RT HON LORD GOLDSMITH QC, RT HON HARRIET HARMAN QC MP AND ANDY BURNHAM MP

23 NOVEMBER 2005

  Q20  Dr Turner: That is entirely reasonable, but the short period of judgment on the company's performance is less than reasonable. In fact, it is completely unrealistic. Any judgment taken after so short a time would clearly be rather arbitrary. So, first of all, can you undertake to give the GovCo a reasonable time, of at least two years, to establish its commercial viability before considering further action? Two years from vesting, not from now.

  Andy Burnham: I think that I will have to disappoint you and say that I am not this morning going to say that December 2007 will be the date by which GovCo will be judged. What I think I can say to you this morning, Des, is that the whole of next year is a year where a decision will not be taken; so the service can plan with certainty that—

  Q21  Dr Turner: One year?

  Andy Burnham: The whole of next year. That will be the time in which the service has time to become established and operate according to its new freedoms that GovCo will give it. That does not then mean that it is inevitable that there will be a decision following hard on the heels of that. The point being this: that I do not think we ought to be bound by a rigid timeframe. There are, as you know, changes happening in the forensic science market. In recent months there has been the merger of the two other players in the market. So there are changes happening within the forensic science market. I think that it is proper to give a clear time by which no decision will be taken, but then not necessarily tie the hands of whoever at the Home Office, or the Minister, if it happens to be me or whoever, to make a decision at a particular point in time.

  Q22  Chairman: Andy, I feel that we are starting to go round the houses with this, and Des needs to come in again on another issue. You mentioned the issue of pensions earlier. Can you give a categoric assurance before this Committee today that the pay and conditions and the pension rights of the current staff of FSS will be protected through GovCo and indeed, looking forward, if in fact you go to a PPP? Can you make that categoric assurance?

  Andy Burnham: I can.

  Q23  Chairman: You can?

  Andy Burnham: I am happy to do that, Chairman. One of the reasons that there had been some delay—and I want to be clear with the Committee about this—is that there were questions that had been raised about the staff pension scheme, and whether, in moving to GovCo, it was fully funded according to Treasury rules. An issue had emerged about a potential—in many ways I would say a theoretical rather than an actual deficit—so the scheme would be operating potentially, theoretically, in deficit at the outset. Obviously we did not want that situation to arise, so the Home Office has made arrangements with the FSS to ensure that there is no deficit in the pension scheme, and that the pension scheme starts from day one as a fully funded scheme. Can I just say that it is of course a matter of choice as to whether staff choose to transfer their pension from the principal Civil Service scheme into the new scheme.

  Chairman: We just wanted to make sure that there was going to be no lessening in the terms and conditions of the pension arrangements. You have given us that assurance, and you could not have been clearer. Can we now move on to the forensic sciences—

  Dr Turner: With respect, this was the entire nub of the report.

  Chairman: Could you be brief?

  Q24  Dr Turner: Could you give us an assurance about the transparency of the arrangements that will be put in place for judging the performance of the GovCo? Can you tell me, from your own commercial experience or that of the Home Office, what you think would be a reasonable timeframe in which to judge the performance of a commercial enterprise?

  Andy Burnham: I will come to that question, but perhaps I can finish off on the pension question before I leave that.

  Q25  Chairman: Would you like to chair the Committee as well?

  Andy Burnham: What I think I am saying on the pension scheme is that I do not believe it is possible to say that the new scheme is comparable in every regard to the principal Civil Service scheme that people are currently members of. What I am saying, for absolute clarity, is that people have the choice about whether or not they choose to join the new scheme. When they have made that choice to join the new scheme, then those rights, as members of that new scheme, will be fully protected through any further—if there are to be any further changes to the—

  Q26  Chairman: That is not what you said to my question. That is a different answer.

  Andy Burnham: I think that the way the question was phrased was not entirely clear. That is why I am coming back, just to be absolutely clear with you. The two schemes are obviously not directly comparable; they are different. People have the choice about whether they move from the principal Civil Service scheme to the new GovCo scheme. I do not want to be in any way saying that they are absolutely, directly comparable. What I am saying is that people, if they make the choice to switch, from then on their pension rights will be fully protected through any further change. Perhaps I can now pick up Des's question.

  Q27  Chairman: Can you try to do that as quickly as you can, Andy, because I am anxious to move on?

  Andy Burnham: I will do it quickly. You could probably write my commercial experience on—I am looking for something—a Post-It note. Even that would be too big, I would guess! To be honest, I do not have vast commercial experience. What I do have experience of though is the public sector, and I want to be sure that in taking forward any changes there is, as you say, full transparency. It is not just the FSS as a business going forward that we are looking at here; it is the criminal justice system as a whole; it is the role of forensic science within that system; it is the quality of service delivered to our police forces. It is that broad picture on which any future move should be judged. The business element is an important part of it, but it is absolutely right to be—and this is why it is right that the Home Office should do it—looking at the broad picture in which the FSS operates. I want to be clear with you that I want to publish some criteria in the New Year which would judge any further move. That will be available to the Committee and everybody would have some clarity about what the yardsticks were for any future changes.

  Q28  Dr Turner: The Government in their response also promised a strategic analysis of the forensic science market. Has this been carried out? What has emerged? Was there any public consultation involved, and can we expect a final report?

  Andy Burnham: With regard to the work on GovCo, there has been some work being carried out regarding how the market is changing. I am not in a position to say to you today exactly what form that will take and whether or not it will be published. I will have to come back to you on that point.

  Q29  Dr Turner: One of our other recommendations was the establishment of a Forensic Science Service Advisory Council. In the absence of such a body, how will you ensure that the criminal justice system has continued access to independent and impartial advice?

  Andy Burnham: You say "in the absence of such a body". That is one area where I can possibly come with some good news to the Committee. The broad thrust of the recommendation that was made and the proposal for better regulation of the forensic science market is one that I accept. Since the Committee's report was published, there has been some discussion within the Home Office. I know that the Committee proposed a council structure. We are looking at different alternatives, to see whether something else would do the job. We have been consulting at the moment internally with stakeholders. The proposal is, in the New Year, to put forward some options for the future regulation of the forensic science market, on which we will then consult further. In broad terms, however, we accept the recommendation that, going forward now, it is important that there is some independent and impartial regulation, oversight.

  Q30  Chairman: What is the timescale you are talking about, in response to Des?

  Andy Burnham: The timescale?

  Q31  Chairman: Yes. You could have set up a Forensic Advisory Council virtually straightaway. It was a firm recommendation from the Committee. So what is your timescale?

  Andy Burnham: We could have done, Chairman, but we are taking time to get the structure right. The Home Office obviously have other bodies performing similar functions in related areas. The issue was, is a council the best way to organise this or is it better to have a single, named regulator?

  Q32  Chairman: When will you have a response? When will your response be?

  Andy Burnham: Directly, we will publish some proposals in January for further consultation, but that will be an open consultation exercise rather than some of the more internal work that has been going on to this point. That will happen in January. As I say, we accept the broad thrust of what the Committee have said.

  Q33  Dr Turner: What are the implications of the merger of the other two players in the British forensic science market? Will that enhance the competition that you are seeking?

  Andy Burnham: It is interesting, I think. We need to watch exactly how things change. The difference—and I think there is now a big difference—is that there may be two big players now rather than one big one and two medium-sized players. The difference about the merged organisations is that they can offer an end-to-end service; they can offer the full service, in the same way that the FSS can. So it is possible that that will sharpen competition within the market. Of course, there are other pressures that may develop with regard to ACPO. You will be aware of ACPO's work in this area and the move towards contracting toolkits for forces to use. That will be a further pressure. I think that it will be interesting to watch how that changes competition within the market. That will be one of the things that we will be watching and looking at next year.

  Q34  Mr Newmark: Having another big player against another two big players does create a sense of competition, but it also has duopolistic implications, in that it prevents further competition coming in, because of the cost base or the cost of entry into the market. Do you see that as a bad thing or a good thing? I admit that competition is good, with having one bigger player against another bigger player, but do you think that there should be room for other people to come into the market, or do you think that having two players is enough to keep that competitive tension?

  Andy Burnham: I do think that there should be room for others to come into the market. If you look at how this market has change from the early 1990s, it has changed considerably—and improved considerably. I think that some of the innovation you are seeing in the forensic science market at the moment is partly the result of the move to a more competitive environment. So I do not shy away from that at all. I think that it would be a good thing if other entrants were able to join the market. It is obviously a market that needs careful watching, because there is a huge public interest vested in having ready access to high-quality forensic science services. That makes it quite an important market; but I do not for a second believe that cannot be achieved without more competition and more entrants into the market.

  Q35  Chairman: Including foreign competition? European? American?

  Andy Burnham: The point for me would be the quality of what is provided. That would be the deciding and determining factor: the quality and the speed of what can be provided to police forces. I think that in this regard, rather than dictate from the Home Office, it is up to police forces to see what their needs are and for them to procure intelligently from the suppliers that are out there.

  Q36  Dr Turner: You do not see any security implications for foreign entrants into the market?

  Andy Burnham: There may be, but I do not believe that would necessarily be something that could or should stop that process. Equally, I think the FSS could look to expand to other markets too. I would not rule it out. Obviously the circumstances in which it happens would need to be watched, but I would not say it rules it out.

  Q37  Dr Turner: How much scope do you really think there is for the expansion of the forensic science market in England and Wales, given that there is a trend to producing kits that the police can actually use themselves? You could actually find a diminution of the work available to FSS and the other players in the domestic market.

  Andy Burnham: I think it is interesting and there is a lot of change now. As you probably know, the FSS itself has developed a series of rapid response vehicles that are able to go to a scene of crime very quickly. I think that all of these developments are welcome. Yes, you could say that in the future people are able to do on-the-spot stuff more readily, and that would affect volumes. Equally, however, if you look at the role which the DNA database is playing with regard to the detection of crime, it is a very changed picture, even since a couple of years ago. The DNA Expansion Programme, I would argue, has been a huge success in changing this field quite considerably. Obviously it is a programme that is coming to the end of its initial phase and, in the New Year, we will be publishing some of the main figures that have come out of that.

  Q38  Chairman: We will return to that later on. Finally on this issue, if in fact we are to have more police forces armed with, if you like, mini-labs or micro-labs which they will take with them to scenes of crime, and therefore will be doing more forensic science themselves, will we not have a diminishing market, and therefore the idea of having major competition actually goes contrary to that?

  Andy Burnham: I think this is the same point that Dr  Turner was just raising. Yes, the market could change. There is innovation that is happening now and the picture can change and is changing. That relates to one of my earlier replies, when I said how there is probably not the need at this particular time to be bound into rigid timeframes about how and when further decisions are made. I think that it is a very changing picture. Interestingly, sitting here today, the forensic science market—as I am sure you would agree, Chairman—is very different from what it looked like in December 2004.

  Q39  Chairman: Could I ask you for a yes or no to this question? We have now seen the LGC and the Forensic Alliance come together. If the GovCo becomes a PPP, can you see them all becoming one single company, and would the Government allow that? Yes or no?

  Andy Burnham: It would be hard to be forced to a yes or no. As I have just said to Mr Newmark, we welcome the competition—