Oral evidence: e-Borders and successor programmes, HC 643

Oral evidence, 16 December 2015.

Witnesses

Michael Cavanagh, Manager Facilitation, Aviation Safety and Security, British Airways, and Sue MacKenzie, Operations Director, P&O Ferries, gave evidence.

Chair

Good afternoon everybody and welcome to the Public Accounts Committee. We are here to look at 12 or 13 years of policy on e-borders—not so much the policy, but the money that has been spent by the Government to try to improve border security. We are looking at the practical issues around that, such as IT, and, crucially, what is projected to be more than £1 billion spent on the programme by 2019. We all know that border security is vital to the country—the recent attacks in Paris make us only too aware of why that is—yet over a 12-year period, the Home Office has continually failed to deliver to the objectives it set itself. Some of those objectives have changed and there has been quite a muddled picture. Some things have improved. Advance passenger information is better now than it was when this all started, but it is not anywhere near the target that the Home Office set then for 95% coverage by 2010 and 100% by 2014. It is alarming—I will explain why for me particularly—to hear that the Home Office is still reliant on the same IT systems that it had more than 10 years ago. There are some clear reasons for this failure, which we will go over in our session. We also want to look into where this is now and where it is going. Our first panel is made up of Sue MacKenzie from P&O Ferries, where she is operations director—welcome, Ms MacKenzie—and Michael Cavanagh, who is the manager of facilitation at British Airways. We are hoping to hear what it has been like over this period of time for your organisations dealing with the interface with Home Office systems. I need to declare an interest at this stage. I was a Home Office Minister—a junior immigration Minister—from 2007 to 2010, so I have some knowledge of the programme from that role. Deidre Brock will lead off today’s questions.

Deidre Brock

First, Ms MacKenzie, the Report mentions that the UK Chamber of Shipping highlighted as early as 2005 that ferries would require special treatment because, for example, passengers are not all booked individually—they are often counted in groups—and they frequently book without advance notice. How do you rate the Department’s response to that and similar issues in the programmes from a ferry operator’s point of view?

Sue MacKenzie

I think it is fair to say that on the e-borders it was quite frustrating. I arrived in the company at the end of 2005 and the process had already started. My perception was that we were trying to impose a transatlantic aviation solution on the maritime industry, and that clearly was not going to work, although we might have been able to make it work—I cannot speak for other operators—for ourselves at maybe our Hull operation, which is not quite as intense. With Dover-Calais, we couldn’t, as we never have a position where people are going past a point one by one. We have cars and coaches carrying 50 people turning up, so the aviation solution was never going to work in a maritime environment.

Deidre Brock

When you raised this issue with the Department, what was its response?

Sue MacKenzie

I think for quite a long time—stonewalling is probably too great an exaggeration—there was a feeling that perhaps the industry was trying to be difficult, which we were not. We accepted that border security was obviously an important issue to us all, and we were looking for a way that we could work without bringing the whole of east Kent and Nord–Pas-de-Calais to a halt.

Deidre Brock

The Report also suggests that some carriers had perceptions of unequal treatment by the Department and that they were required to make more costly changes than their competitors. How does that compare with your experience at P&O?

Sue MacKenzie

I suspect that that was a concern primarily on the cross-channel routes where we include Eurotunnel as a close competitor. All the Dover-Calais ferry operators were represented throughout by the Chamber of Shipping and by Dover Harbour Board. We, DFDS and MyFerryLink felt that Eurotunnel and the ferries had to be treated equally because we were such close competitors. Clearly, if we had something that was bringing our operation to a halt, people would go via the tunnel, so we felt that competitively it had to be, from a security point of view, equal.

Deidre Brock

Why do you think the Department was making a distinction?

Sue MacKenzie

Because we operate under maritime legislation and Eurotunnel operates under rail legislation, so it is covered by a different regulatory environment. On what we were being asked to do through e-borders, we knew that Eurotunnel was not always being asked to do the same thing, and likewise, with subsequent exit checks—the same sort of thing.

Deidre Brock

Mr Cavanagh, the National Audit Office Report states that Raytheon said that it “considers that carriers were resistant primarily to the programme rather than as a result of any shortcomings” in its engagement. What do you make of that assessment?

Michael Cavanagh

We provide passport data to a number of countries, and we were doing so before the e-borders programme started, so we fully understand the need for security at the border, and we were willing to comply—

Chair

Sorry, Mr Cavanagh; we have bad acoustics in this room. Can you speak up a little?

Michael Cavanagh

Sorry. We were already providing passport data to other countries before the e-borders programme started. We understood the need for aviation security and for prompt passenger processing on arrival at the airport, so we were ready to comply with the data. Indeed, British Airways was providing data as early as 2004 under the Semaphore programme. We wanted them to fit with international standards of data provision so that we could, in the most cost-effective manner, implement that into our own systems.

Deidre Brock

When you say international standards of data provision—

Michael Cavanagh

There are defined standards through ICAO and IATA on the format of messages. There are well-understood formats for sending passport data electronically, and we wanted those to be adopted in the new system.

Deidre Brock

And Raytheon would not do that?

Michael Cavanagh

Not all of them, no.

Deidre Brock

I see. So you felt there were shortcomings in its engagement with you.

Michael Cavanagh

Yes, absolutely.

Deidre Brock

Is that the only one, or the main example? Is there anything else?

Michael Cavanagh

There were several issues that seemed to run for a long time, such as the way we might connect to the Government system. They wanted to introduce a system whereby we had to have some kind of digital certificate, which would have to be renewed on a regular, ongoing basis, whereas, again, the international standard is that we provide a secure connection and once it is in place it sits and runs quite happily. We did not want to have that added overhead of managing a digital certificate in our system. The other thing was about whether it was going to be an interactive system—whether we would get a response back from the Government saying that customers could travel—or just a list of all passengers on the flight. That was quite key for us because if it was going to be an interactive response system, as we process customers 24 hours a day at some point in the world, we need to ensure that systems are robust and fully working, and working at speed, so we do not hinder the check-in process.

Deidre Brock

The Report also states that in 2009 carriers estimated the cost of implementing e-borders would be around £100 million per annum, rather than £5 million, as claimed by the Department in 2006. Do you have any ideas why the Department’s estimate was so wildly incorrect?

Michael Cavanagh

Some of it stemmed from how the requirements developed. For instance, we have to send booking data to the Government. If we have to send that once, it is going to cost us a certain amount of money because we have to pay for every booking that we send. If we had to send it five times, which was a requirement at one point, that would cost us five times the amount of transmission cost.

Chair

Why would you have to send it five times? What was the reason for that?

Michael Cavanagh

So that you could ensure that the Government had the most up-to-date information. Those requirements were changing throughout the process. Where we have ended up is that we will send booking data when it changes, but at one point it was to send all the booking data for that flight five times.

Deidre Brock

That leads on to my next question. How do you feel the programme is working now, and how can it be improved from your point of view?

Michael Cavanagh

The programme is working much better now. There is much better engagement from the Home Office team directly with us. They have worked with us to ensure that we can provide all the data that we need to. There are a few areas that could benefit us as the airline industry, which we have asked for several times. That is to do with including information about people’s visa status in the response message that comes back, for instance, so that if somebody has an expired UK visa, we would never allow them to board in a foreign airport. Unfortunately, that is still not yet built into the e-borders programme.

Mr Bacon

Could you say that again? I did not hear it. Unfortunately?

Michael Cavanagh

It is still not built into the e-borders programme. We get a security message back saying whether a person is a security threat or not, but we do not get told that their UK visa has expired, so we still have to check that manually.

Mr Bacon

And it is not even designed to do that.

Michael Cavanagh

It is not designed to do that.

Mr Bacon

Amazing.

Caroline Flint

Given that this is dealing with matters of national security, Government Departments will inevitably need to work with the commercial sector, whether operational such as yourselves, transporting people into the country, or on the supply side with contracts to develop the systems. There were four years of planning before the contract was awarded. How much do you think the onus on building relationships with stakeholders such as yourself is the responsibility of the Government Department, or for that matter Raytheon, which won the contract? I am interested to know how much more you felt could have been done in the four years of planning to understand more of the complexities of what you were being asked to deliver.

Michael Cavanagh

Personally, that was before my time on the project, so I cannot comment too directly on that. My understanding is that there was quite good engagement with the Home Office at that time, but the conversations that were played back to them about what would work and what would be difficult did not seem to make it through to the Raytheon team when it started work. When it started, we seemed to go back to the beginning of the phase.

Sue MacKenzie

That was the same for ferries as well. We had made some small progress with the Home Office team. One factor in the Report is that the team kept changing, which was a difficulty.

Caroline Flint

In the Home Office?

Sue MacKenzie

Yes, and whoever was taking the lead, whether it was from UK Border Force or whatever it was called at the time. That kept changing, so it was like three steps forward and one step back, but when Raytheon came on board, we went almost back to the beginning again, having to go back to explaining that maritime is not aviation and trying to go through solutions that would make it work.

Chair

Caroline, I have to remind you about the declaration.

Caroline Flint

Sorry. I was a Home Office Minister from 2003 to 2005. I covered tackling organised crime and various other things in the Home Office, but not this. What you are saying about Raytheon is interesting. If I have understood correctly, you are saying that certain things were ironed out in terms of what would be expected of you as operators and carriers. Are you telling the Committee that that was not understood by Raytheon and was not taken forward?

Sue MacKenzie

Speaking for us, we were making progress. Whatever the contractual arrangements were between the Home Office and Raytheon did not seem to reflect that progress. I know the Report goes into some detail about Raytheon thinking that it had a set of solutions ready that it was then going to start working on. Certainly we from maritime had not arrived at that solution yet. Also, the solution that it seemed to be working on was two years previous in our discussions with the Home Office.

Caroline Flint

Things have moved on; exit checks have happened over the summer and seem to be going quite well. Given all the information that you are being asked to pass on, have you any sense of what added value that gives in detaining people who are a threat to this country?

Michael Cavanagh

We get told the number of people who get stopped. We have had alerts for people who should not be allowed on our flights, and we have removed them, but the numbers are very small.

Caroline Flint

Can I check on something? You are alerted to people who are stopped. Do you keep information going back over the last 10 years on how many people have been stopped from going on a British Airways flight?

Michael Cavanagh

Not for 10 years. I report to our board of directors, and it probably goes back about three years.

Chair

Do you destroy that for data protection reasons?

Michael Cavanagh

We anonymise it and then we destroy it. We anonymise it after about a year, and then we destroy it.

Caroline Flint

So you have no way of knowing beyond three years, say, what impact the gathering of information has had on our ability to detain people who are a threat to this country? I am not saying it is your responsibility, but you do not have the information to say whether it has added value or is worth while.

Michael Cavanagh

No, I am afraid not.

Chair

Before I bring in David Mowat, I want to ask about the smaller carriers. You are both from big organisations. Mr Cavanagh, can you tell us what it was like for the smaller carriers? You were working with the Semaphore project at an earlier stage, so British Airways was in there quite early through all the faults of the system. Can you give us a flavour of what it was like for the smaller carriers that did not have the same sophisticated IT back-up that an organisation as big as British Airways did?

Michael Cavanagh

Yes. Some of the other UK carriers—we work quite closely together—had transmission mechanisms that were not then supported. I am told they had to build new transmission systems; for them, that would have been quite a large change in their business. As for a lot of the European carriers that I worked with, there were long periods of silence when they were not aware of what was happening. I would go and meet them and they would say, “Has the whole programme stopped? We have not heard anything about it. We have given them a list of issues. Raytheon has gone away and we have not heard back.” So there was a lack of communication with those carriers, and there was a lack of clarity around what they legally had to provide and what they were not allowed to provide.

Chair

Richard Bacon has one question, and then David Mowat.

Mr Bacon

One question about what you said a moment ago. A person of interest may arrive at an airport and you are given the message by the UK Government, “Do not let them on the flight,” so consequently you don’t. If, a few weeks or four months later, they try to get on another British Airways flight, are you saying that you do not retain the information from when the Government told you not to let them on, so you have to go and check again?

Michael Cavanagh

Yes.

Mr Bacon

So there is no way that you keep that information yourself. Even though you knew that you had been told previously that they were a security risk, you do not retain that?

Michael Cavanagh

If we are aware that they are a security risk, we have our own watch list, if you like—

Mr Bacon

That is what I am asking. If the Government have told you that they are a security risk, they are still a security risk four months later when they come to a different airport to try to get on a different British Airways flight. Would your own systems tell you that? Or would you once again, as it were de novo, rely upon your question going to the British Government?

Michael Cavanagh

We haven’t had that instance yet, but we could take that person’s details and put them into our system, yes.

Mr Bacon

But you don’t do so.

Michael Cavanagh

I am not aware that we have done that at this point. I am not aware that we have had that kind of threat on our aircraft.

David Mowat

I have a question for British Airways. I had not appreciated that interfacing with all these other countries is quite an industry. Presumably you have an interface team, as you discussed, dealing with the US and every other country that is doing one of these programmes. Is that true?

Michael Cavanagh

I look after the responsibility for us to provide data to all countries. I set up a project team, depending on the size. There are industry standards in place. There are simple mechanisms for providing data. We provide data to approximately 27 or 28 countries now. Most of those are very simple for us to set up in our system, so we don’t need a team to do that. For some of the larger countries such as UK, Canada, USA and Australia, yes, we have to put a team in place and make changes to our system.

David Mowat

Right, you assign a team. In terms of the history of the past 10 years, has your team that has been interacting with this UK process felt it was significantly worse than the way other countries were dealing with it? You must have had that dialogue internally.

Michael Cavanagh

Yes, in terms of the uncertainty of what was being required, and the way in which the issues were allowed to drag on.

David Mowat

So, for example, when dealing with the US, if an issue was there, there would be a process to resolve the issue, it would be resolved, and that would tend to be it. Whereas, with the UK, the issue was there, it would be resolved, and then they would forget they had resolved it and come back later with a different team or something. Is that the sort of process for your team?

Michael Cavanagh

Yes, that is a pretty fair analogy, although different countries’ Governments work in different ways. Some Governments are very clear. They say, “This is the requirement and if you cannot do it, do not come here.” The UK Government were much more engaging than that. They wanted to work with all the carriers to make sure of the system.

David Mowat

Engaging but inconsistent. Is that reasonable?

Michael Cavanagh

I’m afraid so, yes.

David Mowat

The consequence of that, presumably, for your team would be quite annoying over a period of time. It is difficult to work with people who deal with you that way.

Michael Cavanagh

Yes, what is very difficult is knowing when exactly we should start to spend money changing our systems, because we would not want to make a lot of changes to our systems and then find that the goalposts have moved.

David Mowat

Have you got an estimate of how much money you have spent, as BA, in relation to this effort?

Michael Cavanagh

Not a detailed estimate. It would be close to £1 million at least.

David Mowat

Over 10 years.

Chair

Ms MacKenzie, does P&O have a similar estimate?

Sue MacKenzie

On e-borders, we never actually got to the point of making system changes, because we never got to the point of having something to change our systems to. For exit checks, probably we have spent about £500,000 in making changes to some of our legacy systems, but the ongoing operational costs are a lot more than that.

David Mowat

If you spent £1 million, presumably many other airlines would have spent a similar amount.

Michael Cavanagh

Yes.

David Mowat

That sounded a bit low to me when you said £1 million—I was a bit surprised by that. Let me ask P&O the same question I asked you. You would have had a team dealing with this process. Did your team find it was tougher than dealing with people doing the same work in other countries?

Sue MacKenzie

We operate only on mainland Europe and Northern Ireland.

David Mowat

So you don’t really have it, then.

Sue MacKenzie

To be honest, none of them are doing anything similar, or have been making any additional changes to processes in recent years. I concur with Michael that it has been quite a frustrating process, really. On e-borders, the team was very much the operational team, because we were trying to figure out with the various Home Office personnel how we were going to make it work, We never actually got to the point of getting our IT colleagues involved to make changes to legacy systems.

David Mowat

So P&O has spent about £500,000 and you are saying that BA has spent £1 million. There may be about 30 airlines, or something of that type, so this could be roughly £50 million that third parties have been required to spend.

Michael Cavanagh

There are a lot more than 50 airlines impacted.

David Mowat

So it could be £100 million, then. I am just trying to get an approximate figure.

Michael Cavanagh

I must clarify. I haven’t got the figure to hand of how much our IT team has racked up over the years. I would estimate that it is in that ballpark.

David Mowat

Could you revert on that? It did sound a bit low to me, to be honest.

Chair

We are not asking you to do a lot of work, but if you have that figure back at base at BA, it would be helpful for us to have it for our Report.

Michael Cavanagh

I will do that, yes, although there are a lot of elements that are not easy to quantify. For instance, we did not collect passport data on all our routes until the e-borders programme started. We would ask customers to show us their passport and we would check that they had a passport, but we would not have to capture that data, store it, format it and transmit it for every single route, like we do now. The impact that that has had on our airport process is very difficult to quantify.

Chair

But then you’ve also got online bookings and so on, so I suppose that picks it up for some. Tell us what you can in the letter, and then if you can codify the things that are harder to pinpoint in terms of processes, just in summary, that would be helpful.

David Mowat

Just a final question for BA. To confirm, do you feel that dealing with the Home Office effort over the past 10 years was worse than dealing with any of the other countries that were doing something similar?

Michael Cavanagh

No—

David Mowat

There were others that were as bad.

Michael Cavanagh

There were other that were worse and there were others that were better.

David Mowat

Who was worse?

Michael Cavanagh

There are countries in South America that are worse. The US is very hard to deal with, just because of the way they work, but the way they work is different. The UK was clearly the biggest impact for British Airways because it is every single flight for us.

Nigel Mills

On that theme, Mr Cavanagh, do you think we have ended up with one of the most effective systems that you deal with, or do you think that some of the overseas ones are a bit more robust and perhaps throw out more passengers than we do?

Michael Cavanagh

From our perspective, there are overseas Governments who appear to handle the data more effectively, yes.

Nigel Mills

In what way do they handle it more effectively?

Michael Cavanagh

If our customers are travelling to the US, I know that the data they submit as part of the passport information that they give us is presented to the immigration officer on the desk, who sees exactly the information we have captured and sent to them. If it is incorrect in any way, they know about it and come back to us very quickly. They also have the ability to come back on customers’ visa status and whether or not they have got an ESTA to travel into the US, so they seem to be much more integrated. They seem to be a few years ahead of where the UK is.

Nigel Mills

Do you ever get examples of where somebody is perhaps transiting through somewhere and you submit the data to more than one jurisdiction but get a different outcome—so they are refused by the US, but are not turned away by the UK authorities on the same data?

Michael Cavanagh

No, we haven’t had that yet, but we will get to that. To use a very good example, if we have a flight going to Canada, we have to provide the data to the UK, the US and Canada, so three authorities have a say on whether a person flies on that aircraft. We haven’t yet got to the point where people come back with different responses.

Nigel Mills

That might be good—it might mean they are all sharing the same intelligence—or it might not.

Chair

I wanted to ask you what it feels like now. We have talked about 2003 and that maritime never quite got there. I remember speaking to some colleagues about intra-UK routes, so I understand the challenges for ferry ports. What is it like now? According to the latest projection, we expect to see this delivered in 2019. Does it feel like it is on the right track now, or do you think there are still questions? If so, what are those questions?

Sue MacKenzie

Exit checks were put in for ferries in April. All credit to the Home Office on that—it was very determined to get that in, and we have got exit checks in. I don’t think it is fair to say that it’s had no impact. It’s reduced our check-in time in Dover by about 30% without having new infrastructure in place to support that growth. Queues are a lot longer, but we are doing exit checks. I am not sure what all that data is being used for because we don’t get very much feedback. I was at a meeting recently at which it was said that they’ve had something like 900 million bits of data, but I don’t know what’s being done with it all. To demonstrate the benefit of doing it to companies such as ours, it would be really helpful to get some sort of feedback on the benefit of exit checks, because they are having an impact on our operation. During the exit check process, although we had a firm date by which they had to be done, for various reasons, the Home Office worked very well with the various teams and the IT team to get a maritime solution in, so we have got that. [Interruption.]

Chair

Sorry, delayed by the bell. We are nearly at the end, but I don’t want to cut you off just yet because I want to hear from Mr Cavanagh and we have one or two more questions. We will be about 10 minutes, or perhaps less if we can get back quickly. I urge people to be back as quickly as possible. Sitting suspended for a Division in the House. On resuming—

Chair

I think, Mr Cavanagh, you were just about to answer the question about what the programme is like now, whether it is working and where you think it is going to be by 2019—that is, assuming Ms MacKenzie had finished.

Sue MacKenzie

The only other point I would make is that in Dover-Calais, we are in a juxtaposed port, so UK Border Force are doing all the checks in Calais on people coming in anyway. That is a big change from e-borders, where, even though UK Border Force was scanning the passports in Calais, we were going to be expected to do them again, so that is a big change. The only other factor that is still challenging us at the moment is how we do 100% exit checks on coach groups. Last weekend, we had one of our big coach exit weekends—I think 600 coaches go through in about four hours. It is the combination of the emergency powers that PAF, which is the French immigration force in Dover, are using, and having to do 100% exit checks. PAF are getting everybody off the coach to do 100% checks. Those people then go about 200 yards and all get off the coach again, because we have to do the exit checks on them, so it was taking coaches about four hours to get through the port last week. That is a challenge. These are university ski groups or old-age pensioners going on battlefield tours and things like that, so they are perhaps not high risk—perhaps there is a way we can demonstrate that they are not high risk, but we need to work with the Home Office. It has been a challenge to get a solution to that at the moment.

Chair

That is an interesting and well made point.

Michael Cavanagh

As I understand the scope of the programme, in terms of being able to provide data on all our passengers and stop people who are going to be a threat, I think the system is now working. There are elements that I do not feel it has delivered. I do not think it has expedited customers’ progress through the immigration control when they arrive. I do not think the data is adequately shared with the immigration control. The customer provides us with data up front; we transmit it; they are screened; they arrive, and then they seem to go back to square one and have to show all their data and start again. We do not see any benefits in that area, but in terms of the core objective of screening passengers, it appears to be working.

Deidre Brock

My question is for Mr Cavanagh and possibly Ms MacKenzie as well, about who pays for passengers to be returned. If they leave their country of origin and get through the initial checks, but the data is not received in time and they board the plane or ferry and arrive in the UK, who pays for them to be returned to their country of origin?

Michael Cavanagh

If we, as a carrier, bring someone to the UK who is not admitted, we have to ensure they are removed. If the customer has a return ticket, we use their return ticket. We can seek to get money off the customer to buy a ticket, or we have to remove them at our expense.

Sue MacKenzie

It is the same for us.

Deidre Brock

So receiving good-quality data in time for you to make those decisions before customers board is obviously of great importance to you.

Michael Cavanagh

It is, except of course the e-borders programme is focused on security, so none of that would come up in terms of having good data, which is why I mentioned earlier having a visa check included in the response. That is why we push for that. If someone has a visa that has been cancelled and we are not aware of it—it might even show as being valid in their passport, even though it has been cancelled—we would prefer to know about that before we transport that customer.

Chair

I have another question for Ms MacKenzie. In the past, there used to be immigration officers on board ferries to do checks of passengers. In all the discussions about how this might work, has that been factored in as a possible option?

Sue MacKenzie

I have been with the company for 10 years, and that was before my time.

Chair

It is well over 20 years ago. It was certainly happening, but it stopped at some point.

Sue MacKenzie

It might have been mooted as an idea we had in a brainstorm at one point, but it never really went anywhere.

Chair

I suppose it would still be difficult to check that everybody on board had gone through it.

Sue MacKenzie

On Dover-Calais it would be very difficult, because we could have 2,000 passengers and it is a 90-minute crossing. On our longer, overnight route it is probably a more viable option, because it is overnight so you could get people to provide you with the information.

Chair

But at the moment, that is not really on the cards as a proposal.

Sue MacKenzie

Not as far as I am aware.

Chair

I will ask further witnesses about that. We have the architects of this scheme coming in next—the people who were involved in the past and the people who are involved in making sure it happens in the future. If you were us, what would you ask them? Ms MacKenzie?

Sue MacKenzie

Erm—blimey.

Chair

No holds barred.

Sue MacKenzie

It is not so much about what you would ask them; it is just about understanding, as lessons learned, that all transport industries aren’t the same—even the tunnel and the ferries aren’t the same, and I do get that. It is about trying to listen to the experts in the operation. Even with exit checks, we were advising the exit checks team not to implement on 1 April, for obvious reasons—3 April was Good Friday, which was our busiest day. Eventually, very late in the day, they did postpone it, but it was almost like we were being difficult. Actually, we weren’t; we were trying to be very co-operative, but we were trying to do that in the context of keeping our businesses running.

Chair

Mr Cavanagh?

Michael Cavanagh

I have to agree with that: it is about maintaining that customer engagement—with us as customers. The airline industry is diverse as well: a charter operation is completely different from our scheduled operation. A small foreign carrier that has one flight or two flights a week into the UK will have a completely different perspective from us—we have 190 flights a day. So it is about having an adequate level of engagement with all levels of stakeholders.

Chair

Thank you.

Michael Cavanagh

Just one extra thing. For us, this has been a cost-only exercise so far, and engagement works two ways. It would be nice if there was something for us at the end of the tunnel. We have been promised a lot of things verbally in the past—none have come through. So it is about that collaborative working.

Chair

And the something, for you, would be some useful information from the data that is collected.

Michael Cavanagh

It would be knowing that it is used in a useful way, it would be communicating information about visas, and it would getting citizens who you know are no problem through the border in a quicker manner.

Sue MacKenzie

I would absolutely support that. We can get advance passenger information from our coach groups, for instance, relatively easily, but what’s the point if, when they get to Dover, they are still going to be turfed off the coach twice? If we can get that information, and our battlefield tour and our ski groups can go through the port quickly, that is a huge benefit to us, to our customers and to UK plc, to be honest.

Chair

Thank you very much for your evidence—it has been very helpful. We have another session now, and you are very welcome to stay. Our transcript will be online, uncorrected, in the next couple of days, so do have a look, although I think it is sent to you anyway so that you can correct any factual errors. If you want to send us anything, please do. We will publish our report possibly in February, but certainly in early 2016, and we will make sure you get a copy. Thank you very much for coming along. Examination of Witnesses

Witnesses

Mark Sedwill, Permanent Secretary, Home Office, Sir Charles Montgomery, Director General, Border Force, Lin Homer, former Chief Executive, UK Border Agency, and Richard Daniel, Chief Executive Officer, Raytheon UK, gave evidence.

Chair

Apologies for the slight hiatus and for keeping you waiting, but as you could see, we had a vote. As those who were here earlier will know, we are here to discuss the e-borders programme and successor programmes, so, unusually for an NAO Report, we are looking at a 12-year period. We all know the importance of security at the border—with recent events around the world, we are very clear about that. One of the interesting and important things for the Committee about this project is that it is projected to spend over £1 billion by 2019, when, hopefully, it will finally be implemented. Along the way, there have been some challenges and some failed points of delivery. There have been some things that have worked a bit. Advance passenger data is better than it was in 2003, but it will not be at 100% by 2014, as predicted—that milestone has been missed. I am also alarmed to hear—I will say why in a moment—that the Home Office is still reliant on the same IT systems it had over 10 years ago, despite all these programmes. I need to declare an interest: I was a Home Office Minister between 2007 and 2010. I welcome our witnesses for the second part of our session. We have Lin Homer, the former chief executive of the UK Border Agency—I welcome Lin, who has a different hat on today. Sir Charles Montgomery is director general of Border Force and the senior responsible officer for the border systems programme. Is that right?

Sir Charles Montgomery

I am the chairman of the Portfolio Board.

Chair

Thank you for correcting that. Mark Sedwill is the permanent secretary at the Home Office, and Richard Daniel is the chief executive of Raytheon UK. It is worth highlighting that Lin Homer has not been at the Home Office for nearly five years. I think you left in 2011.

Lin Homer

I left at the beginning of January 2011.

Chair

You went to the Department for Transport. Thank you for going back and looking at your papers. The Committee thinks it is important that people who had responsibility for programmes get called back, although we recognise that that involves some work. You were obviously engaged with the NAO Report. Have you had a chance to look back at any of the information that you were dealing with since the NAO Report was published?

Lin Homer

Yes, Chair, I have had a look at the business case and the independent review that was done in December 2009.

Chair

It is just helpful for us to know what is uppermost in your mind when you answer questions. Richard Daniel, I know you were not at Raytheon when all of this happened, but your company was, and there has been a legal dispute going on for five years. We recognise that you may need to refer to people behind you for some answers to questions. We hope that, despite the distance for you two particularly, you will be able to be as forthcoming as possible. We are really keen to know what has worked, what went wrong and what will hopefully work in future, because this is absolutely vital to the taxpayer and also to the security of our country. Without further ado, I will hand over to Deidre Brock, who—

Richard Daniel

May I make a correction? I was with the company, but I was not involved in the e-borders programme.

Chair

Thank you for that correction. Deidre Brock.

Deidre Brock

My first question is for Mr Sedwill. The NAO Report mentions that spending records prior to 2006-07 were not available because the accounting system changed. Why aren’t those records available now?

Mark Sedwill

Just for the reason the NAO Report set out. I cannot give you more detail than that. I am happy to try and provide it afterwards, but I think it is just a technical change to the accounting system.

Deidre Brock

That would be helpful, because the programme is live, and it is very difficult to tell whether the programme was even more millions adrift than is the case now. Presumably, it was available for the arbitration process.

Mark Sedwill

Again, I would have to come back to you on that.

Deidre Brock

Can you provide us with a note on that?

Mark Sedwill

Yes.

Chair

It would help. We find it hard to believe it was not available for the arbitration process, but, if it was, we would like to know when it was destroyed and who authorised it. I know you have a standard procedure, but, given that this is an ongoing programme, as Ms Brock has said, it would be helpful to have a detailed note if you cannot answer that now.

Deidre Brock

This is one for Ms Homer. In the original Semaphore pilot, which helped convince the Department that the e-borders programme should get the green light, it was decided to exclude meaningful consideration of maritime, rail and general aviation and maritime traffic from the pilot. Do you think that was a wrong decision in hindsight?

Lin Homer

That decision predates even me, so I do not know the consideration that went into that, but I don’t think so. This was probably one of the larger-scale pilots ever done on an emerging programme, in a way that was is slightly prescient given the approach we would take now, which is to go for agile development. In those days, it was much more common just to let a big contract with no pilot at all. So the fact that we had a working prototype when we moved into the e-borders contract was unusual and very helpful. We were also aware, from the beginning of my involvement in the project, that maritime and Eurostar would be particular and different. We always anticipated that we would have to do some development work to bring them on board. I don’t think we ever simply thought that what we were doing for air carriers would lift and drop. I don’t think we took the view that we knew everything, but what it did tell us was that we had a working system that could deal with the majority of traffic, and that turned out to be the case.

Deidre Brock

It was quite a considerable amount of time in the planning—about three years, I think—before the green light was given. I still cannot see why a potential difficulty such as this, where a number of passengers really were not being taken into account at all, was not taken into account when you were assessing the programme.

Lin Homer

If I were to put this into context, we were looking at a programme that would help us secure our borders—we and most of the other major developing countries, such as America and Australia, but also a number of others. The predominant risk—for immigration, but also for crime and counter-terrorism security—at that time was, rightly and understandably, regarded to be air. So we were looking at a model that could fairly rapidly deal with not only the current levels of traffic, but the expectation that that would almost double in that period. There are different challenges for maritime and rail, and we were working, alongside the preparation for Semaphore, at looking into those areas. But the way we were doing it was very similar to elsewhere—for instance, if you look at America, it would still be the case that they have not really solved their land border, although, probably, their air border remains one of the most sophisticated in the world. So, again, I don’t think it was unique.

Deidre Brock

Do you think those challenges were properly factored in when you were coming up with costs estimates, for example?

Lin Homer

Yes, I do. I do understand that maritime believes we did not spend enough time on them—that we maybe didn’t manage them as well as they would have liked. I spent quite a lot of time myself, personally, talking with P&O and others around the Calais thing. But we were in a time and an environment where we were trying to make sure we were rapidly improving the security of our border. We had had 9/11, we had had the London bombs, and, bluntly, we were focusing on what the biggest risks were and how quickly we could move on them. The timetable for the programme always envisaged moving on to maritime and Eurostar later. So I don’t think it was a thoughtless judgment. As I say, probably, if we had tried to do everything in the pilot, you would have been running the programme, just at a smaller level.

Deidre Brock

Of course, but in terms of future costs, your estimates seem to be pretty wildly out of whack.

Lin Homer

No, not at all, and that is one of the things I disagree with the NAO about. The contemporaneous estimates suggested we would spend £1.2 billion by 2017, so if it is still only £1.9 billion by 2019, that seems surprisingly close to the original estimates.

Chair

Louise Bladen, do you want to come in on that? It is an agreed report?

Louise Bladen

It is agreed with the Home Office current administration. I think that is an important point of distinction.

Mark Sedwill

It is a cleared Report. We cleared the factual accuracy of the Report; we don’t agree with all the conclusions—just for clarification.

Louise Bladen

I think, at the final stages, we asked you, Lin, if there was anything factually inaccurate still in the Report, to flag that up. I think that is the status we were at by the end of clearing.

Deidre Brock

Mr Sedwill, point 13 of the summary mentions that when the e-borders programme faced difficulties, it was simply downscaled—data requirements were reduced and visa management systems were de-scoped. Is that the normal response to problems arising?

Mark Sedwill

If you face any programme that is running into some kind of difficulties—whether it is timing, financial or whatever—it makes sense to look again at scope. We also have to deal with the fact that, as you said, the programme has operated over a very long period—a decade or more—and the challenges that we have dealt with have changed over that time. The scope, in some areas, has increased—exit checks were an addition to scope. In other areas, scope was reduced to focus on the core capabilities that would deal with the security challenges we faced at the time those decisions were taken.

Deidre Brock

Do you feel the Department is getting a lot less for its money, though, as a result?

Mark Sedwill

Essentially, what we are getting is the capabilities that we need to secure the border. As the Report says, that is not yet efficient enough—we don’t have the capabilities we need to do that as efficiently as we’d like, and that is what the subsequent set of programmes will help us deliver—but it does enable us to secure the border effectively.

Deidre Brock

Note 2 to figure 3 on page 19 says the data is calculated based on the “number of journeys enabled to provide data to the Department,” rather than on “whether the data were…received or not.” Does that mean we don’t actually know what the figures are? Does that mean we are looking at a project that is, in effect, concealing a fairly systematic failure, even after almost £1 billion has been spent on it?

Mark Sedwill

Sorry, I am just—

Chair

Take a moment to read it. It is quite detailed and small print, if you haven’t got your glasses.

Sir Charles Montgomery

I have got the points. Could you repeat the question, please?

Deidre Brock

The data calculated is based on the number of journeys, rather than whether the data was received or not. How can we be confident in that data?

Sir Charles Montgomery

First, the system is not able to do what we would ideally wish to do, which is to identify this at the passenger level. However, Home Office Science has analysed the difference between the one and the other, and the difference is less than 1%. In terms of the overall figure work that you see in the Report, for example of completeness of information, which is 98%, that is within 1% if it was taken at the passenger level. Does that make sense?

Deidre Brock

Yes, although I suppose it takes only one person really, but still. Note 3 on the same figure also says, “Journey to and from the UK by land, general aviation and maritime are excluded.” Do you have any estimate of how many people arrive in that manner? Does that ultimately offer a means by which those controls can be circumvented by anyone who wishes to enter without coming up on the system?

Sir Charles Montgomery

Can I take commercial maritime first? We do receive some API on commercial maritime. That which we don’t, almost overwhelmingly—

Deidre Brock

Can you explain API for the folk watching at home?

Sir Charles Montgomery

Sorry, advance passenger information. The overwhelming majority of people who travel by maritime to the UK by scheduled routes come through juxtaposed controls in either Dunkirk or Calais, in which case their data and details are checked in advance of them physically crossing the UK border. That is general maritime. We don’t get advance passenger information on those individuals, but they are checked and their data is checked before they physically cross the UK border.

Deidre Brock

Okay, and general aviation.

Sir Charles Montgomery

We do have a form of API for general aviation. We link with National Air Traffic Services, which provides us with a picture of general aviation flights over the UK at any one time, and that helps us to reconcile reports that are required before those aircraft enter UK airspace with the passenger details on them. That has to be sent to us in advance and we can check them. It is a manual, inefficient process, but it does enable us to do that.

Deidre Brock

And I understand that the checks that are provided are not always very clear.

Sir Charles Montgomery

No, but if they are not, the aircraft will automatically be designated as high risk, and I have a 100% requirement to meet high-risk general aviation flights. That is the answer on general aviation. I am leaving general maritime to the end because it by far the most complex, as I am sure the Committee will acknowledge: 11,000 miles of coastline, the busiest shipping lane in the world, and with no control in maritime as there is in the airspace. We do get good intelligence for the general maritime community, and that has enabled this year, for example, some very high-profile headline interventions at sea and on shore from the intelligence that is handled by the National Maritime Information Centre.

Deidre Brock

So you are not saying that you are relying on the goodwill of ship and boat owners around the coast.

Sir Charles Montgomery

No, we are not relying on that goodwill at all. Later in the session, if you would like, I might build on what we are doing to improve the overall intelligence picture on general maritime.

Louise Bladen

We just wanted to think back to the Border Force Report we did in 2013. Certainly, at that point, when we observed general aviation flights and what was happening at Luton airport at the time, they were telling us—I appreciate that is two years ago—that not every flight was being met. They physically could not get to the GA flights sometimes. We just wanted to clarify whether that is a change of policy since 2013.

Sir Charles Montgomery

I recall that point in the previous Report. As I say, for high-risk aircraft on general aviation, my requirement to meet them is 100%. At airports such as Luton, if something is designated as a high risk, it was met in those days. However, in those days, medium and low-risk aircraft were not met. Now Luton airport is paying us for a premium service to enable us to do that.

Mr Bacon

May I come in on that point, because I was the one who asked you the question about this last time, Sir Charles? You said at question 227 that it was perfectly possible to get into the country without being checked. I asked you the question, “When the aircraft—a private plane—lands at an airport, it is possible in some cases for somebody to get off the plane and enter the country without being checked.” You said, “Yes, it is. Absolutely.” Is that now no longer the case, ever?

Sir Charles Montgomery

I never say never, Mr Bacon, as you may recall. I said then that there is every chance that somebody may get into the country without being checked through the general aviation route. That remains the case today. It is much more difficult for them to get into the country through the general aviation route, but NATS itself does not record 100% of all air movements in UK airspace, so that leaves me with a gap, as it did then, in terms of general aviation flights into the UK.

Mr Bacon

So there has been no change.

Sir Charles Montgomery

There is no change to that statement.

Mark Sedwill

Ms Brock, you asked about the land border as well. Charles did not manage to talk about the land border with the Republic of Ireland.

Sir Charles Montgomery

The land border with the Republic of Ireland, of course, is subject to common travel area arrangements—a long-standing arrangement between successive Governments. We therefore have no routine checks on that border. We rely on intelligence and information flows with the Irish authorities, which work in both directions. It is not an intervention by Border Force, but would be an intervention by other law enforcement communities.

Deidre Brock

Good, I might ask you a question about that later. Mr Sedwill, if the warnings index system, which is classified by the Government as a critical piece of infrastructure, and is fairly elderly as we all know, is suffering two high-priority incidents a week, which it says on page 22 at the end of the first paragraph, is that actually working? If we are looking at 104 potentially serious failures of the system in a year, how can we be confident that that is performing the function it is supposed to?

Mark Sedwill

Again, Charles will be able to answer more of the detail on this. Two high-priority incidents essentially are incidents that are urgent. It does not necessarily mean that they are important or that the system falls over. We have in place measures, if there is an incident of that kind, both to correct it and to ensure the border control is maintained. Charles can add to that.

Sir Charles Montgomery

I genuinely welcome the opportunity to answer this question because there was almost universal misreading in the media when the Report was published of exactly what that meant, so this is an opportunity to put the record straight. This year—the period that the NAO Report covers—the warnings index has been available for 100% of the time. I want to make that point absolutely clear.

Chair

When you say this year, do you mean this calendar year?

Sir Charles Montgomery

Since January this year it has been available 100% of the time. In other words, in the period of time over which those figures were covered in the Report, it has been available 100% of the time. There is a difference between the availability of the warnings index—100%—and high-priority incidents that require urgent remedial action. Those could include, for example, defective control points at airports, which restrict the number of points available for control coming across the border. It could include defective systems in a back office that would slow down the process of, for example, checks against an immigration database. It could include a power outage in Calais that is not within our control, but where we have business continuity contingencies.

Deidre Brock

I am glad to see that there has been an improvement this year.

Louise Bladen

Just to say that footnote 5in the Report is the definition you gave of us of what a high-priority incident is: “A high-priority incident includes situations where a component of the warnings index system is not available (or performing so slowly as to effectively be unavailable) or 30% or more of border control points are unavailable at a port or airport.” That is the definition in the Report.

Deidre Brock

Which really sounds quite serious.

Sir Charles Montgomery

The control point computer screen is considered a component part of the warnings index, but not the core system, which is the system on which the entire system operates, if that helps to clarify.

Deidre Brock

We had 355 individuals prevented from reaching the UK in one year, as mentioned in the Report. That is a bit less than one per day, and really a tiny fraction of the estimated more than 118 million who arrived. Where can we find a breakdown of the reasons why those people were refused permission to travel?

Sir Charles Montgomery

I would have to come back to you with a breakdown of the reasons. In the main, the numbers quoted in the Report will be people who were stopped from boarding aircraft because of exclusion orders and deportation orders. Since the introduction of the authority to carry scheme, we can also use that to offload people with invalid or suspect passports, for example, so there is now an increasing number of people who we will be offloading from any individual fight because we are not happy that they are authorised to travel to the United Kingdom. In some cases, of course, that can then be checked and followed up later. That number is now standing at about 900.

Deidre Brock

How do we get some idea of the financial and economic impact of preventing those people from travelling?

Sir Charles Montgomery

It is really very difficult. I am sure you will understand why—what I would be seeking to prove is a negative. There are some people about whom I can comment quite clearly. If we can stop somebody from arriving who has invalid documentation, that is £14,000 per person[1]. Of course, somebody who is subject to an exclusion order or a deportation order is stopped from travelling because they could genuinely damage national security or our interests. It is almost impossible to find any way by which you can put an individual cost on stopping an individual of that sort.

Deidre Brock

So it is something you have considered. Is it something you might take forward in the future?

Sir Charles Montgomery

It is something we will be taking forward in the future in so far as it can be quantified when we introduce the digital services at the border programme, which will have its own embedded management information capability, which the existing system does not.

Mark Sedwill

This relates to the original business case of e-borders which, as you will recall, my predecessor, David Normington, had to approve because it had a negative net present value. The reason was that a quantification of the national security benefits, which was the primary purpose of the programme, was not possible for precisely the reasons Sir Charles set out. This is just a standard, systemic issue with programmes of this nature.

Deidre Brock

I had a look at the 2013 report on e-borders by the chief inspector of borders and immigration. It stated: “One of the benefits associated with the e-Borders programme related to the refusal of leave to enter to approximately 390 individuals between April and November 2012. However, our findings showed that many immigration alerts were not given to frontline staff, who continued to rely on WI checks, in accordance with the Border Force Operating Mandate.” It also said that Border Force needed to show benefits that can be “clearly shown to be attributable to the e-Borders alert, rather than business as usual processes.” NAO mentions that in its Report as well. What has the Department being doing to facilitate that?

Sir Charles Montgomery

Let’s go to the first point. We issue immigration alerts from the National Border Targeting Centre to the front line.

Deidre Brock

But they choose whether or not to apply the alerts, do they not? That is certainly the impression I got from that report.

Sir Charles Montgomery

There is a discretion in the individual officer’s hands, depending on the level of alert issued. There is a degree of discretion there. You asked whether we have the sort of management information capability to demonstrate the value of the intervention—I think that is what you said—and the answer is that we do not.

Louise Bladen

We have written in the Report at paragraph 4.6 about the latest benefits being predicted, having looked at the current business case for the successor programme.

Deidre Brock

You mentioned the land border with Ireland. Can I ask why, on page 29, only English and Welsh police forces are listed as stakeholders? What input do PSNI and Police Scotland have in the system? What use do they get from the data generated?

Sir Charles Montgomery

Into the existing system or the future system?

Deidre Brock

The existing system.

Sir Charles Montgomery

The police forces are represented in the National Border Targeting Centre—not all of them, of course; in fact, it is a very select and small police cell in there. The police cell in there handles the alerts generated against the police national computer, and it will issue alerts to its people at ports or, indeed, it may well ask Border Force to do so, but the normal route is through the police.

Mark Sedwill

The PNC is a UK-wide capability.

Deidre Brock

So they are stakeholders; that is good. Mr Sedwill, £314 million was the original predicted benefit from e-borders and was part of the basis of the business case. That is in paragraph 2.8, on page 30. That benefit is now thought to be around £47.5 million. Were the original estimates wildly over-optimistic, or is the new estimate too low?

Mark Sedwill

I suspect it is neither. I do not think the new estimate is too low. This goes to the point I made a minute ago about being able to estimate a full financial benefit from the business case. As it says here in 2.8, as you point out, most of those benefits were with other Government Departments, and not all of those benefits were realised, let alone cashable.

Deidre Brock

So, wildly optimistic.

Mark Sedwill

The NAO reached the judgment that the original, the whole programme has not yet demonstrated value for money. As I said, it had a negative net present value in any event. The various components now in the successor programmes because we have that basic platform will go through that VFM test. I do not think I can make a judgment on whether the original business case was optimistic or pessimistic but the data are there in the Report.

Deidre Brock

Well, some of it. Just quickly, Chair—I have two or three quick ones. Paragraph 3.23 states that seven poor reports on the e-borders project from the Major Projects Authority suggests “senior officials in the Department [are not] putting in place governance and leadership that could progress the programme at pace”. How do you respond to that as permanent secretary at the Home Office?

Mark Sedwill

I do not agree with that judgment by the NAO. One point I made in my letter to Amyas when clearing the factual accuracy of the Report was that I felt some of the positive judgments that had been made in successive MPA reviews had not been properly reflected. I did acknowledge that this has been a complex programme and that it has been challenging to put in place the right kind of governance arrangements for this and then for the overall portfolio. Yes, it has been challenging but I would not state it the way it has been in that paragraph.

Sir Charles Montgomery

Can I just build on that a little? First, the way in which the programme and the portfolio have evolved and been led, since the very significant hiatus of two and half years ago—sorry, 18 months—when we reset the programme completely, and reached the stage that in part 4 the Report is much more positive of the current programme, is indicative of how that very difficult process of change was led. My second point is about delivery at pace. It is discordant with the more positive reflection the NAO offers about a much more measured approach that has been taken to delivery of the digital services border programme. I am deliberately not demanding that the SRO delivers that programme at pace. I want a programme that delivers safely, securely and incrementally.

Deidre Brock

I have one last question in view of that very point. Paragraph 4.8 on page 49 of the Report states that there is a risk from the spending review squeezing the capital spend on the programme, without proper thought being given to “how best to tackle the evolving nature of the threat faced at the border”. In your view, is the spending review potentially in danger of leaving the UK’s borders unprotected?

Mark Sedwill

No. To be fair to the NAO, they wrote the Report before the Chancellor’s autumn statement, so at the time the spending review outcome was uncertain and, inevitably therefore, because it is uncertain there are risks associated with it. The Home Office was given, as you will be aware, the police outcome. On borders, our own operations and on the capital, we were given largely the programme that we had put forward and we are now in position to try to implement that.

Deidre Brock

But some of the suggestions are that the staff are carrying a very heavy workload. That comes through in that Report. I think it is mentioned in that Report by the chief inspector of borders immigration. You have a duty of care as employer. How many of your staff could do with a colleague to take some of the burden?

Chair

Sir Charles, this is definitely a Border Force question. Then we are going to move on.

Sir Charles Montgomery

I am very conscious that sitting about three rows behind me is the programme director. The answer is of course that the programme is and has been delivering significantly over the past 18 months. It is a vibrant and genuinely exciting place in which to work and to visit.

Chair

Ms Brock’s question wasn’t about that. Could you just answer the question that is being asked? We will be here all day otherwise.

Sir Charles Montgomery

We have been introducing far better targeting, far better intelligence and far better automation at the borders. Any members of the Committee who have been through our terminals will have understood just how much more automated the border is. In that sense, we have been deliberately easing the load on our front-line staff so that they can spend more of their time making important judgments, rather than being absorbed in transactional activity.

Chair

Which is interesting. We will go back to the cancellation of the contract later, but I think Sir Amyas wants to come in to highlight a factual point.

Sir Amyas Morse

Quickly, on our view of the current progress of the programme, the Department knows well that they have just been in receipt of yet another MPA report giving them an amber/red rating. I think you have achieved that continuously over the past six of I don’t know how many. To suggest that we’re somehow taking a perversely negatively view just doesn’t stack up against the evidence.

Sir Charles Montgomery

I must go back and say that the amber/red rating is one with which I absolutely agree. I am making that absolutely clear.

Mr Bacon

In fairness, it wasn’t you who disagreed with the report. It was Mr Sedwill.

Mark Sedwill

I did not disagree with it in the terms that Sir Amyas has set out. I just said that I didn’t feel that you had given sufficient credit in the Report to the positive comments made in the MPA reviews, including the latest one. That is a different characterisation to the one that you set out.

Chair

Right. I am sure that we can get back to that. I am going to pass to Caroline Flint and then David Mowat and I have some comments to make.

Caroline Flint

I was a Home Office Minister between 2003 and 2005. The series of programmes that we are discussing today are going to cost something like £1 billion, or maybe even more, when we get to the end of all this. At present, it looks like the ambition and the vision will be delivered eight years too late, which in my book represents a waste of taxpayer money in terms of money put in and outcomes. Perhaps I could start by asking Lin why you haven’t replaced the systems that you planned to in the timescale that you originally, in that four years of planning, intended to achieve.

Lin Homer

Let me say to start with that nobody lets a contract expecting or wanting to terminate the prime provider two years later, so we clearly had problems, which I wholly accepted in my discussions with the NAO. I referred the Chair to the report that David Normington had undertaken in December 2009, and I have a view that we always saw strengthening the border as a unified programme. Indeed, Gordon Hextall’s report summarises that quite well, talking about—

Chair

We are talking about the NAO Report.

Lin Homer

It is relevant, because it talks about—

Chair

We are talking about the NAO Report today.

Lin Homer

But I don’t agree with the way in which the NAO—

Caroline Flint

Do you agree that the scheme that was envisaged under your stewardship is now running eight years late?

Lin Homer

No, I don’t. What I was going to try to explain to you is that we set about strengthening the border. It was a set of joined-up projects, the vast majority of which we delivered and delivered securely before the Olympics. Elements of the e-borders programme have not been delivered as fast as we had expected, but very significant elements of it, including checking 97% of non-EU traffic, were delivered by the time I left at the beginning of 2011. I don’t think it is a programme that has failed to deliver. It was a contract that failed.

Caroline Flint

On the advance data, it was meant to be 95% of people travelling to the UK by December 2010, but by September 2015 we’re only hitting 86%.

Lin Homer

Yes. I will say again that if you terminate a contract you have obviously run into problems, and not all the functionality that we wanted and hoped to have before the Olympics was in place before the Olympics. However, that is not the same, I think, as saying that the programme has failed. If you want I could give you the whole list of what we did around strengthening the border during that period.

Chair

We are talking about e-borders particularly.

Lin Homer

Well, but I do not think we thought of it in that way. The published business plan talked about exporting the borders and strengthening the border. That included biometric visas, it included e-gates, it included for the first time ever in this country having a unified and uniformed visible border security.

Caroline Flint

Let me come on to the contract with Raytheon, because I am quite interested that you were involved in four years of planning, and therefore proposals and options about how we needed to deal with the vision of having more comprehensive checks going from a nil starting point—I understand the challenge of that: more checks on those people entering or leaving this country. You may have heard what previous witnesses said, from P&O and British Airways; part of this was not only in terms of the Home Office. There are I think 30 Government bodies that would have a hand in this and 600 carriers involved in terms of linking their systems to the e-borders programmes. Looking back on your time in that planning, before you agreed, if you like, the specification for the contract, is there any learning from that period about how you engaged those stakeholders to ensure that the contract was clear and actually you and your staff were clear about the enormity of the challenge? That seems to be something that has been lacking.

Lin Homer

I think there are always lessons to learn.

Caroline Flint

So what lessons have you learned, then?

Chair

Yes, what do you think we should be taking from it?

Lin Homer

I think the attempt to get all of the carriers on the system before the Olympics, at least as far as non-EU passengers were concerned, was ambitious. I do not believe it was overly ambitious in the context of the Olympics, and I think it did impose pressures on the carriers. I think and hope that what the carriers would say is that there were good times and less good times, and certainly I was personally involved myself in quite a lot of the work with both air carriers and maritime. I think the active decision we took to transfer the risk of managing stakeholders to the contractor didn’t work. However, the business case was thoughtful about that and clearly provided for the Home Office to take back that responsibility if it proved problematic, which is what we did. In the 2009 report that was one of the recommendations that the independent reviewer picked up, and that was implemented before the report was delivered in January. So we did try something. You could say it was bold, but I think we learned quite quickly what to do and I am confident Mark and Charles will have continued to improve that since.

Caroline Flint

At the time of the awarding of the contract in 2007, after four years of planning, there was BT Emblem and there was Raytheon. From what I understand, both bids came in around the same price, but BT Emblem was suggesting that the timescale for implementing the project was five years longer than what was suggested by Raytheon. Did that not, at that point, raise some concerns—with yourself and other Home Office staff—about whether or not you had fully understood what was involved, and maybe make you just pause to reflect on such a wide difference in terms of what they were suggesting they could do within the time scale?

Lin Homer

I have to be honest; I struggle to have a deep personal memory of this, six years on.

Caroline Flint

I am asking you now: if you were presented with two bids, one saying it will take five years longer for the same amount of money than the other one, would that not raise an alarm?

Lin Homer

No; I have refreshed my memory by rereading the business case, and the business case of course went through both our own investment committee and the Home Office committee. It was signed off by Treasury and by the then Office of Government Commerce. It does deal at some length with the two competing bids. I would say that there is far less evidence than I have heard said in Committee—I am afraid I haven’t seen what BT has said—of a kind of refusal to deliver the contract in the same time. What is there is a significantly bigger request for contingency money, which was noted and was taken into account. There is recognition that there is a preference for some phasing to be different, but the core functionality was agreed by both providers to be capable of being provided before the Olympics. And in Gordon’s report, again to refresh your memory, he concludes that the architecture that was being put in place was standard, off-the-shelf architecture, and that it looked fit for what it was designed for and looked capable of being implemented. So I do not think we were being over-ambitious, no.

Chair

Are you saying that there wasn’t this five-year gap? You just said that they both said that they could deliver the core functionality, but that is not what the Report tells us.

Lin Homer

I have not had the benefit of seeing either what Raytheon has said or BT. What I am telling you is that the business case that set out BT’s issues does not say that it does not believe that it can deliver anything—

Chair

The NAO Report says that there is a five-year difference.

Lin Homer

I am afraid that I didn’t agree with the Report. I did share my view—

Caroline Flint

Are you saying that that is factually inaccurate?

Lin Homer

I believe that BT asked for a bigger contingency cushion, and I believe it had a preference for some phasing which was slower, but my reading of the business case as it was presented to us was that both companies were offering to deliver the core functionality. You need to remember that we contracted for the core and, as Mark has said, we then almost immediately asked for extras: OPI—other passenger information—

Chair

We understand that, but at some point there was a discussion with Raytheon—we may need to bring Richard Daniel in here. I do not want to cut across Caroline Flint, but we need to tease this out. Did you go to America to discuss with Raytheon why it could deliver to this timetable compared with what BT said? You personally didn’t, or your SRO.

Lin Homer

No. This went through OGC’s standard procedures at the time. Another thing I strongly disagree with the NAO on is that to suggest that this was commercially unique is just not true. The business case is clear that it was standard OGC operating. We had four bidders and then we went down to two. We had detailed negotiations with both, we evaluated both and we met both face to face. The bulk of the conversation with the final two consortia was to assure ourselves that they planned and intended to work as a consortium. It was not a major matter of difference to us that BT was suggesting that delivery before the Olympics was impossible.

Chair

We need to get Louise Bladen in from the NAO.

Louise Bladen

We clearly did have a difference of opinion on the commercial issues and what was known at the time. So, on 2007, the OGC guidance, we could not track down what guidance was there at the time simply because OGC has been through so many iterations that that stuff was not publicly available any more. What we could not find, crucially, in the business case from November 2007 was exactly how that was compliant with OGC. We recognise that it was consistent with other things in government at the time, but we could not pin down that guidance to see if it was consistent. What we did try to do was to go back and just understand what was broadly known at that sort of time. And if you go back to, for example, 2003 Treasury guidance on PFI in IT—I know it is not the same, but it is broadly a comparable thing that you might look at—by then the Treasury was very clear that you shouldn’t be doing IT in PFI. There are other projects that the NAO commented on prior to 2007 where we pointed out some of those risks. So, we are not saying that OGC guidance was necessarily the only thing around at the time. Other things were known, and I think we thought that should have been a pause for reflection about whether this was the right type of contract.

Lin Homer

That is a slightly different issue—

Chair

Before I go back to Caroline Flint, at the point of award of contract, just as you were finalising it, what discussions did you have with Raytheon about making sure that it could meet the deadlines that you had set? Do you remember any conversations about that and what the content was?

Lin Homer

The bulk of the evaluation is done by commercial teams and is—

Chair

You were the SRO. Remind me of the chronology.

Lin Homer

I was not the SRO; I was chief executive of the agency.

Chair

Okay. Who was the SRO at the point of award of contract? Remind us.

Lin Homer

Brodie Clark, but neither Brodie nor I were involved in making detailed evaluation. It is not good practice for the seniors of organisations to think that they know everything.

Chair

We just need to be clear. It was a long time ago.

Lin Homer

There was a thorough evaluation through our commercial team in an anonymised process. So, as a senior, until the point of recommendation for award, neither I nor Brodie nor Ministers will have known which bidder was ahead. We then go through a process of best and final offers when the contractors are known. During that procedure, both consortia were eyeballed, if you like, and the major concern—in both cases we were looking at complex consortia—was to make sure that they looked as if they had the right kind of people in the consortia. Both had very experienced, largely British-based subs. We were making sure that they appeared, on the face of it, to know what they were getting into. I was satisfied that they did. I was wrong about that.

Caroline Flint

Paragraph 2.7 on page 28 of the NAO Report states: “Senior officials told us that they had understood that the programme was ambitious. They also cited efforts to reduce the scope of the programme before the contract was awarded. But it does not appear that they had fully appreciated the multiple challenges and risks inherent in such a broad programme spanning different travel industries and with so many diverse carriers and government bodies with varied systems”. Is that a fair summary of how things were at the time of the awarding of the contract?

Lin Homer

It is not, I don’t think. I do not know who made that comment. I think we were well aware that we were undertaking a very ambitious programme. I do not think that we regarded it then—I do not myself regard it now—as over-ambitious. I think it had failures of delivery subsequently, but I believe that those were not necessarily going to happen. The independent report in 2009 suggested two reasons why we hit problems, which I think I would accept—

Chair

We are talking about the NAO Report now and have to focus on it. We have not necessarily seen all the other reports.

Lin Homer

But it is contemporaneous with the problems. It was done by experts and it suggested, first, that financial pressures were on the climb, which I think we did see, not least because they had bid aggressively—in those days we did not think that was a wicked thing, if we had companies big enough to cover the risk, but they had not backed that risk themselves. Secondly, we got off to a slow start—

Chair

There was an eight-month delay in winning the contract. We know that.

Lin Homer

But I think those two things, in the view of the reviewer, made it almost impossible for—

Caroline Flint

In the awarding of the contract, you have already said to the Committee that other people were more involved in the technical and detailed aspects of how the specifications should be put together. Will you tell me what your role was in the sign-off of the specification that then went to tender?

Lin Homer

I was then the chief executive of the agency, so the programme was largely resting on my budget. Although a significantly shared project in terms of the beneficiaries, the Border Agency was the only funder, if you like, so the programme went through my own investment committee checks. It went through the Home Office investment committee, it went through Treasury approval and it went through OGC checks. I think the three checks in what was then the—

Caroline Flint

Do you think the checks failed, given what happened later on when the contract was terminated? Do you think that those checks were robust enough?

Lin Homer

Interestingly, the three were all amber—

Caroline Flint

We can tick-box, but—

Lin Homer

I think that when you let contracts, sometimes they do not work. To be honest, if we never terminated a contract, you would have us sitting in front of you being asked, “Why do you never terminate a contract?” We tried something big and bold, and I think a lot of it worked. When we saw that we had problems, we tried to overcome them—by the way, when I say “we”, I mean ourselves and Raytheon. I think we both tried to overcome those problems. We reached a point where we had failed to come to an agreement about how to take that forward and, at that point, after very careful consideration, the Home Office decided—

Chair

You are repeating points that we have heard and taken on board. May I ask two questions before I hand back to Caroline? Was your advice as an official to the Home Secretary to cancel this contract?

Lin Homer

I was responsible for gathering the advice of all the senior Home Office officials.

Chair

Yes or no. I do not normally ask yes or no questions, but—

Lin Homer

It is on the record that my advice was not to terminate it, but to reset. There was a strong view—

Chair

That’s fine. Will you tell me whether any legal advice was sought about terminating the contract? What did it say?

Lin Homer

Yes, and I was also responsible for that. It was that we had grounds to terminate.

Chair

So the legal advice was that you had grounds to terminate and your official advice was not to. That’s fine.

Caroline Flint

Since we are into the contract rules under the specification, maybe I could go to Mr Daniel. In terms of winning the contract, did you feel there were elements of the planning in this process you maybe took for granted that were not already there?

Richard Daniel

Looking through the process and hearing some of the evidence from the carriers was helpful in putting some context around this. Obviously, I was not actually directly involved. It was a firm fixed-price contract and it was a competitive tender. We provided the solution––offered a solution to the Home Office and subsequently negotiated the contract. I have the benefit of having a fresh pair of eyes looking at this to see some of the comments made by the carriers––that it felt like they had gone back two years in terms of the interfaces that we are talking about. They were instantiated in the contract, so we were effectively just trying to implement the contract that we had signed up to. There were challenges put into the start of the programme and it was late coming on contract––later than we had all anticipated. As a consequence, that put some pressure on. There was a desire to keep the ministerial commitments in place, as you would reasonably expect. The first two of those we have met, as we know. There were some pressures there. The stakeholder management aspect associated with it that the carriers were referring to was a crucial part of why there was complexity, particularly around the second phase of the development. That caused some of the delays that we were experiencing. But it was a firm-price contract and we had a good strong team.

Chair

You say you had a good strong team, but you actually had to have a major public recruitment drive after you had got the contract.

Richard Daniel

We always expected to have to recruit some people, but we also expected to reach back into the US, where they have got expertise. The US have worked with Accenture on US visit programmes, so they have some experience there; it was actually the opposite way round––Accenture were the prime, and we were working for them. We assembled a team that included Accenture, Detica, Steria and QinetiQ––people that were strong in this field. We felt that we had built a strong team around us. On the staffing point, recognising that the contract was let in November, by the end of 2007 all the leadership roles were in place and about 83% of the staffing was where it needed to be. We did have some difficulties with changes to the security aspects letter, which meant that at the end of December, when the security aspects letter changed, we had to take 50 people instantly off the programme because they suddenly changed the clearance requirements for the programme. We got ourselves into a backlog on clearance. That did not help, but what we were doing to try to compensate for that was to reach back into our US organisation, and bring people who already had security clearances that we could then transfer over. That was a much more efficient way of getting through it.