Set-up of EHRC was ‘flawed and inefficient’

The Equality and Human Rights Commission (EHRC) was “not ready for business” and should have delayed its launch in 2007 because of a “flawed and inefficient set-up process”, according to a report by a committee of MPs.

The public accounts committee report says only 10 of 25 directors were appointed by the time the EHRC launched in October 2007, the management team “lacked the right balance of skills”, and its business plan had not been finalised.

And the report criticises EHRC chair Trevor Phillips for failing to ensure his board reviewed and scrutinised progress in setting up the commission more closely.

The committee also said they were “surprised and concerned” that it cost nearly £39 million to set up the commission.

Their report – which follows similar criticisms by the National Audit Office (NAO) last year – says the government made “serious errors” in setting up the commission, with the EHRC having no control over which staff left the Disability Rights Commission and the two other “legacy” commissions.

This early exit scheme, which cost about £11 million, led to a large loss of staff with valuable skills and left the EHRC 140 people short and with “skills gaps in key areas”.

The EHRC then took on seven former staff from the Commission for Racial Equality (CRE) as consultants, even though they had taken compensation under this scheme.

They were paid £630,000 for their CRE severance packages and nearly £340,000 to be rehired as EHRC consultants – at up to £822 per day – without the necessary approval from the Treasury.

The committee said Phillips recognised his “personal share of responsibility” and that the board “did not exercise the level of scrutiny it might have done”, despite “clearly visible” early warning signs.

Edward Leigh MP, the Conservative chairman of the committee, said there were still “weaknesses” in the EHRC’s control over staff costs and that this was “not the way this committee expects public bodies to be run”.

An EHRC spokeswoman said the committee and the NAO had acknowledged the “extreme pressures” it was under to launch on 1 October, 2007.

She said: “Under these circumstances, the commission made mistakes – for example not making an adequate case for re-engaging several former members of staff.

“We have accepted these criticisms from the PAC and – as the NAO has recognised – we are taking steps to improve our financial and performance reporting, and strengthen our governance arrangements and other control systems.”

4 March 2010