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Public Accounts

I apologise for the delay in getting to my feet, Mr. Deputy Speaker; I was halfway through writing the speech that I shall now deliver. The Public Accounts Committee is quite definitely the queen of Committees, from any point of view. Its work is centrally important and it does a vital job. From my brief experience as a member of the Committee, I think that it is doing that job very well and very effectively. I congratulate our Chairman on the guidance that he gives to the Committee and on the points that he has raised today, all of which are crucial. The Committee's work is a bit like the old American series about the cop called Friday: day and night, a dedicated body of men carry on a relentless fight against wasteful spending. It is a fight that has its ups and downs, but now that I have been on the Committee a little longer it is possible to discern common patterns in many of the problems that we face. Each report is exciting and seeing that it is implemented is important and interesting. A common pattern emerges from the bunch of reports that we are dealing with today and from our work over the years. It is useful to discuss that. One thing that emerges, for instance, is the constant desire of this Government—and of most Governments in the populist climate in which we operate, where every Government want to show that they are in command of the problems, that they are dealing with the problems as they arise and that they are responding to public pressures—to change and to pull everything up by the roots and put it back again in a different order. That constant pressure to change causes many of the problems, because administration, proper financial controls and efficiency need a settled routine. Instead, we constantly change things. The Jobcentre Plus change commented on by my hon. Friend the Member for Glasgow, South-West (Mr. Davidson), which was implemented by people who knew the business, who had grown up in the department and who had the skill to do it, has been very successful. Other changes have been a good deal less successful. While we are chopping and changing, the constantly grinding Gershon process of efficiency savings is working away in the Departments producing other changes. Those changes are often counter-productive. We saw in the Rural Payments Agency the consequences of the Gershon efficiency savings. The agency had shed staff who were to prove vital when it came to dealing with the rural payments, which was a big change on a huge scale with which the agency was not capable of dealing. It had to bring back the staff who had been got rid of because of the efficiency changes. We are seeing that problem now in the Valuation Office Agency with the argument about the business rates for port businesses. The VOA, which has been shedding staff due to the grinding away of efficiency savings, is effectively understaffed and did not carry through the necessary assessments of individual port businesses in 2005. Port businesses have been getting bills in 2008 and 2009 requesting back-payments going back to 2005, which they cannot pay. The Committee does not consider the constant process of economies, cuts and staff reductions produced by the Gershon efficiency savings. We should consider it as an overall subject. We should consider not just the burdens of change that Governments introduce so regularly but the effects that the grinding down of numbers has on the efficiency of the Departments. There are spectacular examples, such as the RPA and the VOA. Indeed, in Jobcentre Plus there were plans to shed large numbers of staff later this year, but at a time when the recession is producing far more work in Jobcentre Plus, more staff now have to be hired. The constant process of pushing staff numbers down and then responding to emergencies by bringing people back is a very unsatisfactory method of proceeding. The Committee could consider the process as a whole, and it is a common pattern that we need to investigate. The constant changes lead to gross inefficiency and they are not based on any reliable estimate of the costs. For example, the 14-to-19 education and qualification changes that were examined in one of the reports have been launched into with no assessment of the costs. Local providers have been left to devise their own systems, sometimes in consultation with the industries concerned about what the qualifications should be and sometimes without consultation. Each provider is going down its own path with no overall estimate of the costs of the change and of what should be done financially to make it work effectively. A substantial change has been rushed into without adequate assessment and without the provision of funds. We have produced a report on the Department for Environment, Food and Rural Affairs. Functions and agencies have been handed to DEFRA, but it has not been provided with the proper management ability, particularly when it comes to financial management. As the hon. Member for Gainsborough (Mr. Leigh) said, there is a dearth of financial experience and expertise in many of the Departments. The Treasury is trying to control things from outside, but it is the internal financial controls that are so important. In DEFRA, those controls have clearly been inadequate. It has been given extra agencies and functions and has faced crises that have led to increased spending, particularly those produced by emergencies such as flooding and by the rural payments fiasco. Those crises have resulted in haphazard economies and attempts to grapple with the situation without proper effective financial controls or financial expertise in the Department. Departmental change has to be backed by proper financial management, but we are not providing that. The second common pattern that I want to emphasise—unfortunately there is not much scope for doing so in the reports that we are dealing with today—is the obsession with employing consultants. We employ them for every problem that comes up, and the resulting bill is enormous. Overall, it amounts to £70 billion or more, but the assumption is that the necessary expertise is no longer available in the civil service. Matters that could and should be decided by advice from within the Departments concerned, and by proper planning by them, are now decided by consultants. The normal practice of consultants is to tell us what we want to hear. They wrap it up with statistics and managerial formulae, but they do not offer value for money. That is another common pattern that the Committee should keep an eye on.