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Public Accounts

One of the most worthwhile things that I do in the House of Commons is serve on the Public Accounts Committee. It is a pleasure, and the comments from hon. Members on both sides of the House today show that we are a very well adjusted group. I shall comment briefly on two points that I picked out from the speech made by the hon. Member for Great Grimsby (Mr. Mitchell). He mentioned tax havens, which I anecdotally mentioned in a Statutory Instrument Committee, where I did not think that anyone was paying any attention whatsoever. I mentioned the Isle of Man. Within a few days of doing so, a delegation from the Isle of Man arrived, desperate to see me to explain that it was not really a tax haven after all and that it is largely dependent on fishing mackerel and the like. On the PFI point, one of my early experiences as a Member of Parliament was voting at a Liberal Democrat party conference against our public service policy, which was then known as the Huhne commission, on the grounds that it gave too much succour to the PFI. That move did me absolutely no good in terms of my promotion prospects in the party, but none the less there is a virtue in being right. Yesterday, I was involved in a debate where the Financial Secretary to the Treasury defended tax office closures, which is a tough call. I have got a lot of time for the Financial Secretary; he is a rational, reasonable person, who always responds to the points made and never makes forensic, rhetorical or unnecessary points. He made one very good point in the context of this debate. He said that, in a time of recession, when the call goes out for fiscal stimulus and big public spending, it is more important than ever to get value for money for public expenditure, and he is dead right on that point. The Government should see the Public Accounts Committee not as an occasional irritant, but as a useful ally, particularly in the eternal quest to get public money spent effectively. That can be done. It is not necessarily the case that the private citizen spends money effectively, as hon. Members will find out if they study any shopper—my wife or whoever—nor is it necessarily the case that the public servant spends money profligately. However, it is the case that public servant lacks some of the incentives that a private citizen has to husband resources. Perhaps that is where a theme comes into the PAC. We have all picked out that no one seems to suffer, particularly when money is spent unwisely or when there is simply a bad project. A classic example is the Chinook case, which has been aired time and again, but it is self-evident that no one has fundamentally taken the blame—people have moved up; people have moved on. In many environments, not necessarily with that project, people seem to acquire bonuses irrespective of their actual performance or efficiency. In other words, there seem in Whitehall to be few disincentives for poor performance. That is our concern. Incidentally, there are not simply few disincentives; there are many expensively acquired alibis for poor performance—they are called consultants. Now, as hon. Members have said previously, there is nothing wrong per se with consultants, always provided—this is not always so—that they are unconnected with the suppliers that they recommend. There is a lingering anxiety throughout many of our deliberations about the lack of client-side expertise. Recently, we had a session in which we talked about Building Schools for the Future—a massive Government programme—and I inquired about how many people who run that project have any construction experience. I was informed that the bulk of them are lawyers and that very few of them have pertinent experience in construction. I should have thought that Building Schools for the Future would naturally be a magnet for people with some kind of construction experience. However, I am genuinely far from believing that public servants do not want to get things right, and far from believing that they do not get satisfaction from getting things right. There are people whose services we are very fortunate to have, and whose efforts we should applaud; we have mentioned some such instances in this debate. What has eluded not just this Government, but many Governments, is the secret of encouraging optimum performance in public service. There is quite a good example in our report on NHS general practitioner contracts. Most people recognise that most GPs do a reasonably good job, but they also recognise that there is scope for progress. The Government and the Department of Health wanted GPs to work harder, more effectively and, in particular, proactively, so that we had a national health service that promoted health, and not a national sickness service that dealt with the problems when people suffered from ill-health. On the face of it, the method that the Department pursued did not seem wrong. In GP practices, good behaviours were incentivised under the quality and outcome frameworks. GPs were relieved of some of their load—out-of-hours work was taken off them—but the result of that plan was far from satisfactory. There was a huge cash bonanza for practice doctors, but not, sadly, for the doctors employed by the practice or for nurse practitioners. That was slightly depressing; in a sense, one would expect doctors to reward those who had helped them to get the marks, the rewards and the funds. There has been a boost to preventive medicine, and I do not dismiss that altogether. Clearly, there are certain effects that we are yet to see—there may be benefits to people having their blood pressure taken more regularly and the like. Unquestionably, though, one result of the changes was a rickety out-of-hours service. In sum, the quality and outcomes frameworks that the regime imposed on the doctors undoubtedly got things done that needed to be done, but to be absolutely frank, they also got things done that were simply rewarded. The Government were genuinely surprised by the volume of things that were rewarded that were done, and by the cost of that. When they got the bill, it took them aback. What we are proving, I guess, is that micro-management has good and bad effects. One could say, "Well, what would be the alternative? Should the Government just let things go on as per usual?" Incidentally, I recently discussed with a panel of British Medical Association people what alternative they would have put in place. What they said is quite salutary and worth taking on board. They said that it is healthy to assume a degree of professional pride rather than venal self-interest. If we assume one or the other, we are likely to get it. If we assume that professionals will behave venally, after a while they will be insulted by how they are treated, and they will behave differently as a result. The people from the BMA said, and I agree with them, that professionals are not opposed to benchmarking, transparency or peer comparison; all those things work as incentives for good, professional practice and are probably sufficient in themselves, without duress. Professionalism is not to be equated with self-interest or an absence of self-improvement, and it is certainly not to be identified with that phrase, "the producer class." On the out-of-hours service, which we also looked at in our report, a different route was taken. GPs have been replaced by businesses, or the curiously named social enterprises, which are supposed to be slightly better than businesses, although I have never seen an adequate definition of a social enterprise. I refer to companies such as Serco, which is probably better known for running trains than for running aspects of the health service. Those businesses are commissioned by primary care trusts. In other words, they are answerable to quangos—inexperienced, recently set-up quangos at that—which are answerable in turn to the regional health authorities or the Department of Health, but certainly not directly to the people whom they serve. As a result of the way in which the contract was set up, they were given insufficient funds, because costs were deliberately underestimated. That was done for a particular reason—no one wanted the GPs to opt out and back out of the deal. The money was to come from the GP pot. Had the bodies taken more than was needed, or more than the GPs were prepared to bear, there would have been a problem. Across the country, the record shows that PCTs are now having to find extra money to deliver a satisfactory out-of-hours service. The result is unquestionably fewer tired doctors. However, it is also more difficulties in communication between the out-of-hours service and GPs. As I have said, there are cost pressures on providers and PCTs, and we have, essentially, a more remote service. If I may make a constituency point, that is certainly true in my area, where much of what is happening appears to be driven by cost. The process has certainly not been consulted on, and it has certainly replaced a superior service. Current provision is failing to integrate with the previously excellent, but now demoralised, district nurse service. In other words, our research and our reports tend to show that throwing out the professionals does not necessarily increase efficiency, value for money or quality of service. I shall conclude on this point, because there is something that the Government can learn and are learning from it. A Hegelian dialectic is being played out in government. We once used to think that professionals and public servants do their best and should be left to their own devices to do their best. That was, in a sense, the thesis. We replaced that with the new Labour view that public servants need to be challenged, outsourced, bound to targets, incentivised, micro-managed, plugged into commercial values and, if that does not work, exposed to competition. That was the antithesis, so to speak. The evidence suggests that we may gradually be arriving at a satisfactory synthesis, where the public servants and the professionals simply need to have a structure put in place in order to see professional judgment and experience rewarded and encouraged. That is not what happened in the case of the doctors' contract, and it is not what happens time and again, but anything that the PAC can do to facilitate that process is more than welcome.