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Public Accounts

This has been an interesting and useful debate, and I congratulate all hon. Members who have taken part. Through my hon. Friend the Member for Gainsborough (Mr. Leigh), the Chairman of the Public Accounts Committee, I would like to congratulate the Committee on its valuable work. Increasingly, an important part of the scrutiny function of this House falls on the shoulders of the Committee, and it discharges that role extremely well. It will become a more significant role in the future as the effective and efficient delivery of public services moves to the centre stage of the political debate. The reports of my hon. Friend's Committee are essential reading for anyone aspiring to Government and who recognises that delivery is the key measure by which this Government and future Governments are judged by the electorate. The Committee has been instrumental in identifying billions of pounds of waste and inefficiency: £6 billion of tax credits overpaid because of complexity built into the system, with £500 million already written off and another £1.4 billion likely to be uncollectible; £500 million relating to the CSA project; £500 million wasted on the misuse of consultants; and as my hon. Friend made clear earlier, the Committee's eye is very much focused on the £9 billion Olympic budget, and the potential issues that may emerge there. My hon. Friend referred to the salutary effect that the prospect of appearing before the Committee can have on civil servants. I know from talking to civil servants in various Departments over the years that he is absolutely right. How often have any of us in conversation with a civil servant—at all sorts of levels—heard a reference to the possibility of having to appear before the PAC to account for something as a significant influence on the way that they conduct themselves? I hope that my hon. Friend and his Committee carry on holding civil servants and Ministers to account through that process. Perhaps we could consider for a moment the context within which the debate takes place. My hon. Friend referred to the comprehensive spending review, which delivers a significantly tighter settlement for the funding of public services than most Departments have enjoyed for a number of years. That throws into focus the agenda of safeguarding public services in this environment, and as my hon. Friend said, it means that everyone has to raise their game to ensure that we can continue to enjoy high quality public services in the face of tough spending limits. My hon. Friend did not actually refer to the CSR settlement as sharing the proceeds of growth, but that is exactly what it is. It comes at a time when there is an increasing awareness on all sides of the political debate that the public want increasing quantities of ever higher quality public services, but they also want tax, over time, to take a smaller proportion of our gross domestic product. That challenge goes right to the heart of the Committee's essential role in ensuring value for money and the best possible efficiency in delivering public services. However, there is another aspect to the debate to which my hon. Friend did not refer, but he could have done. As we live in an increasingly globalising economy, the need to maintain our international competitiveness will increasingly constrain the ability of Governments to go on raising an ever higher share of GDP in tax, even if they wish to, to fund public services. We have to address the desire for ever higher quality public services through the improvement of efficiency and better outcomes, rather than simply increasing the volume of inputs. In a situation where 40 per cent. of our GDP consists of publicly delivered services, falling public sector productivity drags down the overall performance of our economy and thus our international competitiveness. The challenge will be to deliver ever more with a given level of resource—something that may sound challenging, but the private sector has had to do it for years simply to survive, while delivering ever higher quality products and services at ever more competitive prices. This agenda puts a particular focus on the efficiency savings programme in Government. My hon. Friend rightly referred to the Committee's report on the shortcomings of the efficiency programme, in which the Committee identified bogus efficiency savings. The apparent efficiency was delivered only at the cost of a decrease in the quality of service—a reduction in inputs but a corresponding reduction in outputs—or, even worse, supposed efficiency was delivered only by not counting an additional input cost somewhere else. We welcome the possible role for the National Audit Office in reviewing Gershon savings on a Department-by-Department basis. It is clear from the Public Accounts Committee report that greater transparency in the Gershon process and independent audit of its results are needed. One or two overarching themes emerge both from the Committee's report and hon. Members' comments in this evening's debate. The key theme that struck me is capacity—whether the system has the capacity to deliver the complex, top-down solutions that Ministers prescribe from a political perspective. The impression that one gets from the debate is of a system that is overloaded with initiatives, which are increasingly complex and often require huge IT projects to enable their delivery. One also gets the impression that those who might say to their political masters, ““This is not do-able; the system doesn't have the capacity; you're asking for too much, too quickly”” are culturally inclined not to make such statements. I cannot say whether that reflects career judgments by individual civil servants or a deeper cultural malaise. There is also perhaps a bias towards always assuming the most favourable rather than the most likely outcome when planning ahead. That has led to a series of outright failures, some of which have been mentioned tonight, and a further series of on-going projects, which cannot be described as outright failures but suffer serious continuing problems, which, in many cases, look suspiciously like systemic problems that need resolving. I was encouraged by references by my hon. Friend the Member for Gainsborough to some successful projects that the Committee had identified. It is vital that the Committee looks for the good as well as the bad and then focuses on the challenge of disseminating best practice across Government, and acquiring and disseminating best practice from the private sector. From my hon. Friend's comments and the balance in his speech between the good projects and those that have not been so successful, we might conclude that a pretty big challenge remains to ensure that lessons from successful projects are learned and disseminated effectively. Several hon. Members referred to the tension between what might be termed the delivery and the policy-making parts of Government. In an interesting exchange about the development of civil servants' careers, a suspicion arose that the policy-making part of Government continues to be perceived as the superior branch. Several hon. Members mentioned difficulties with leadership and accountability and the way in which sometimes nobody appears to be in charge of a project. I understand that the permanent secretary in the Department for Work and Pensions could not tell the Committee who was in charge of the CSA computer project. That echoes a comment that the Governor of the Bank of England made to the Treasury Committee a couple of weeks ago. When asked who was in charge at the time of Northern Rock, he asked whether Committee members would care to define what they meant by ““in charge””. Again, that is symptomatic of a cultural problem. Reference was made to the tendency to move civil servants around before projects were completed. That, again, is a facet of a culture whereby generalism is encouraged and regarded as vital to career development. I do not know whether my hon. Friend the Member for Gainsborough agrees, but there is a case for saying that, although the development of individuals' careers and the human resources policy of Departments are important, the overriding function of the delivery part of the civil service at senior level is safeguarding the public purse and the quality of outcomes for service consumers. There is a case for saying that the needs of career development must be subordinate to those of effective product delivery. I hope that the Committee will continue to press for that cultural shift in Government thinking.