Mrs Ghosh: No, it is not.

Q66 Mr. Khan: When you read the findings of this report and all the failings, are you, as the permanent secretary, embarrassed by what it tells you?

Mrs Ghosh: I am concerned about what it tells me because it tells me that there is quite a steep hill to be climbed in terms of getting the capability of the organisation to where it should be, and I am very concerned for the reasons that the Chairman so eloquently described at the beginning about the impact of our failure on customers. Margaret Beckett, David Miliband and Jeff Rooker have made clear their regret about that.

Q67 Mr. Khan: Are you embarrassed by your predecessors-not just the permanent secretary, but other people in positions of power-who have allowed this to happen?

Mrs Ghosh: What I am always keen to do is to learn the lessons of events. That is what we are learning.

Q68 Mr. Khan: Was the Rural Payments Agency unfit for purpose between May 2004 and March 2006?

Mrs Ghosh: Subsequent events suggest that it was.

Mr. Khan: Unfit for purpose?

Mrs Ghosh: Unfit for purpose.

Q69 Mr. Khan: The report highlights a number of failings. Are any of the failings in the report new to you, bearing in mind your relative newness to the Department?

Mrs Ghosh: No.

Q70 Mr. Khan: Presumably when you took over you realised that there were problems and you will have read the gateway reviews.

Mrs Ghosh: Yes.

Mr. Khan: Are there any things in this that you are not aware of ?

Mrs Ghosh: The NAO report? Did they come to me as a surprise? No, they did not.

Q71 Mr. Khan: So nothing in this report is fresh to you?

Mrs Ghosh: In the sense that naturally a large proportion of my time since my arrival at the Department has been spent either handling this issue or considering it and, for example, working on and giving evidence to our departmental Select Committee on the subject.

Mr. Khan: So nothing is new to you in this report?

Mrs Ghosh: The main recommendations in this report did not surprise me.

Q72 Mr. Khan: If you go to appendix 6, figure 11 on page 44, there are four red lights: May '04, January '05, June '05 and May '06. Leaving aside May '06 and the fact that there were some positives in the comments by the Office of Government Commerce, and bearing in mind what we know­­-the Chairman has talked about some of the personal tragedies as a consequence of the failings-do you think that our gateway review system is effective?

Mrs Ghosh: I know that the Committee has obviously made recommendations about the gateway reviews, which I believe the OGC will be happy to accept. I think that my interest-and that of my predecessor, Brian Bender-is to ensure that we can use the gateway process more broadly to identify the issue of broader change capability.

Q73 Mr. Khan: Until it is made more broad, is it ineffective?

Mrs Ghosh: It is highly effective in the terms within which it is currently asked to perform.

Q74 Mr. Khan: Would you accept that there are failings in the current review system?

Mrs Ghosh: You make recommendations to that effect and I think I would say, as I have said to OGC colleagues, that for me as an accounting officer it would be very helpful if the gateway process could also assist us with judging the underlying capability of an organisation.

Q75 Mr. Khan: In answer to a colleague who asked whether anyone had been sacked or suspended as a consequence of the present shambolic state of affairs, you said nobody, save for the former chief executive being suspended. Has he been suspended? Was the act to remove him from his post?

Mrs Ghosh: He was removed from his post.

Q76 Mr. Khan: It was an administrative act, not a disciplinary act. Is that correct?

Mrs Ghosh: That was an administrative act, not a disciplinary act.

Q77 Mr. Khan: So the answer to my colleague's question is that nobody has been sacked or suspended, not even the former chief executive?

Mrs Ghosh: I was taking the question in the spirit, rather than in the letter. Again, I have to operate as an accounting officer and as a senior civil servant within a legal structure. The previous chief executive of the agency is a serving civil servant, so the employment law that applies to civil servants applies to him.

Mr. Khan: He has not been suspended. That is what I am trying to get to.

Mrs Ghosh: He has been removed from his office, and as has been widely reported, since then, as I said, there were initially some health issues. We have now made an offer to him, and until those issues are resolved, he is a serving civil servant still.

Q78 Mr. Khan: We have about six minutes to clear all questions, so shorter answers will help me and the Committee, I am sure. The next question is: it has been seven and a half months now since he has been on leave-we shall call it leave: the usual word. It will be some time more before you agree his terms of leaving.

Mrs Ghosh: Not very long, I hope.

Q79 Mr. Khan: Why the delay?

Mrs Ghosh: As I described initially, there were some health issues where I had a duty of care. We then had to establish, because his employment history was quite complex, the contractual basis on which he was employed. We then had to calculate the nature of the offer that we would make, and we have now made it.

Q80 Mr. Khan: Can you get any clearer case of a chief executive in a Department not being able to do his or her job than this example? It has taken eight months to get to where you are and you still have not reached the end.

Mrs Ghosh: As I said, I have to operate within the employment law in relation to permanent civil servants. To sack a permanent civil servant on the basis of performance requires certain pre-actions in terms of management of poor performance, which for reasons that we have been discussing did not apply in this case.

Q81 Mr. Khan: That leads me on to my next question, which is: does the chief executive have sufficient power to make decisions by himself or herself without a senior management team helping him or her? What I find surprising is how he is the only person on leave, and nobody else who he would talk to on a daily basis or in the weekly meetings has been disciplined in any way at all. Have others been moved sideways or moved out of the Department?

Mrs Ghosh: They have been moved-I think this comes back to an issue about capability for the particular task ahead of them-with, I think, one exception. Tony now has a completely new top team, and the other people involved have been moved to posts that are more suited to their skills.

Q82 Mr. Khan: Have any of those been in any way disciplined? Are there any blemishes on their record?

Mrs Ghosh: I think your report is quite a good blemish on their record.

Mr. Khan: No, it is not, because nobody is named.

Mrs Ghosh: Just to come back to this, I would be happy to share with you the rules within which we have to operate. A disciplinary offence requires certain levels of proof at the time.

Q83 Mr. Khan: Capability is one of the reasons you can dismiss, but linked to that is competence.

Mrs Ghosh: Poor performance. Indeed, you can do that, but you have to go through quite a long process of warning. This is just under normal employment law, but it also applies to civil servants.

Q84 Mr. Khan: Have any warnings been given?

Mrs Ghosh: Yes, because they have been moved out.

Q85 Mr. Khan: Right, so on the disciplinary files of the people who have been moved out, there will be evidence of them being warned about their conduct, capability and poor performance.

Mrs Ghosh: No, because the evidence is post hoc.

Q86 Mr. Khan: So what?

Mrs Ghosh: What we have tried to do in the RPA is to get a fit-for-purpose senior leadership team in, and that is what we have done. In the case of the-

Mr. Khan: My question is specifically about-

Mrs Ghosh: In the case of some of the senior leadership team below Johnston McNeill, it was clear that there was no wilful issue about poor capability.

Mr. Khan: It is called incompetence.

Mrs Ghosh: No, it was simply that they were in some ways not capable of understanding the challenge that was there. That is why moving them to jobs more suited to their skills is a perfectly appropriate thing to do.

Mr. Khan: With the greatest respect, that is waffle. Nobody who is incompetent does it wilfully. They are incompetent. They may need better training, or may need to be disciplined or moved out, but they are incompetent.

Mrs Ghosh: They have been moved out.

Mr. Khan: Right. But there are no blemishes on their record, according to you.

Mrs Ghosh: Well, the blemish on their record is that they have been moved out, following a report like this, and similar reports from the DEFRA Select Committee.

Q87 Mr. Khan: I do not think we are making much progress here. In answer to one of the previous questions, you referred to Ministers being responsible for deciding the dynamic state of the hybrid system.

Mrs Ghosh: Yes.

Mr. Khan: Mr. Lebrecht subsequently confirmed that that was hardly surprising, bearing in mind the advice that that was what we should go for. Would the people who advised Ministers to use the dynamic system, in hindsight, give the same advice again? Have you spoken to them?

Mrs Ghosh: Yes, they would give the same advice.

Mr. Lebrecht: Just to be absolutely clear-Ministers asked us to give advice on a number of options. We analysed those options and the Ministers took a decision on the basis of that analysis. It was entirely objective in that sense. I would not want you to have the impression that officials were pushing Ministers.

Mr. Khan: No; until you gave your supplementary answer, the impression that had been given by Mrs Ghosh-I do not know whether it was intentional-was that the dynamic system was the Ministers' fault.

Mrs Ghosh: No. I never said it was their fault; I said that they took the decision. As both the report and I said, the decision in itself was not the cause of the problems that subsequently arose.

Q88 Mr. Khan: The report tells us that the application form for the single payment scheme was difficult to understand and complete and that the staff who were contacted by the farmers lacked the competence and knowledge to deal with queries. Have those two things now been changed?

Mrs Ghosh: Yes, I think that the 2006 application form is much shorter and that the customer support systems that we have put in place are much better.

Q89 Mr. Khan: What consultation did you have, Mr. Cooper, with farmers and those stakeholders when you improved the systems?

Mr. Cooper: When it came to the application form, we spoke to our regular stakeholder meeting. We have simplified it where we can, although there is a limited amount that could be done with the form in the current year.

Q90 Mr. Khan: I am afraid that my time is up. My final question is for Mrs Ghosh. Are you satisfied that you have sufficient tools at your disposal to deal with staff who are incompetent and who perform poorly?

Mrs Ghosh: Yes, but we are always looking for ways of streamlining and speeding them up.

Mr. Khan: I do not understand what you mean. That must surely mean that you are not happy with the tools at your disposal.

Mrs Ghosh: No, I think the tools are fine-

Q91 Mr. Khan: The way civil servants operate is fine?