 Shabana Mahmood: That is helpful. Can I go back to the discussion around the NPS and CRCs and the separation between the two, in the sense of which is involved at court. That is obviously NPS; CRCs are not involved in any part of that process. I appreciate that that is part of the legislative framework and the design of how this policy has been enacted. It seems to me a bit of a design dysfunction, because you are having to find lots of workarounds to try to correct for the fact that CRCs, or what would be their successor, are not involved in the court process. Would it not be easier simply to design out that dysfunctionality and have a change in the framework?
Michael Spurr: There was a specific parliamentary requirement to have advice to court given by public servants, so it is not straightforward to take that away. I know that was debated at the time with some significant involvement and concern. It is right in terms of, even if that is retained, how do you ensure that we get the provision that CRCs are delivered before the court, so that they understand it better? There is no reason why you cannot have CRC staff being at court to provide support. There is a cost implication for that if you are going to do it—that is what we have got to work through in the next generation. I do not think there is any suggestion that we will change the advice to court on sentencing—it should come from a public servant. There is an issue about how you get the right information before the court, so that they better understand what options are available for sentencing. That is definitely something in the new procurement that we need to take further.
Sir Richard Heaton: I would just pay tribute to the professionalism of the probation profession across the country, in the private and public sector. They care about outcomes and quality advice to court, and they have worked well. There is a really good example from Durham and Tees Valley of placing a dedicated member of staff in court to support the NPS, and there is something in the. That professionalism is really welcome and good to see. You are right to say that it mitigates a point of friction, so to some extent it is a workaround. Nevertheless, it is just a tribute to the professionalism of the people on the ground.
Q116 Chair: Is that just the two examples?
Sir Richard Heaton: Those are the two examples I have, but there may be others.
Q117 Chair: If it is good, one would ask why it is not happening everywhere. Do you know? Is it something that you could do everywhere, if that is working in those examples? Sir Richard Heaton: The mechanism for spreading out good practice is there. Sometimes good practice goes around the country quickly; sometimes it does not. We are certainly encouraging behaviour like that.
Q118 Chair: It is a bit vague, I must say.
Michael Spurr: We have a tool that the NPS are rolling out that will help sentencers to understand what is available in their areas from CRCs. That has been trialled in the north-west and is now being rolled out. We have sentencer buy-in from that, which will demonstrate to the senior presiding judge that there is a good deal of work that has been going on to try to improve that engagement with sentences.
Q119 Shabana Mahmood: Obviously, I would also wish to pay tribute to the professionalism of the staff who have to deliver these services. I have to say, though—for the people that are corporately responsible—it seems to me that this has been in operation now for some years. We have known about this point of friction on access to courts for CRCs. The best examples we have are basically common sense in action—a little bit of co-location of workers and the possibility of the forum. It should not have taken so many years to think that you should perhaps have a forum for all the different providers to be able to talk to one another, or that co-location should be piloted somewhere. Why has it taken so many years to learn something so basic?
Michael Spurr: Again, frankly, we gave opportunities to providers to do things differently. Naturally, I think co-location is a good idea—I would start with a view of co-location—but some providers wanted to move into rather better accommodation and enable their staff to work with greater flexibility, and they moved out from being co-located.
Shabana Mahmood: Mr Spurr—
Michael Spurr: Can I just finish? The reason that that was done was because, if you are giving people flexibility and saying, “It’s for you to determine how to run that,” you take away some of the things that you might choose to do that might improve that. So you have to go back and say, “This isn’t working so well. We want you to come back together.” It goes, I am afraid, back to the view that you were giving people flexibility, which was one of the things that was part of the policy.
Sir Richard Heaton: It did not help either that CRCs and the National Probation Service areas are not coterminous. That is something that we are determined to fix if we have another generation of this sort of model— to have a single regional person whose job it is to integrate CRCs and NPS performance across an entire region. Again, that was not part of the design. We had areas that were not coterminous with the national ones.
Q120 Shabana Mahmood: I will come back to that in a moment. Mr Spurr, I have to challenge you. This is not a point about innovation. This is, as you say, a friction that was designed into the process because of the requirements of Parliament. With respect, that is not about driving innovation; that is a systemic issue that is being brought in because of the legislative framework. Surely the common-sense workarounds were the responsibility of you and the Department, rather than leaving it to the innovation capabilities of CRCs themselves at a grassroots level.
Michael Spurr: The co-location was not part of any legislation. The legislation is about advice to court. Previously, probation colleagues would have been in the same offices. A number of CRCs, for understandable reasons, moved a lot of their staff to different locations—they wanted to do the work differently. Those were decisions they made in their bids and their business cases, which we could not prevent from happening because that was how they were going to deliver their business. That exacerbated some of the issues that you have just described. That has to work its way up. There are workarounds to try to make that work, and we have been addressing that, as I say.
Sentencer forums have always been there, and the NPS has been a part of them. The point was how much input was the CRC going to do in those partner forums, and they have done much less than we had anticipated, partly because it is not a requirement of their contracts and they are pressed in terms of how they are going to deploy their resources. That all comes back to the point about what we were anticipating getting in terms of innovation and additionality, and what we have actually had as a result of the way the contracts have worked in practice.
Q121 Shabana Mahmood: Paragraph 3.18 of the National Audit Office Report says: “The Ministry has also created a forum to enable magistrates, the NPS, CRCs, court staff, prosecutors and others to discuss challenges and opportunities for improving joint working.” How is the forum that you have now created different from all the other forums that exist, which are presumably also in existence to improve joint working?
Chair: The second half of paragraph 3.18 on page 42 in part three.
Michael Spurr: Thank you. I’m sorry.
Chair: Don’t worry—it takes a while.
Michael Spurr: How is it different? We have national forums and we have sentencer forums at a local level. We have simply been putting more NPS engagement into those forums and encouraging CRCs to be engaged. The senior presiding judge has actually met with all the CRC providers to reinforce her expectation of their involvement with us to improve sentencer confidence. We are effectively trying to improve the means by which we are engaging. That is what I think that paragraph is about.
Q122 Shabana Mahmood: When there has been some improvement in joint working and people have made some changes, either in the west midlands or elsewhere, as referenced earlier, what are you doing to make sure that it is adopted more widely across the system?
Michael Spurr: I go back to my previous answer. What we have done is made a very clear priority of improving sentencer confidence, which means engagement with CRCs at national level, which we have done, with the senior presiding judge taking a personal interest in this, and an expectation that there will be much closer involvement at local level. It is that very process that we are expecting will improve the confidence and the understanding at sentencer level.
Q123 Shabana Mahmood: But if you have best practice, or something that has emerged as best practice, in various parts of the country, why not mandate that it is taken up?
Michael Spurr: I cannot mandate providers in that way—
Q124 Shabana Mahmood: Or put some pressure on to ensure that common sense is shown and that this workaround actually works?
Michael Spurr: You can absolutely encourage people to do it, and the providers generally will want to do that, but I cannot mandate, because it is not in their contracts to deliver in that way.
Chair: Not in the current ones.
Michael Spurr: Not in the current ones. That is exactly the point.
To be continued....